When Parthi Durisamy was a consultant at McKinsey’s Dubai Office, he discovered that the American Express cards his company relied on for corporate expenses are rarely accepted in the Middle East. This forced Duray Sammy to take significant travel expenses out of his pocket and submit an endless expense report.
“It was constant pain,” Duray Sammy explained over the phone. “We upload receipts over the weekend and manually adjust any costs.”
Alaan, the company he now launched with fellow McKinsey alumnus Karun Kurien, is a leading Middle Eastern spending management platform. It raised $48 million in Series A funding led by Peak XV Partners (formerly Sequoia Capital India & Sea), and announced participation from others like 885 Capital, Y Combinator, 468 Capital and Pioneer Fund.
Founders of Alaan unicorn clients have also invested, including Hosam Arab (Tabby), Mudassir Sheikha (Careem), and Khalid Al Ameri, a well-known YouTuber in the area.
This is one of the region’s biggest Series A rounds of fintech compared to Saudi Arabia’s purchases, paying for platform Tamara after raising $110 million a few years ago.
“This category demonstrates a strong product market fit for the MENA region, and Alaan stands out as a leader in the category,” said GV Ravishankar, managing director of Peak XV. “Customer-centric and product-driven thinking allowed us to build solutions tailored to our latest financial teams.” (Peak XV also took part in a massive Series B round last month in favor of UAE’s Proptech Huspy.)
However, Alaan’s path to category leadership was not without challenges.
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Fintech raised a $2.5 million seed round in mid-2021, but was unable to be released for almost a year, mainly due to the complexities of UAE regulations and the need for bank partnerships. The recent expansion into Saudi Arabia has raised similar hurdles and has taken years to secure approval from the country’s top bank before it finally launches this January.
“The biggest challenge we faced in both the UAE and Saudi Arabia was simply going out to perform live,” the CEO shared.
But Duray Sammy said Fintech was able to move faster in other ways to integrate Apple Pay into B2B products with Alaan’s pioneering move.
In early 2023, the company also claimed to be the first person in the Middle East to integrate Openai into its services. Duraisamy says it shaped the company’s current product strategy. Initially, Alaan deployed a chatbot and expected users to enjoy conversational interactions about spending. However, the function did not gain traction.
After learning the lesson, Fintech changed focus and realized that when AI worked in the background, it gained more value for customers. Alaan used AI to help streamline processes such as receipt matching, settlement, and VAT extraction. This is a particularly valuable use case in the region, and the platform helps businesses navigate complex VAT regulations and renewable taxes.
The company claims its spending management platform is already saving more than 1.5 million hours of manual work to its finance teams. Alarn hopes to grow as he continues to invest in automation.
Since launching in 2022, Alaan has processed over 2.5 million transactions for over 1,500 financial teams across key regional companies, including G42, Careem, Tabby and Lulu Group.
Additionally, the company is profitable and Duray Sammy said it spent $5 million to generate $10 million in revenue. Duraisamy praises YC and his leaders for instilling a disciplined approach in a market where many fintechs focus on pay volume.
Currently, Alaan is trying to replicate the growth in Saudi Arabia, which launched earlier this year, and according to the startup, it has doubled its trading volume over the past six months.
Series A accelerates this expansion, allowing the company to double AI-driven financial automation while expanding sales, customer success and overall employment across compliance.
The 4-year-old Fintech, who equips AI agents on the MENA finance team, is currently sourced one of the biggest Series A rounds in MENA, but asked about Ramp’s explosive growth.
“When we talk to investors, what’s really important to our company on the stage is fundamental: how capital efficient we are, how strong we are to generate, how strong we move towards the market,” he said. “We’re not in a market like the US or Europe that knows size is an advantage. So, whether or not the lamps were able to grow, we think we’ve raised this a lot because our basics are so strong.”
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