"We Got Funded!" UAE-Based Baraka's US$20 Million Series A Round Marks Peter Thiel-Backed Valar Ventures' First Middle East InvestmentIn addition to introducing features such as dividend reinvestment plans and extended hours trading, Baraka will also use the new capital to create access to local stock exchanges.

UAE-based fintech startupBaraka(stylized as "baraka") has raised US$20 million in a Series A round led byValar Ventures, a US-based venture capital firm backed by billionaire entrepreneur and venture capitalist Peter Thiel, perhaps best known for being the co-founder of US-based digital payment platformPayPal. The round was closed by US-based global investment firm Knollwood.

对于Valar Ventures, this funding round marks the firm's first investment in the Middle East. "As we went about our fundraising process, we were clear that we wanted investors who could really create extraordinary value for us," says Feras Jalbout, founder and CEO of Baraka. "That is why in this round, we just had two investors: Valar Ventures and Knollwood. While Peter Thiel needs no introduction, Valar Ventures has a track record in backing firms at an early stage in high-margin, fast-growing technology companies that are pursuing huge market opportunities. At Baraka, we are doing all of this. Our Series A round will drive further growth as we seek out licensing and new markets to take our operations to."

Launched in 2020, Baraka is a commission-free investment platform that enables users to invest in over 6,000 US stock exchanges and exchange traded funds (ETFs) for as little as $1. Regulated by the Dubai Financial Services Authority (DFSA), Baraka's partnered broker isDriveWealth, a digital trading technology company registered at the US Securities and Exchange Commission (SEC). Having raised $20 million, Jalbout says Baraka will now double down on itspresence across the GCC and Egypt, with a focus on customer acquisition.

这个事业的重要组成部分,然而,将其lve Baraka creating more access to local stock exchanges for regional investors. "We need to remember that most people in the region rely on pensions for retirement or explore traditional investment opportunities like real estate and bank deposits," Jalbout explains. "Equity investment hasn't seen the same rate of adoption as compared to more matured global markets. By opening up our platform to local stock exchanges, we hope to support capital flow into listed companies from the region and enable users to invest in homegrown businesses."

Jalbout points out that investing in local stock exchanges may very well play a pivotal part in strengthening economies across the region as well. "This feature will additionally allow cross-border investments, for example from Egypt to KSA," he says. "Exchanges like Tadawul in KSA, and Dubai Financial Market (DFM) and Abu Dhabi Securities Exchange (ADX) in the UAE are already home to some of the biggest listed companies in the region. As nations across the region focus on attracting foreign direct investments, we hope to play a role in enabling this vision."

With the fresh influx of capital, Baraka will also continue to evolve its app with new services, expected to launch over the next 12 months, such as dividend reinvestment plans and extended hours trading, among others. Jalbout explains that such additions align with the needs of the Middle East's current demographic. "The region has one of the youngest populations in the world, and they allseek out mobile-first experiences," Jalbout says. "But the COVID-19 pandemic and global economic volatility have encouraged users of all ages, to manage their finances better, and to prepare for any eventuality- this includes building a diversified portfolio to create wealth for the long term. Features like dividend reinvestment plans and extended hours trading, are encouraging users to choose equity as a route to securing their future."

Related:Dubai-Based Fintech Startup Baraka Is On A Mission To Help Everyone In MENA To Invest

Source: Baraka

But, of course, a big part of financial independence is rooted in the need to attain financial literacy. According to Jalbout, although the platform doesn't offer direct advice on investments, part of Baraka's vision is to offer more educational resources to its users. "Baraka originally started as a content platform, to educate consumers in the region about equity investing," Jalbout recalls. "We also have a news offering, called Akhbaraka, which brings the latest stock market news to our users. By equipping users with the knowledge to build a diversified portfolio, we wanted to create a generation of independent investors. After all, 56% of Baraka users are under the age of 30, and they are using our app to build their portfolios andachieve their financial goals. Financial education is imperative at this early age."

And Jalbout assures that a portion of the raised funds will go into furthering such efforts. "While the funds raised in our Series A round will be earmarked for multiple purposes, building out our content and news offering will be one of these," he says. "This will allow us to advance our mission of driving further awareness and education about investment opportunities for users in the region."

'TREP TALK: Feras Jalbout, founder and CEO of Baraka, offers tips for founders attempting to raise capital in the midst of a funding winter

Bring on investors with expertise in the sector"Fintech is constantly evolving with best practices and new technologies emerging from every part of the world. By bringing on investors with large networks, you're able to tap into expertise that might not be easily available."

Focus on your product and experience, and not just customer acquisition"With low barriers to customer acquisition, the challenge fintechs could face is about keeping users engaged. That is why you need a clear plan for deployment of capital andconstantly innovate with your product. When it comes to building their wealth, users need to be always assured that they have access to market leading tools and solutions, that prioritizes their financial well-being."

Always protect your users' interests first"The fintech sector is highly regulated, and for good reason. At Baraka, we are licensed by the Dubai Financial Services Authority, which follows global best practices, and provides us guidance on regulations. Founders planning for expansion must remember that growth at any cost is not an option in this sector, and they must always prioritise user interests first."

Related:"We Got Funded!" Egypt-Based Money Fellows Raises US$31 Million In Series B Funding Round To Foster Greater Financial Inclusion In The Country