Dubai FinTech platform baraka raises $20m to fuel growth

The start-up aims to 'double down on its presence across the GCC and Egypt markets'

Feras Jalbout, baraka's founder and chief executive. Pawan Singh / The National

Baraka, a Dubai-based zero-commission investment platform, has raised $20 million in a new funding round as it aims to expand into new markets and boost its services.

The latest investment round, led by Valar Ventures — a New York-based venture capital firm backed by entrepreneur Peter Thiel — also saw the participation of global investment firm Knollwood.

With this new investment, baraka aims to “double down on its presence across the GCC and Egypt markets, and drive customer acquisition”, the start-up said on Wednesday.

The company will improve its app and add new services over the next 12 months, including access to new features such as dividend reinvestment plans and extended hours trading, it said.

Launched last year, baraka is headquartered in Dubai International Financial Centre and is regulated by the Dubai Financial Services Authority.

It helps investors across the region with access to commission-free investing and access to more than 6,000 US stocks and Exchange-Traded Funds (ETFs).

Starting from $1, investors on baraka can potentially build diversified portfolios and long-term wealth by benefiting from global equity markets, and achieve financial independence.

The app, which is currently available in the UAE, Saudi Arabia, Bahrain, Oman, Kuwait and Egypt, features a simplified dashboard for investors to monitor and track their portfolios, a content hub that includes daily market news and an investment academy for users to build and test their trading knowledge.

“In just one year since our launch, tens of thousands of users have signed up to baraka,” the company's founder and chief executive Feras Jalbout said.

“By empowering the next generation of investors in our region with low-cost and comprehensive investment choices, we remain committed to enabling financial inclusion for millions of investors across Mena [Middle East and North Africa].”

Baraka, which has raised $25m so far, is a Y Combinator-backed company and is also part of Abu Dhabi’s global tech ecosystem, Hub 71. Its previous investors, in earlier funding rounds, included Class 5 Global, Global Founders Capital and Venture Souq.

The company secured regulatory approval from the DFSA to operate in the UAE in August last year as it sought to tap into the Mena region's demand for online trading during the Covid-19 pandemic.

As part of its growth plans, baraka intends to create further access to regional economies where it aims “to secure licensing at some point in the future”.

It has committed the majority of the new funds to “new markets and create more access to local stock exchanges for regional investors”.

In a bid to attract global investors to the Middle East, baraka is working with local stock exchanges and regulators to enable access to local market trading on its app.

Users of baraka app are provided with daily financial news in English and Arabic to help them make informed and independent investment decisions.

“We are proud to back the world-class team that’s shaping up at baraka, with our first investment into the Middle East,” Andrew McCormack, general partner at Valar Ventures, said.

“The region’s emerging FinTech ecosystem has immense potential, and we are encouraged by the early signs of traction that baraka has been able to showcase. We are really looking forward to working closely with the company as they enter this exciting new phase of growth across the region.”

Nearly 56 per cent of baraka users are under the age of 30, while more than 50 per cent of all users are first-time investors.