Home Technology Valar Ventures leads $20M round in online brokerage platform baraka • TechCrunch

Valar Ventures leads $20M round in online brokerage platform baraka • TechCrunch

by Shashank
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Stock trading apps have proliferated over the past few years, targeting different demographics and audiences who feel the need to participate in investing activities in order to live a healthier financial life.

The latest developments are Barakais a Middle East-based, fee-free investment platform founded two years ago, led by Peter Thiel’s Valar Ventures and joined by global investment firm Knollwood, to expand and reach across the region. announced that it had closed a $20 million Series A round. more users.

CEO Ferras JarvWith years of investment experience at Barclays, Standard Chartered and a Dubai-based family office, he launched Baraka in 2020. His upbringing was also a factor. In his TechCrunch interview, Jalbout said how he learned about investments such as stocks and government-backed retirement funds when he grew up in Canada, where investing was institutionalized. But in the Middle East, it was a different ball game. For years, people in the region have invested through traditional savings options such as bank deposits and real estate, Jalbout said. Baraka therefore brings much-needed variety.

“When I moved to the region, I was surprised that people weren’t investing in digital assets as much because they had little to no preparation to invest in them,” said the founder and CEO. rice field. “Many people in the region have tax-free income and are not investing. A big reason I started Baraka was that there were very few fintechs offering investment options. I wanted to use my experience as a home to create an app that I would love to use.”

Before obtaining a license to launch a trading app, baraka was a content platform using newsletters and podcasts to educate retail investors in the Middle East, especially the UAE, about equity investing and financial knowledge. Armed with Y Combinator backing and a $4 million seed round, the app launched a year ago. With this arsenal, baraka now offers “thousands” of investors access to his over 5,000 US stocks and his 1,000 exchange-traded funds (ETFs). Investors can start investing on the platform with as little as $1 (~3.79 dirhams). Jalbout added that the platform has “tens of thousands” of users who actively trade and consume in English and Arabic.

56% of this user base is under the age of 30, a sign of a younger local population seeking digital investment solutions. Over 50% are first-time investors and are highly interested in learning about the stock market through baraka’s content and starting their investment journey on the platform. Also, 83% have at least made her 3 or more transactions in a month during their lifetime on the Baraka app.

Image credit: Baraka

Baraka is a zero commission platform, so we do not make any money from commissions, trades or spreads. Instead, a subscription service for about $10 a month (~37.99 dirhams) allows retail investors access to more financial data on companies, as well as stock reports from his partner Baraka, Refinitiv. . Baraka is exploring other sources of revenue, one of which is to launch a fee-based or asset management-based product that will generate annuities over time.

With this new investment, the Robinhood-esque platform will double its presence in GCC and Egypt, its new market (where it faces competition from Thndr), and drive customer acquisition. The company said it will add new services over the next 12 months, including access to features such as dividend reinvestment plans and long-term trading.

Local stock trading offers are also on the card.Taduwal, the Middle East’s most prominent stock exchange, said he will raise $4.7 billion through his 27 new listings in the first half of 2022, almost 300% increase At this year’s regional exchange-wide IPOs. As such, Baraka is dedicating a large part of this investment to working with local stock exchanges and regulators, such as Tadawul, to secure licenses and democratize access to local equities.

“Our ambition is to partner with Saudi Stock Exchange Tadwal, Dubai Financial Markets (DFM) and Abu Dhabi Exchange (ADX) to also offer local equities,” he said.

Baraka has raised a total of $25 million in venture capital funding from investors including Class 5 Global, Global Founders Capital and Venture Souq. Its new investor, Valar Ventures, is also backing similar digital brokerage startups like Bitpanda and Shares (also backed by his Global Founders Capital).

Andrew McCormack, general partner at Valar Ventures, said this is his company’s first investment in an emerging fintech ecosystem in the Middle East full of potential. “We are encouraged by the early signs of traction that Baraka has shown. We are really looking forward to working closely with the company as it enters this exciting new phase of growth across the region,” he added. .

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