Two former McKinsey consultants just closed one of the Middle East’s largest fintech funding rounds. Their company, Alaan, secured $48 million in Series A funding to expand its AI-powered expense management platform across the region.
The funding round was led by Peak XV Partners, formerly known as Sequoia Capital India & SEA. Other investors include Y Combinator, 468 Capital, Pioneer Fund, and founders from 885 Capital. Notable regional entrepreneurs also joined the round, including Hosam Arab from Tabby, Mudassir Sheikha from Careem, and popular YouTuber Khalid Al Ameri.
This deal stands as one of the largest Series A rounds for a fintech company in the MENA region. For comparison, Saudi Arabia’s buy-now-pay-later platform Tamara raised $110 million in a similar round two years ago.
McKinsey Pain Points Spark Fintech Solution
Parthi Duraisamy and Karun Kurien discovered their business opportunity while working at McKinsey’s Dubai office. American Express corporate cards, standard in their consulting work, were rarely accepted across Middle Eastern businesses. This forced Duraisamy to pay expenses out of pocket and spend weekends filing manual expense reports.
“It was a constant pain,” Duraisamy explained. “I’d spend my weekends uploading receipts, reconciling every expense manually.”
The two consultants launched Alaan in 2021 to solve expense management problems for businesses across the Middle East. The company now processes over 2.5 million transactions for more than 1,500 finance teams, including major regional enterprises like G42, Careem, Tabby, and Lulu Group.
AI Integration Transforms Manual Processes
Alaan became one of the first Middle Eastern companies to integrate OpenAI into its services in early 2023. However, their initial approach failed to gain traction. The company launched a chatbot, expecting users would enjoy conversational interactions around spending. Customers showed little interest.
The fintech quickly pivoted. Instead of customer-facing AI features, Alaan focused on background automation. The platform now uses AI to streamline receipt matching, reconciliation, and VAT extraction, particularly valuable in a region with complex tax regulations.
The company claims its platform has saved finance teams more than 1.5 million hours of manual work. This automation-first approach helped differentiate Alaan from traditional expense management solutions.
Regional Expansion Faces Regulatory Hurdles
Despite raising $2.5 million in seed funding in mid-2021, Alaan couldn’t launch for nearly a year. Regulatory complexities and banking partnership requirements in the UAE created significant delays. The company faced similar challenges expanding into Saudi Arabia, taking years to secure approvals before launching in January 2025.
“The biggest challenge we faced, both in the UAE and Saudi Arabia, was simply going live,” Duraisamy shared.
However, Alaan moved quickly in other areas. The company pioneered Apple Pay integration for B2B offerings in the region, bringing previously unavailable payment options to Middle Eastern finance teams.
Profitable Growth in Expanding Market
Unlike many growth-stage fintechs, Alaan has achieved profitability. The company spent $5 million to generate $10 million in revenue, according to Duraisamy. He credits Y Combinator mentorship for instilling financial discipline in a market where many competitors focus purely on payment volumes.
In Saudi Arabia, where Alaan launched earlier this year, transaction volumes have doubled month-over-month for the past six months. This growth comes as the broader MENA startup funding market shows mixed signals.
According to MAGNiTT research, MENA was the only region across emerging venture markets to record both funding and deal count growth in H1 2025, reaching over $1 billion across 300+ deals. However, Wamda reported that June 2025 saw startup funding plummet to just $52 million across 37 deals.
Corporate Expense Management Market Boom
Alaan’s funding comes as the global expense management software market experiences rapid expansion. Industry analysts project the market will reach $16.48 billion by 2032, growing at a 10% compound annual growth rate.
The Middle East, in particular, shows a strong appetite for fintech solutions. UAE fintech startups raised $265 million in 2024, representing one-third of national startup funding. The UAE fintech market is projected to grow significantly as businesses digitize financial operations.
GV Ravishankar, Managing Director at Peak XV, highlighted Alaan’s market position: “The category has demonstrated strong product-market fit in the MENA region, and Alaan stands out as the category leader. Their customer-centric and product-led mindset has enabled them to build solutions tailored to modern finance teams.”
Saudi Arabia Focus Drives Next Phase
The Series A funding will accelerate Alaan’s expansion in Saudi Arabia, where the company sees significant growth potential. The investment will support hiring across sales, customer success, and compliance teams while advancing AI-driven finance automation capabilities.
When asked whether Ramp’s explosive growth in the US market, with valuations doubling to $22.5 billion this year influenced investor appetite for Alaan, Duraisamy emphasized local fundamentals over global comparisons.
“When you talk to investors, what really matters for a company at our stage is the fundamentals: how capital-efficient we are, how much revenue we generate, how strong our go-to-market motion is,” he explained. “We are not in a market where size is an advantage, like the US or Europe. So, regardless of whether Ramp was able to raise or not, I think we would have raised this much because our fundamentals were very strong.”
The company plans to double down on AI agents that can handle complex financial workflows, positioning itself to capture more of the Middle East’s growing appetite for automated business solutions.
