Cassbana, an Egyptian fintech startup aiming to provide financial identities to the underserved, is attempting a comeback after a tumultuous period marked by funding shortfalls, operational challenges, and co-founder departures. The company, which uses machine learning and artificial intelligence, faced a near-collapse following the cancellation of a crucial investment, raising questions about its long-term viability and the lessons learned by its founders.
Founded in 2020 by Haitham Nassar (formerly of Careem), Mohamed Tarek, and Mostafa Barakat, Cassbana initially attracted over $1 million in funding from investors including Disruptech, MSA Novo, Inclusive Fintech 50, Endure Capital, Full Circle Africa, COTU Ventures, Access Bridge Ventures, and Suya 1 Ventures. Its business model focused on partnering with distributors to offer inventory financing to micro and nano-retailers, primarily in the grocery, cosmetics, and clothing sectors. By facilitating access to credit, Cassbana aimed to build financial identities for those excluded from traditional banking services. CEO Haitham Nassar stated in 2021 the company’s ambition was to reach one million customers.
Cassbana’s model involved providing inventory financing to small retailers, allowing them to stock goods without immediate payment. Cassbana would then receive installment payments through its mobile app, with successful repayments improving the retailers’ credit scores and enabling access to larger financing options.
However, Cassbana’s progress stalled after a $2 million equity funding commitment from British International Investment (BII), formerly CDC Group, was withdrawn. This cancellation, coupled with the broader economic downturn in Egypt in 2022, triggered a series of setbacks. Rumors of the company’s demise circulated, although Mr. Nassar maintained that operations had only been temporarily paused.
Former co-founder Mohamed Tarek, who has since left Cassbana to join another company, Taager, told Launch Base Africa that Cassbana is “almost restarting again with much lighter weight.” He downplayed any suggestion of a co-founder crisis, despite a LinkedIn post where he emphasized the importance of equal ownership shares for founders, a lesson seemingly learned from his experience at Cassbana. “The past two years have been a rollercoaster,” Mr. Tarek wrote, reflecting on the challenges faced by the startup, including the impact of macroeconomic events in Egypt. He stressed the need for a clear path to profitability, lean operations, and cautious financial planning. “Don’t build plans on funds that didn’t hit your bank yet,” he advised, highlighting the precarious nature of startup funding. He also emphasized the importance of maintaining a healthy cash runway and selecting investors carefully. “Select investors meticulously; the true value of supportive investors shines through in challenging times,’’ said.
Last year, Launch Base Africa reported that fellow co-founder Mostafa Barakat had also left the company. For a period, Cassbana’s website was inactive, further fueling speculation about its future. However, the website is now active again, and job advertisements suggest the company is actively recruiting. Mr. Nassar has stated that Cassbana is pursuing a new funding round and plans to announce expansions soon. Mr. Tarek’s LinkedIn post also alluded to the challenges of navigating the Egyptian tech landscape, particularly the impact of macroeconomic events on startups.
The challenges faced by Cassbana are indicative of the difficulties facing startups in emerging markets, particularly in the fintech sector. Securing funding, navigating economic volatility, and establishing sustainable business models are constant struggles. Cassbana’s attempted revival will be closely watched as a test of its resilience and adaptability. Whether the company can overcome its past setbacks, rebuild its team, secure new funding, and achieve its initial ambitions remains to be seen. The story also highlights the personal challenges faced by founders, the importance of equitable ownership structures, and the lessons learned from both successes and failures in the volatile world of startups.
