A Flow 48 Update & Introducing the ‘’212 Venture Fellow Program’’

Flow48

In November 2023, we completed our investment into Flow48, our second fintech investment after Iyzico in the decade-long life of the Regional Fund. 212 has become part of this exciting alliance which is led by Flow48 and consists of both our long-standing partners SpeedInvest & Endeavor Catalyst and new partners Daphni, TLG, and many more.

If you want to refresh your memory on the deal and Flow48’s business, you can read this post by Mike Butcher at Techcrunch and the Wamda press release.

In this blog post, rather than going into the deep details of Flow48 as a company, I want to highlight why we partook in this round and introduce the 212 Venture Fellow Program, which led to our initial connection with the Flow48 team.

Flow48 Investment

Let me start with the highlights of our investment thesis, which immediately ticked the boxes we look for at 212, such as:

1. A Complementary & Experienced Team
2. A Big Problem & Thriving Markets
3. A Technology-first Approach

• A complementary and experienced team supported by significant equity and debt investors: Flow48’s team consist of seasoned entrepreneurs, bankers and engineers, which is a necessary blend while building a financial institution from the ground up. Meanwhile, the company’s investor stack comprises multiple equity investors with solid success stories in fintech across markets (developed & emerging) and debt investors who are essential for scaling a finance business. From day one at 212, we knew we were investing in an alliance led by a great CEO, Idriss Al Rifai, rather than an early-stage startup company.
• Great potential of the ME region and Flow48’s focal position therein: For the past 15 months, we have been spending significant amounts of our time learning more about the thriving tech and business ecosystems of the ME region, visiting UAE (a core market of Flow48), KSA, Jordan, Egypt and familiarizing ourselves with entrepreneurs in the area. These regions, especially the former two, are on the path to becoming crucial regional business and digitalization hubs for various reasons (which we will discuss in depth in another blog post). As in every developing ecosystem & business landscape, we believe the emergence of financial technology companies and alternative financing options will be crucial for further economic development.
• 212 strives to back teams tackling big problems: Flow48’s target regions still face significant gaps in SME financing. Despite SMEs representing nearly ⅓ of GDPs for all UAE, KSA and South Africa, SME% of loans stand around only at 10–20% of the banking portfolios. Fundamental problems that prohibit the traditional players are information asymmetry and lack of risk appetite. Considering that SMEs will be essential drivers of these striving economies as they persist in their growth, alternative solutions are called for.
• Innovation is key in the world of finance: As backers of technology creators, we believe innovation is a key enabler in the finance sector, especially when targeting previously underserved segments. Flow48’s risk-scoring systems and customer acquisition channels are perfect examples of technological enablement in a traditional business line as simple as financing. The company collects data on its targeted customers via integrations to tech stacks, including banking, payment gateways, ERPs and e-commerce. Their system is expected to decrease the information asymmetry traditional players face. Meanwhile, the same channels also yield new customers to the company.

On a concluding note regarding the investment, we want to give kudos to Idriss, Karim, Arjun, and Mario for their super smooth help during the investment process while sincerely thanking especially Speedinvest, Daphni and TLG teams for their ongoing support to us as existing investors. Finally, we would like to welcome the wider Flow48 team to the 212 family and note we are looking forward to our partnership with our most valuable new co-investors.

We are sincerely excited to face what is next and hopefully big, together!

212 Venture Fellow Program

As mentioned in the introduction, one of the valuable highlights of this deal was that it was introduced to us by Utku Dalan, a Stanford MBA student and one of the first Venture Fellows for 212. Since early 2023, we have been laying the initial stones of a fellowship program across various well-known universities in the US & UK through cooperating with Masters students. The idea is to establish a win-win relationship between 212 and them. These fellows help us with brand building at their respective locations (such as coordinating events & or attending them on 212’s behalf) and introducing diaspora entrepreneurs to us while experiencing day-to-day work streams with different departments within 212.

For more on the program, I wanted to share this quote by Utku for him to convey his experience with the program and the Flow48 investment.

‘’My journey into fintech began with a deep fascination for how technology can revolutionize financial services at Mastercard during my management consulting years. As one of 212’s first VC Fellows, I focused on the fintech space, specifically lending and SME solutions in the MENA region. This thesis led me to Flow48. I was also inspired by the founder, Idriss, an MBA grad, ex-consultant and serial founder. Knowing the 212 team’s interest in the MENA region & fintech thesis therein, I wanted to connect him right away with 212 for a potential investment deal.

Since 212 had recently started its program, it was the first time for an overseas VC Fellow to source a deal. However, the VC fellowship at 212 has been a multifaceted learning experience, extending far beyond deal sourcing. It has involved building 212’s brand, particularly on the Stanford campus, and engaging in dynamic discussions on VC and entrepreneurship in emerging markets. These experiences have enriched my understanding of the VC landscape, teaching me the nuances of investment strategies, the importance of network building, and the evolving nature of fintech innovations. This role has been instrumental in shaping my perspective on venture capital’s role in global economic growth.’’

We thank Utku for his ongoing valuable contribution, banking on the early signs of success of the program and value-add to its fellows (please also meet Orcun, our NY Fellow); we also want to note that we aim to formalize and expand this program to other universities in the particular regions. As we aim to internationalize further at the Regional Fund as well as expand vertically to earlier stages of investment (Simya) and horizontally (Next) at 212, we sincerely believe Venture Fellows could play a pivotal role in 212’s future success.

If you are a Masters Student at universities in Türkiye, Europe, US or Middle East, please stay tuned at our website for the program’s application page. Of course we would like your earlier reach-out via: cem@212.vc, basar@212.vc or ozge@212.vc, if you would like to learn more in advance ;)

Looking forward to expanding the 212 Network!