Introduction
In 2016, the Gulf Cooperation Council (GCC) member states signed a Value Added Tax (VAT) agreement, paving the way for the introduction of the general levy on consumption across the region. This development marked a significant shift in the economic landscape of the GCC countries, with far-reaching implications for businesses and governments alike.
The Emergence of Wafeq: A Startup Born out of Regulatory Change
The introduction of VAT in the UAE and Saudi Arabia in 2018 created a pressing need for businesses to file periodic returns. Nadim Alameddine, a UAE resident, saw an opportunity in this space and launched Wafeq in 2019. Initially, Wafeq offered accounting services but later expanded its scope by introducing a scalable accounting and e-invoicing SaaS solution focused on clients in the UAE and Saudi Arabia.
Growth Plans and Regulatory Changes
Wafeq is now exploring new growth opportunities in Egypt while doubling down on its existing markets as businesses comply with evolving accounting and financial requirements. The startup has secured $3 million in seed funding, led by Raed Ventures and participated by Wamda Capital.
"We are trying to capitalize on the regulatory changes happening in Saudi Arabia and Egypt," Alameddine told TechCrunch. "We are also doubling down on our existing markets, where we already have good traction."
Regulatory Environment: A Key Driver of Growth
The regulatory environment plays a crucial role in driving growth for Wafeq. In Egypt and Saudi Arabia, businesses are required to be e-invoicing compliant, which has led to a surge in demand for accounting software that Wafeq is tapping through its enterprise (API) product.
Wafeq is a ratified provider in Saudi Arabia and the UAE but is currently seeking approval from the Egyptian Tax Authority. Alameddine believes Egypt offers massive opportunities for the startup, given its large number of small to medium-sized businesses (SMEs).
Wafeq’s Accounting Platform: A Game-Changer for SMEs
Wafeq’s accounting platform makes it easy for clients to generate their VAT returns, manage inventory, payrolls, bills, and track expenses. The platform also generates actionable financial reports and insights for businesses.
"We position ourselves as a full accounting software for SMEs," Alameddine said. "We offer three different plans serving businesses looking to send compliant invoices, manage their accounts payable or those seeking a full accounting solution that includes inventory management and payroll services."
Key Features of Wafeq’s Accounting Platform
- Easy VAT Return Generation: Clients can generate VAT returns with ease using Wafeq’s platform.
- Inventory Management: Businesses can efficiently manage their inventory, track stock levels, and automate reorder points.
- Payroll Services: Wafeq’s platform provides a comprehensive payroll solution, including salary calculations, deductions, and compliance reporting.
- Actionable Financial Reports: The platform generates actionable financial reports that provide insights into business performance.
Growth Plans and Future Outlook
Wafeq anticipates enormous growth in the wake of its expansion plans. Currently, over 630,000 invoices are created every month through its platform, with total monthly invoiced amounts exceeding $117 million.
Commenting on the deal, Talal Alasmari, the founding partner of Raed Ventures, said, "We are thrilled to back Wafeq as they solve a problem that impacts thousands of businesses in the region. Their innovative approach to accounting and compliance has the potential to revolutionize the way businesses operate."
Conclusion
The introduction of VAT in the GCC region created an opportunity for innovation and growth in the business landscape. Wafeq’s response to this regulatory change has been nothing short of remarkable, with its scalable accounting and e-invoicing SaaS solution poised to drive significant growth in the years to come.
As businesses continue to navigate the complexities of VAT compliance, Wafeq’s innovative platform is well-positioned to meet their needs. With its strong focus on SMEs and commitment to regulatory compliance, Wafeq is an exciting example of how regulatory change can drive innovation and growth in the region.
About the Author
Nadim Alameddine is the founder and CEO of Wafeq, a startup that offers scalable accounting and e-invoicing solutions to businesses in the UAE and Saudi Arabia. With a strong focus on regulatory compliance, Wafeq has established itself as a leader in the market.
