Fuse Raises $6.6M to Simplify MENA Payments for Businesses

Fuse Secures $6.6 Million Seed Funding to Streamline MENA Payments

For global companies, expanding operations into the Middle East and North Africa (MENA) region often presents significant financial and logistical hurdles. These challenges stem from the area’s diverse regulatory landscapes and fragmented banking infrastructure.

Dubai-based fintech company Fuse is addressing these complexities with a cross-border payments API. The company recently completed a $6.6 million seed funding round to further develop and deploy its solution.

Pioneering Virtual IBANs in MENA

Fuse, established in 2023, is led by CEO George Davis and CTO James Smith. They assert that their platform is the first to provide infrastructure-level payments capabilities alongside virtual International Bank Account Numbers (IBANs) within the MENA region.

This functionality, while standard in Europe, has been largely unavailable throughout the Middle East and North Africa, according to Davis.

“Currently, we are the sole provider of virtual IBANs in the Middle East,” Davis explained to TechCrunch. “The product is widely available and considered a commodity in Europe, but its absence here created a clear opportunity.”

Core Product Offerings

Fuse’s primary offering encompasses USD virtual accounts designed for international money transfers. Additionally, the platform provides dirham-denominated IBANs to facilitate local payments within the UAE.

This allows international businesses to efficiently manage first-mile collections and last-mile payouts without the need for establishing a local presence, handling foreign exchange conversions independently, or securing local operating licenses.

Addressing Existing Market Gaps

Davis identifies two prevailing options for global companies seeking to transfer funds in MENA: smaller, localized payment companies lacking substantial scale, or larger international players like Thunes, which often operate without full local licensing and depend on variable partnerships.

Fuse positions itself as a distinct alternative, offering a fully licensed, robust platform that simplifies money movement throughout the Middle East. This is achieved through the utilization of virtual IBANs and established local payout networks.

Consequently, global businesses can engage in the region’s market without the burdens of establishing local infrastructure or navigating complex regulatory processes.

Target Customer Base

The majority of Fuse’s current clientele consists of businesses based in the U.S., Europe, and Asia. These companies aim to operate within the MENA region but currently lack the necessary banking infrastructure or licenses to do so efficiently.

Leveraging Virtual IBANs for Financial Transactions

A significant application lies within the realm of employers of record (EORs). For example, a company headquartered in the United States employing individuals in the United Arab Emirates often requires a local banking account – a resource challenging to secure without established residency or the necessary licensing – to facilitate salary disbursements in dirhams under the appropriate company designation. Fuse addresses this challenge by providing USD-denominated virtual IBANs.

These virtual accounts enable businesses to fund them and subsequently remit salaries locally in AED (dirhams) directly to designated recipients.

According to Davis, the platform allows users to “generate an unlimited number of IBANs under their clients’ names and execute local payments.” This functionality eliminates the prerequisite for residency or the establishment of local entities; clients can operate from any global location.

Current Client Base

Fuse currently provides services to over 20 clients. These include EORs, remittance companies, cryptocurrency platforms, online marketplaces, and payment service providers (PSPs).

Notable clients encompass dLocal, RemotePass, and prominent platforms such as Deel, Airbnb, and Etsy as they broaden their operations within the MENA region.

While the UAE currently serves as Fuse’s primary market, the platform is expanding its capabilities. It now facilitates direct payouts in Saudi Arabia, Egypt, and Jordan.

Furthermore, it offers wholesale foreign exchange services for Indian and Chinese businesses operating in the UAE. This supports the repatriation of funds through established channels, vital for some of the region’s most active trade and remittance corridors.

Competitive Landscape

Although numerous startups globally offer similar services, Davis identifies stronger parallels with Currencycloud, a Visa-backed company. Both provide virtual accounts, FX services, and cross-border payment solutions.

However, he emphasizes that “while Currencycloud maintains a global focus, Fuse is specifically engineered for the Middle East.”

The timing of Fuse’s emergence is particularly advantageous. Businesses throughout MENA are not only underserved but are also experiencing increased transaction volumes.

This growth is fueled by a significant rise in e-commerce and the adoption of digital payment methods. Davis posits that this demand creates a unique opportunity for regional infrastructure providers to establish market leadership.

“Global cross-border payments typically result in a winner-takes-all dynamic,” he explains. “However, success now necessitates the expertise of local specialists, and that is precisely what we are developing.”

Insights from TrueLayer and BVNK Experiences

Initial results are promising. Fuse is currently facilitating hundreds of millions of dollars in transactions each quarter, and its revenue is increasing by over 50% monthly. According to Davis, the company’s revenue for the current quarter surpasses its total revenue from the previous year.

Fuse’s focus on streamlining cross-border payments for the Middle East stems from Davis’s direct observations. During his time at TrueLayer, he was instrumental in the fintech’s evolution from a data aggregator to a comprehensive payments and open banking platform, serving over 100,000 businesses.

Furthermore, his experience as co-founder and chief product officer at BVNK, a crypto infrastructure startup, highlighted the difficulties faced by international businesses attempting to enter the Middle Eastern market.

“Our work involved assisting global companies in utilizing stablecoins for transferring funds from developing economies,” Davis explained. “We directly encountered the challenges of operating within MENA, as did the companies I consulted with. This realization was the catalyst for Fuse.”

Fuse was established in 2023 by Davis and Smith, who have a long-standing professional relationship, having previously collaborated on engineering projects at both TrueLayer and BVNK. Currently, they oversee a team of 12 professionals spanning engineering, product development, and compliance.

The $6.6 million funding round was spearheaded by Northzone, a European multi-stage venture capital firm with a portfolio including Klarna and Spotify. Additional investors included Flourish Ventures, Alter Global, and prominent angel investors such as Olugbenga “GB” Agboola, CEO of Flutterwave, and George Makhoul, former president of Morgan Stanley MENA.

Sanjot Malhi, a partner at Northzone, commented, “The Fuse team is revolutionizing payment infrastructure within a rapidly expanding market. Their capacity to simplify the intricate cross-border financial flows in MENA is precisely what the region requires.”

The newly acquired funding will be allocated towards team expansion, obtaining further regional licenses, and broadening the product offerings beyond the United Arab Emirates (UAE).