In 2016, Gulf Cooperation Council (GCC) member states signed the Value Added Tax (VAT) Agreement, which paved the way for the introduction of the general levy on consumption across the region. The United Arab Emirates (UAE) and Saudi Arabia were the first member states to adopt the treaty in 2018, and its implementation meant that businesses in these territories were required to submit periodic VAT returns for the first time.
Nadim Alameddine, a resident of the UAE, says he immediately saw an opportunity in accounting when companies wanted to file returns as required by the new law. This inspired him to launch Waffle in 2019, a startup that initially offered accounting services and later, in 2021, launched a scalable SaaS solution for accounting and e-invoicing, targeting customers in the UAE and Saudi Arabia.
Wafeq is now exploring new growth opportunities in Egypt while doubling down on its existing markets as companies meet changing accounting and financial requirements. The growth plans follow a $3 million seed funding it raised in a round led by Raed Ventures and in which Wamda Capital participated.
“Regulatory changes are happening in Saudi Arabia and Egypt, and we are currently trying to respond to that… we are also doubling down on our existing markets, where we already have a good grip,” Alameddine told businessupdates.org.
Egypt and Saudi Arabia are currently requiring companies to comply with e-invoicing, which he says has led to a surge in demand for accounting software, which Wafeq uses through its enterprise (API) product.
Wafeq is a ratified provider in Saudi Arabia and the UAE (e-billing is not yet mandatory there). The startup is in the process of getting approval from the Egyptian tax authorities. Alameddine said the North African country offers huge opportunities for the startup as it is home to millions of small medium businesses.
The accounting platform, on the other hand, makes it easy for customers to generate their VAT returns, manage inventory, payroll, bills, and track expenses. It also generates actionable financial reports and insights for businesses.
“We position ourselves as a full-featured accounting software for SMBs, and we offer three different subscription plans for businesses that want to send compliant invoices, manage their accounts payable, or those looking for a full-featured accounting solution that includes inventory management and payroll,” said Alameddine.
Currently, over 630,000 invoices are created each month through the platform, with a total monthly billed amount of over $117 million. They expect this to grow massively in the wake of its growth plans.
Commenting on the deal, Talal Alasmari, the founder of Raed Ventures, said; “We are excited to support Wafeq in solving an issue affecting thousands of businesses in the region. The digitization of accounting practices will really change the way SMEs work here, increasing operational transparency, creating efficiencies and contributing to economic growth.”