Alaan: navigating Regulatory Hurdles and Pioneering AI in MENA Spend Management
Alaan,a fintech company focused on spend management for businesses in the Middle East and North Africa (MENA),has secured a meaningful Series A funding round. The company’s journey to market, however, was marked by considerable regulatory challenges in both the United Arab Emirates and Saudi Arabia. Launch in the UAE was delayed nearly a year due to complexities in securing approvals and establishing necessary banking partnerships. Expansion into Saudi Arabia faced similar obstacles, requiring years to gain approval from the country’s central bank before a launch this January.
“The biggest challenge we faced, both in the UAE and saudi Arabia, was simply going live,” stated Alaan’s CEO.
Despite these initial hurdles,Alaan demonstrated agility in other areas. The company was the first in the region to integrate Apple Pay into its business-to-business (B2B) offerings, a feature previously unavailable to regional finance teams.
In early 2023, Alaan also claimed a regional first by integrating OpenAI into its platform, a move that ultimately shaped its product development. The initial implementation, a chatbot designed for conversational spending analysis, did not resonate with users. Alaan pivoted, recognizing greater value in leveraging AI for back-end process automation. The company now utilizes AI to streamline tasks such as receipt matching,reconciliation,and Value Added Tax (VAT) extraction – a notably impactful application given the complex VAT regulations in the region and the potential for tax reclamation.
Alaan reports its platform has already saved finance teams over 1.5 million hours of manual work, a figure projected to increase with continued investment in automation.
As its 2022 launch, Alaan has processed over 2.5 million transactions for more than 1,500 finance teams, serving prominent regional enterprises including G42, careem, Tabby, and Lulu Group. Notably, the company is already profitable, having generated $10 million in revenue from a $5 million investment. the CEO attributes this financial discipline to guidance received from Y Combinator (YC) and mentors, contrasting it with a market trend focused on payment volume.
currently, Alaan is focused on replicating its success in Saudi Arabia, where it launched earlier this year and has experienced month-over-month doubling of transaction volumes for the past six months.The Series A funding will be used to accelerate this expansion by scaling hiring in sales, customer success, and compliance, as well as further developing AI-driven finance automation.When questioned about the influence of competitor Ramp’s rapid growth and valuation increases on investor confidence, the CEO emphasized the importance of fundamental business metrics. “What realy matters for a company at our stage is the fundamentals: how capital-efficient we are, how much revenue we generate, how strong our go-to-market motion is,” he explained.”We are not in a market where you know size is an advantage, like the US or Europe. So, regardless of whether ramp was able to raise or not, I think we would have raised this much because our fundamentals were very strong.”
