The devaluation of the Egyptian pound back in 2016 was intended to preserve its foreign currency reserves, attract foreign direct investment and allow the country to meet the International Monetary Fund’s demands for a $12 billion loan. 

The Central Bank of Egypt (CBE) devalued the currency again in March this year in the hopes of halting the outflow of capital, but one of the biggest drawbacks of this policy has been the rise in the cost of goods for consumers. This has resulted in a shift in shopping habits and buying patterns as consumers increasingly seek out incentives and discounted deals. 

Yet amid this economic struggle, several fintech startups in the country have found an opportunity to this meet consumer demand to save money. Lucky, is one such startup, which seeks to digitise the cashback sector, tapping into the fast-growing e-commerce sector in Egypt. 

Founded by Ayman Essawy and Momtaz Moussa, Lucky started as a cashback marketplace with a vision to becoming a fintech super app, spanning the gamut of customer credit financial services. Last year, Lucky began the rollout of its buy now pay later (BNPL) feature after partnering up with financial services provider AMAN, with its main target being those who are locked out of the credit-card market.

"We commenced operations in 2019. The reason why we started initially [with] cashback was because the regulatory framework in Egypt at that time was not there. Things have changed for the best with the new regulations being put in place. Fintech players require a lot of support when it comes to the regulator and how they can put the laws and the rules to actually support the financial services in each sector," says Moussa.

Given that most purchases are still done at brick and mortar stores, the app enables customers to avail in store cashback, which further helps increase offline to online conversion rates, all while providing instant gratification to the ever-price-conscious consumer.

Prior to founding Lucky, the duo also founded d-square, a B2B loyalty provider company back in 2012. Both businesses have different value propositions, but help address cashflow pain points for retailers and small businesses. Given the currency instability, the duo glimpsed the opportunity and launched Lucky in 2019 to enable retailers to address short-term liquidity challenges. 

“When we started d-square back in 2012, we realised that the Egyptian consumers were very much focused on reining in their expenses, but this was only the case with the lower social segments. Since 2017 onwards, after the devaluation of the Egyptian pound, savings became the main trigger towards consumer behaviour and the purchasing power of all Egyptians across different social segments. This has also impacted several industries; for example, if you go to the banking sector, the payback that each bank is giving on top of the credit card is basically one of the main reasons any consumers choose this credit card versus another one. The same applies to the telecom operators in terms of pricing," Essawy explains.

Lucky targets several industries such as fashion, food and beverage and electronics, and works with over 30,000 merchants. 

The growth potential and opportunity in the cashback sector has generated a lot of interest from investors. Last month, Lucky completed a growth round of $25 million to expand its network of online and offline brands across different segments and support its geographical expansion plans. Similarly, online cashback marketplace WaffarX raised a seven-figure Seed round back in December 2021. Besides Waffarx, Lucky also competes with the likes of Yagni and Yashri, all offering cashback on purchases placed online through their platforms. 

The digital cashbacks sector is set to grow by greater leaps as the fintech segment continues to evolve. But, the growth of the market can be waylaid by the country's existing poor digital payment infrastructure and lack of proper tech support, which can make the overall customer experience far from optimal. 

Lucky itself has faced criticism from its customers for struggling to deliver a quality service. 

"Lucky completes an average of 280,000 transactions monthly and has more than eight million registered users on its platform. [We have a large], if not the largest customer base compared to other fintech startups, that's why we sometimes expect to receive complaints from our customers. I think it is pretty normal. Truth is, all the fintech services in this country are still at a nascent stage. On our side, we are working tirelessly to offer the best service quality, this helped us foster our customer base in the past period," Essawy adds.