In a groundbreaking move for Egypt’s financial industry, Catalyst Partners Middle East has successfully completed the country’s first special purpose acquisition company (SPAC) merger by acquiring digital lending startup Qardy in a deal valued at EGP 1.16 billion (approximately $23.15 million).
This milestone announcement highlights Qardy as the first fintech startup in Egypt to go public through a SPAC structure, a novel approach in the region that is expected to gain traction in the years to come.
Founded in 2022 by Abdel Aziz Abdel Nabi, Aser Yahya, and Tamer El-Manesterly, Qardy operates as a digital lending platform that connects small and micro enterprises (SMEs) with financial institutions. The company offers loans, factoring, and leasing services to cater to the financing needs of underserved segments of the Egyptian economy.
“This merger underscores our shared commitment to innovation in non-banking financial services and supporting SMEs,” Qardy expressed. “Through this collaboration, we will continue operating with our existing team and platform while gaining access to capital, infrastructure, and long-term strategic support to accelerate our growth.”
Catalyst Partners Middle East, a subsidiary of Cairo-based impact investment advisory firm Catalyst Partners, became Egypt’s first approved SPAC after receiving authorization from the Financial Regulatory Authority (FRA) in September 2024. The acquisition of Qardy is executed through a full or partial share swap, with Catalyst issuing new shares in exchange for all of Qardy’s equity.
This development signifies a significant achievement for Egypt’s emerging SPAC market, which is seen as a promising alternative funding and public listing avenue for high-growth startups. It also serves as Catalyst’s inaugural public deal as part of its strategy to acquire several companies in the fintech and non-banking financial services sectors.
Maged Shawky, Chairman of Catalyst, revealed the firm’s plan to acquire six to ten companies, with a focus on at least two from the fintech sector. The acquisition of Qardy marks the initial step in this strategy and aligns with national economic goals to enhance financial inclusion and drive private sector-led growth.
Despite its relatively young age, Qardy has demonstrated rapid growth and a strong product-market fit in a largely underserved financial sector. Since its inception, the startup has onboarded over 6,000 corporate clients and facilitated more than $12 million in loan transactions through its platform. It has forged partnerships with multiple Egyptian banks and non-banking financial institutions, offering tailored financing solutions to meet the working capital and growth needs of MSMEs.
In August 2024, Qardy secured a seven-figure pre-seed funding round supported by investors such as White Field Ventures, Vastly Valuable Ventures, and various angel investors. The funds were earmarked for regional expansion and technology infrastructure enhancements, objectives that are now poised to accelerate under Catalyst’s ownership.
Before finalizing the deal, Catalyst undertook significant preparatory measures. In December, the firm listed 1 million shares on the Egyptian Exchange (EGX) at a nominal price of EGP 10 per share, increasing its issued capital to EGP 10 million. Shareholders subsequently approved a capital hike to EGP 235 million through the issuance of 22.5 million new shares, a move sanctioned by the FRA with investor subscriptions open until Thursday.
The successful execution of the Qardy merger, Egypt’s first SPAC transaction, could pave the way for future deals in the region. Globally, SPACs have gained popularity as quicker and more flexible alternatives to traditional IPOs for high-growth companies. However, their adoption in the MENA region is still limited due to regulatory and market maturity challenges.
Qardy’s acquisition underscores the growing demand for digital financial services in Egypt, particularly those targeting underserved SMEs, a sector that contributes to over 80% of private employment in the country. With the Egyptian government advocating for economic digitization and broader financial access, transactions like this could drive further investment in fintech infrastructure and services.
For Catalyst, the acquisition presents a strategic entry point into a rapidly expanding sector with substantial economic and developmental prospects. For Egypt’s startup ecosystem, it showcases that public market tools like SPACs, previously absent from local transactions, could now serve as a viable pathway for exits and growth.
While it remains uncertain whether this deal will catalyze more SPAC mergers in the region, it signifies a significant stride in integrating innovative fintech solutions with Egypt’s evolving financial landscape.
