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In 2016, the Gulf Cooperation Council (GCC) member states signed a value-added tax (VAT) agreement, paving the way for the imposition of a general consumption tax in the region. The United Arab Emirates (UAE) and Saudi Arabia became the first member states to adopt the treaty in 2018, and its implementation means that businesses in these regions are required to submit regular VAT returns for the first time.
UAE resident Nadim Alameddine said he immediately saw an opportunity in the accounting field as businesses sought to file returns as required by the new law. This inspired him to launch Wafeq in 2019, a startup that initially provided accounting services and later launched a scalable accounting and e-invoicing SaaS solution in 2021 focused on customers in the UAE and Saudi Arabia.
Wafeq is currently exploring new growth opportunities in Egypt while doubling down on existing markets as businesses comply with changing accounting and financial requirements. The growth plan follows $3 million in seed funding from a round led by Raed Ventures with participation from Wamda Capital.
“There are regulatory changes happening in Saudi Arabia and Egypt, and that’s what we’re trying to take advantage of right now… We’re also doubling down on existing markets where we already have good traction,” Alameddine told TechCrunch .
Egypt and Saudi Arabia currently require businesses to comply with electronic invoicing regulations, which he said has led to a surge in demand for accounting software, which Wafeq is leveraging through its enterprise (API) product.
Wafeq is an approved provider in Saudi Arabia and the UAE (e-invoicing is not yet mandatory in these countries). The startup is also seeking approval from the Egyptian Tax Authority. Alamuddin said the North African country offers plenty of opportunities for startups as it is home to millions of small and medium-sized enterprises.
![Dubai-based Wafeq, which supports SMEs with accounting and financial compliance, raises $3 million in seed funding](https://techcrunch.com/wp-content/uploads/2023/01/Product-Shot-English.png)
Wafeq says it supports accounting and financial compliance for small and medium-sized businesses. Image Source: wafik
Its accounting platform, on the other hand, allows customers to easily generate VAT returns, manage inventory, payroll, billing and track expenses. It also produces actionable financial reports and insights for businesses.
Alameddine said: “We position ourselves as complete accounting software for small and medium-sized businesses, and we offer three different plans for businesses looking to send compliant invoices, manage accounts payable, or seek a complete accounting solution that includes inventory management and payroll services. Provide services.”
Currently, more than 630,000 invoices are created each month through its platform, with monthly invoices totaling more than $117 million. They expect this number to grow significantly as their growth plans are implemented.
Commenting on the deal, Talal Alasmari, founding partner at Raed Ventures, said: “We are delighted to support Wafeq as they solve a problem that affects thousands of businesses in the region. The digitization of accounting practices will truly transform the operations of SMEs approach to improve operational transparency, improve efficiency and promote economic growth.”
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