Behind The Scenes Of Saudi Fintech Startup Hala's Acquisition Of UAE-Based Online Payment Platform Paymennt Paymennt co-founder Tarek Ghobar believes his entreprise is well-positioned to contribute towards Hala's vision of becoming a one-stop-shop for SMEs.
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Saudi Arabia-based fintech startup Hala has acquired UAE-based online payment platform Paymennt.com (Paymennt).
Founded in 2018, Hala is a fintech platform that offers financial services and digital tools to empower small and medium enterprises (SMEs) in their growth and expansion journeys. Regulated by the Saudi Central Bank, Hala's point-of-sale solution is a device that can be activated in as little as 15 minutes before it is delivered to any given location. Merchants using the Hala platform can also process card payments without the need of a bank account, as long as they own a legally registered trade license.
Paymennt, on the other hand, was launched in 2017 as an online payment platform that enables SME merchants to process online payments through payment links, e-commerce payments, and QR code payments. Additionally, it also offers application program interface integration that allow SMEs to launch a web-based store, via an application process that can be completed within five minutes. Since its inception, Paymennt -which was formerly known as PointCheckout- has built its reputation by helping over 3,000 micro and small businesses widen their reach across the e-commerce realm.
"Our merchants are already able to process online transactions without having an online presence through payment links, for example, and social media sales, and the same account enables them to publish their items or services online on their website with a click of a button," Ghobar explained during an interview with Entrepreneur Middle East. "These tools allow merchants to slowly move online at their own pace while keeping their current process so as not to shift the business entirely from day one or pay hefty fees upfront. With Hala's tremendous experience in acquiring over 50,000 merchants within two years, we look to exponentially grow across the region and bring such tools to more merchants, and couple one account with online and offline payments."
Tarek Ghobar, co-founder, Paymennt.com. Source: Paymennt
Having thus observed and understood the needs of SME merchants in the UAE over the years, Paymennt co-founder Tarek Ghobar believes his entreprise is well-positioned to contribute towards Hala's overall vision. "I believe it was our team and our growth story, and also the fact that the two company products complement each other [that made the Hala team go ahead with this acquisition]," Ghobar says. "An important next frontier in Hala's product roadmap is online payment processing, and, similarly, our expansion plan included a regional rollout and launching additional value added services for our SME merchant base. Together, we will be able to provide merchants with a comprehensive solution to processing payments, starting from the business inception and in-person payments, and all the way to their venture into online sales and payment processing."
Related: Five Of The Best Ways To Scale Your SME (With No Investment)
It's clear, then, that this acquisition is one that has positively catered towards the business missions of both companies. Indeed, this would mark the second successful acqusition for Hala- the first being that of Saudi startup Fresh in 2021, which led to the addition of a new feature on its platform called Hala Cashier that allows the integration of non-financial value-added services to SME customers. That said, Ghobar admits that acquisitions are not always the easiest of exit strategies for startup owners. "However, more often than not, it is also a logical choice," he adds. "The conversation with Hala started while we were fundraising for our company, and it quickly developed into that of an acquisition. We could not ignore Hala's key performance indicator growth, and the potential for our company being part of their organization. But most importantly, we found mutual understanding in Hala's leadership when it comes to business ethics, value creation, and entrepreneurial spirit. Credit goes to Hala's founders for addressing our concerns, and working towards a deal with the flexibility required in such a complex conversation."
Looking to the future, Ghobar remains confident about what Paymennt and Hala can achieve together. "The shared vision is to truly become a one-stop-shop for all payment processing needs and across all of the merchants' customer interactions for small businesses, and then export this process to the rest of the world where similar challenges exist in their SME payment infrastructure," he concludes.
Paymennt co-founder Tarek Ghobar on what entrepreneurs should consider before accepting an acquisition proposal
1. The wellbeing of the team is first and foremost "Make sure their career comes with stability and growth opportunities."
2. Investors' returns should be just as important "Engage the investors early on in the conversation so they can also help with leverage and/experience."
3. Make sure the acquiring company has a fitting culture "Often, corporates acquiring startups bring in a big mismatch for team members and founders, which isn't always apparent from the initial talks and can cause the team to leave and results be affected."
4. Do the needed due diligence "Ask about the financial health of the company, and consult their investors if possible. In case the acquiring company had any other acquisitions in the past, certainly get in touch with other entrepreneurs, and get their feedback on their progress and any unmet promises."
5. The founder compensation (shares, salaries, cash, etc.) need to reflect their hard work "This is much more critical when the choice is between the founders' financial outcome, and that of investors."
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