(Bloomberg) --
Sequoia Capital has made its first investment in the Middle East by partnering with a venture capital fund that hired soccer star Mesut Ozil last year.
The U.S. venture capital firm led an initial funding round for Egyptian digital banking app Telda, with participation from Berlin-based Global Founders Capital and Class 5 Global, which Ozil joined as a strategic adviser. Telda said it raised $5 million.
Digital banks have taken off with the spread of finance technology in a region where millions lack access to banking services. Egypt, the most populous Arab nation, is among the 10 countries most reliant on cash and with the highest share of the unbanked population, according to an estimate by the Merchant Machine website.
“The combination of a young tech-savvy population, growing smartphone adoption, fintech-friendly regulation -- juxtaposed with low banking penetration and some of the most profitable banks in the world -- make Egypt ripe for a digital banking experience,” said Class 5 Global Managing Partner Youcef Oudjidane.
Some neobanks, or digital-only banks, are offshoots of traditional lenders or were created as independent entities. Foreign players like Stripe Inc. are meanwhile entering the market as local firms such as Saudi payments firm Tamara take advantage by attracting funds.
Telda was set up only months ago by Ahmed Sabbah, who previously founded Egyptian bus-hailing service Swvl, and Youssef Sholqamy, a former engineer in Uber Technologies Inc.'s infrastructure team.
Sequoia Capital's latest investment in emerging markets payments firms follows deals in India and the Philippines. For Global Founders Capital and Class 5 Global, it's their first foray into Egypt.
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