When Parthi Duraisamy worked as a consultant at McKinsey’s Dubai office, he realized that the American Express cards used for corporate expenses were seldom accepted in the Middle East, forcing him to cover substantial travel expenses himself and painstakingly file numerous expense reports. “It was a constant pain,” Duraisamy said. “I spent weekends uploading receipts and manually reconciling every expense.”
Now, Alaan, the company Duraisamy co-founded with fellow McKinsey alumnus Karun Kurien, is the Middle East’s leading spend management platform and has secured $48 million in Series A funding led by Peak XV Partners, with participation from notable investors, including the founders of 885 Capital, Y Combinator, 468 Capital, and Pioneer Fund. Alaan’s unicorn customers’ founders, such as Hosam Arab (Tabby), Mudassir Sheikha (Careem), and Khalid Al Ameri, also invested.
This funding round is among the largest Series A rounds for a fintech in the region, challenging Saudi Arabia’s buy now, pay later platform Tamara, which raised $110 million previously. GV Ravishankar, Managing Director at Peak XV, stated, “The category has demonstrated strong product-market fit in the MENA region, and Alaan stands out as the category leader, thanks to their customer-centric and product-led approach.”
Despite this achievement, Alaan faced challenges on its journey to becoming a category leader. The fintech raised a $2.5 million seed round in mid-2021 but couldn’t launch for nearly a year due to regulatory complexities and the need for banking partnerships in the UAE. Its expansion into Saudi Arabia also posed challenges, as securing approvals from the country’s apex bank took years.
“The biggest challenge we faced, both in the UAE and Saudi Arabia, was simply going live,” the CEO shared. However, Alaan made strides, such as integrating Apple Pay into its B2B offerings, previously unavailable in the region.
In early 2023, Alaan integrated OpenAI into its services, a move that shaped its product strategy. Although its initial chatbot rollout didn’t gain traction, the company shifted focus, using AI to streamline processes like receipt matching, reconciliation, and VAT extraction, aiding businesses in navigating complex VAT regulations.
Alaan claims its platform has saved finance teams over 1.5 million hours of manual work and plans to invest further in automation. Since launch in 2022, Alaan has processed over 2.5 million transactions for more than 1,500 finance teams, including G42, Careem, Tabby, and Lulu Group. The company is profitable, having spent $5 million to generate $10 million in revenue. Duraisamy attributes this success to a disciplined approach instilled by YC and mentors.
The fintech aims to replicate its growth in Saudi Arabia, where it launched earlier this year, doubling transaction volumes month over month. The Series A funding will support this expansion, facilitating hiring across sales, customer success, and compliance, while further advancing AI-driven finance automation.
As one of the largest Series A rounds in MENA, Duraisamy was asked if Ramp’s explosive growth influenced investors’ confidence in Alaan. He responded, “Investors focus on fundamentals: our capital efficiency, revenue, and go-to-market strategy. Regardless of Ramp’s success, we raised this amount based on our strong fundamentals.”