Open banking startup Tarabut Gateway raises $32M

Tarabut Gateway, an open banking startup operating in the MENA region, has raised $32 million in new funding as it seeks to expand its operations in Saudi Arabia.

Why it matters: The MENA region is a fast-growing market for open banking, as consumer adoption and local regulation is spurring more banks and fintechs to share their data.

What it does: Tarabut provides open banking infrastructure to banks and fintechs operating in the UAE, Bahrain and Saudi Arabia.

Between the lines: The firm hopes to expand its footprint in the Saudi market as the kingdom accelerates fintech innovation through both regulation and strategic investment.

• "Saudi is a very important market for us," Tarabut founder Abdulla Almoayed says. "[It] is looking to license 500 fintechs over the next five years, which feeds into the requirement for an infrastructure provider ... that can enable and accelerate the journey of a lot of these fintechs."

Details: The round was led by Pinnacle Capital, an investment firm focused on backing startups in the Saudi market, and includes participation from Aljazira Capital, Visa and Tiger Global.

• "The idea was, 'Let's work with strategic investors in Saudi Arabia to create a very strategic go-to-market strategy to deploy out there,'" Almoayed says.

Of note: Pinnacle's investors come from Watar Partners, the Saudi firm that backed the country’s first unicorn — e-commerce startup Jahez.

• The round also marks Visa’s first investment in an open banking startup in the MENA region.