The Story Of Scaling Leo Bank From Idea To Exit In The Middle East. Part II: Scaling Up (Series A,B)
Case study written for the upcoming launch of Scale Up MENA! (Aug 2025). Read part I here and part III here.
Closing the series A has been tough. “This is by far the hardest thing I have ever done”, Adnan was bone tired. Leading the process, investor meetings, DD and final negotiations had been hard. But, the round had been a huge success, a new strategic investor was onboard, and the focus was now 100% on hitting the key revenue milestones. $10M revenue, $50M revenue and $100M revenue.
How long would that take?
Looking back, it was the workshop with DFDF that had laid the foundation for the Series A success. Navigating the Road to Series A was a series of workshops hosted by Dubai Future District Fund and AWS, delivered by Chris Rangen. That was one of the key perks of being located in Dubai. The ecosystem was strong, supportive and perfectly suited for fast-growing companies. Maheen and Adnan had both attended the workshop.
Initially, it was overwhelming. 5 phases, 43 unique steps to nail your Series A. It was a lot to take in, but wow!
Sure, Only 10% – 15% Of Companies Successful Make The Jump From Seed To Series A, But This Was A Tall Order Still.
The Funding Journey. 5 phases, 43 steps to nail your fundraising rounds
Adnan had taken three main points away from the workshop.
1. Set your fundraising team
2. Build your long investor list and investor CRM
3. Aim for five competing term sheets
(See Funding Journey for all 43)
Those three points had become their focus.
For the fundraising team, they discussed with the team and agreed. “Maheen and I will take six months, and only, only focus on closing our series A”. The others had agreed with some hesitation. The team had grown to 21 people by now, there was a lot of young talent on the team, but leadership was still needed. “Liz will take over as co-CEO”, Maheen had decided.
Your Funding Team. A key success factors to land your Series A and beyond
The best thing they ever did on the fundraising team was assign two of the data analyst to a skunk project. Together with Maheen and Adnan, the two analysts made up the fundraising team. In just two weeks they built an impressive AI-engine, allowing them to gather 2.400 investor prospects for the A-round. Analyzing track records and strategic fit, the list was cut down to 800. Analyzing capital for follow-on rounds and exit track record, the list was further reduced to 68 names.
Out of these 42 initial meetings took place. The one meeting in Singapore had really stood out. “We will sell your assets to a NewCo in Singapore, do a recapitalization, get rid of your old investors and then inject 500M in growth capital”, the Managing Partner had said. The meeting ended quickly.
In the US, many of the initial meetings centered on use of AI, roadmap to US IPO or downside protection. “It really seems like 3X liquidation preference participating is the new normal here. The valuations may be higher than back home, but the terms are harsh and demanding. Let’s try to find a investor group in MENA we can work with”, Maheen had said as they were flying back from a series of meetings in New York.
Fortunately, via Shorooq’s network, they had found multiple options for the A-round in the region,
Sure, the conversations, due diligence and term sheet discussions had taken months, but ultimately, they were down to three solid term sheet; still not the five they were targeting but still ok. With 800.000 users the user growth was strong, but revenue was still lagging. They had aimed for 3M revenue before closing, but the reality was closer to $2,1M; still some ways to go. This lower-than-forecast revenue, also came back to bite during term sheet discussions.
Three competing sets of terms sheets at Series A
Venture Souq’s Fintech Fund was supportive, and really wanted to get a deal done. “With your metrics, we can do $1M $8M pre, and really help connect you for larger, full series A in about 6 months time”.
The team at BECO had been incredibly supportive and their whitepaper “Strategy in AI’s Shifting Sands: A Venture Framework for MENA Value Creation” had grown into a manifesto for the AI team at Leo. “We would love to work with you, but the metrics you have today does not justify anything above $25M post”, Abdulaziz had stated. Famous for their views on there are only two venture-return size companies born in MENA every year, BECO did not have full conviction on Leo’s return potential yet.
In the end, a structured syndicate come together, co-led by Michael at Golden Gate Ventures, Medea at Global Ventures and Monk Hill taking a minor role. The terms landed on:
-$30M pre-money
– $10M round size, 4M from GGV, $4M from GV and $1,5M from MH.
– Two advisors were assigned a small allocation in the same round.
– 1X liquidation preference participating
– Reset of vesting for the founder team
“The Region’s Banking Favorite Secures Strong Series A”, Read The Press Release When The News Were Released During GITEX.
Cap Table, Post-Series A
Leo Bank’s cap table, post Series A. founders at 40%, with 7,8% remaining in ESOP
Setting Up A Strategic Board
After closing the Series A, Omer had been clear on his recommendation. “We are going to set up a long-term, strategic board that can take us all the way”. The founders had not really seen the need. “We are doing fine”, Maheen had said.
But the investors were clear. A strong board will only help the team accelerate. It was agreed that the board would have two founder seats, Maheen and Adnan, two investor seats and one industry expert. James P. Gorman, former CEO of Stanley Morgan was elected Chairman of the Board after a three month search period.
Team Shake Up
The trouble had been brewing for a while. Maybe it was the stress from scaling from 800.000 users to 2,5M in just six months. Maybe it was just a consequence of having worked closely together for the past 3,5 years. Everyone had felt it, but no one had wanted to get into it.
Looking back, the fallout that followed was almost inevitable. “Listen, I have worked my butt off for years!”, Malik almost shouted. “No, you are not just leaving!”, Maheen replied. The stress, the lack of technical depth on the team, the demands of scaling towards a series B. The journey was not quite what Malik was expecting.
As the technical genius he had built the first generation of the platform, but the reality was that the first generation had just not been scalable. Maheen had spent months recruiting a technical team around him, only to realize that the tech stack they had built just was not very scalable. It had all come to head in one of the engineering team sessions. “So, you are telling me we have to rip out and replace our entire back end platform?”, Maheen had asked the Senior Platform Lead. He has just joined from Klarna, with previous CTO experience from two fintechs in London. The decision had been made. The entire platform was getting rebuilt, redesigned, restructured from scratch. That was the moment when Talik started drifting. He was no longer up to the task. His company had outgrown him. Probably, Maheen could have handled it then.
Weeks had gone by, when Malik broke the news. He had just accepted a role with Microsoft. He would be leaving within the week. He also announced, “I am taking my co-founder equity with me”. His departure from Leo Bank was quickly turning sour. Maheen felt a ting of panic. She had seen too many broken cap tables, with co-founders walking away with large equity positions, leaving the company uninvestable for upcoming rounds. “Foundational equity”, she thought. We have already covered this! She dug through the company files while calling her contact at Shorooq.
Sure enough, the initial foundational equity agreement the four had signed 3,5 years ago covered exactly this scenario. Any unvested shares, in the case of a founder leaving, would go back into the ESOP pool, to be allocated by the CEO. The vesting terms were even reset at Series A, with 7-year vesting and a 1-year cliff. The paperwork was all signed. Malik, it turned out, would be walking away with zero equity.
The next day, Maheen, Adnan sat down with Malik, back at their old Starbucks at the DIFC. “Listen, we don’t want to part ways on bad terms. You have worked hard, we all have, the last 3,5 years. Yet, we have a long, long way to go. We need to manage our cap table for long-term success”, Maheen had said. It took a few days, but in the end, the team agreed on a 1% equity post to Malik, and retain him as a senior advisor for the next 36 months. “Imagine, where would we have been if we did not have the foundational equity paperwork in place”, Adnan said as they closed the deal and parted way with Malik.
Cap Table – Updated Post-Malik’s Departure
Cap table, updated post one of the founders leaving. Thanks to good paperwork, the most of the equity went back into the ESOP.
Market Expansion: Where Do We Ramp Up Next?
“Which of the next markets should we expand into, and how soon?”, that was the question Liz had focused on the last six months.
Ever since they closed the Series A, the mantra was growth, growth and growth. But, more than just growth, her team had managed to build an incredible AI powered tech stack, turning her 25 people team into a 24/7 growth army. “With the new stack, we are automatic processes that would have taken us 3X as many people and months to complete. We have, maybe, the most native AI-GTM stack, by any startup in MENA”. Alex, her head of AI infrastructure had been a find!
She had poached him from OpenAI during one of the OpenAI ecosystem events. He was, it turned out, an AI engineering genius. The team used AWS SageMaker as the core. On the customer facing side, tools like Segment, 6sense, Clay Brand24, Jasper.ai, WhatsApp Business API, Phantombuster, Voiceflow, Madkudu Clearbit, Synthesia and Revenue.io were built into a 24/7 growth engine. “This thing is getting smarter by the minute”, Alex had said during one of their working sessions. Alex had recruited a deeptech team from AWS, Salesforce, OpenAI and Anthropic to build out a new kind of automation ecosystem for Leo.
Using this system, Leo was now able to expand flawlessly across MENA. The system even recognized different regulations in different markets and instantly adapted the platform in line with these regulations. The same had started happening by segments, were people were increasingly seeing a highly, highly personalized version of the platform, from first prospecting touchpoint all the way through daily usage.
Revenue Growth
“How do we build a successful ARR engine to get us to 100M revenue and beyond?”, that was one of the nine questions Maheen had drawn up when they started. Liz, together with Alex and the deeptech team had built just that.
On The MENA Startup Show, Liz had called this “Our beautiful, hyper scaling engine”. Well, the engine had allowed Leo to blitz scale, from 800.000 users to 2,5M users, and now rapidly approaching 5,5M users, in just 12 months. Revenue was starting to pick up, and the finance team was forecasting a robust 35M revenue for the year, looking at $75M next year.
“This is what blitscaling feels like”, Maheen had said during an all-hands meeting.
Leo Bank’s three remaining founders on stage for the monthly all hands meeting. As the company grew to 85, then 120, then again 200+ employees, leadership and culture become a far bigger challenge than the team was ready for
Momentum Going Into Series B
“We need to think about our Series B as stepping stones into the world of large capital allocators”, James had said during a board meeting. Maheen knew he was right.
Thanks to the investor CRM and AI automation they had built for the Series A, and the work the Investor Relations team had been doing, sending monthly updates, taking regular check in calls, hosting investor roundtables in different cities and regularly taking deep dive sessions with the target prospects, the round came together in record time. Sure, they now had 4.800 names in the investor CRM, but there was only a handful that that would really like to work with.
In the end, the team had two competing term sheets, from Wamda Capital and MEVP. Both of them solid investors that could structure rounds from late seed to Series B.
Two competing term sheets from two great Super Investors, Wamda Capital and MEVP. In Scale Up MENA, you will meet and navigate 100’s of competing investors and term sheets. Are you able to unpack the terms here?
Cap Table Post Series B
Cap table, post series B. Now with new investors, two team SPVs, two advisors, the cap table is starting to get interesting.
The Series B deal was a big step up in valuation, taking the company from $40M last post in the Series A, to $300M pre-money for the B. Wamda showed high conviction with a $40M investment, and Golden Gate Ventures, Global Ventures and Monk Hill all followed on with 500.000 each, as per the term sheet requiring three participating co-investors. Management also issued Team SPV #2, with 4.000 shares to the team, who was now quickly growing towards 85 people across four offices. The strike price was set at a 100, instantly giving the staff a 12x multiple on their investment. Of course, the shares were only available on a 7-year vesting schedule with a 1-year cliff, virtually locking in talent to stay with Leo Bank.
Now, The Stage Was Set For The Next Growth Phase. Could The Team Take Leo Bank Past Tabby’s Explosive Growth?
Could they hit 15M users and $500M revenue?
Was there a $1BN, a $3BN valuation on the horizon?
Could they find the growth hacks to scale past Careem’s $3,1BN exit?
Read Next…
Part III: Growth Stage (Series C,D To Exit)
“What does your outcome canvas look like?”, the question from the investment team at Oman Future fund had taken the founders aback. Outcome? Canvas? In exploring a lead candidate for the Series C, it was clear that the conversations, the expectations and the strategic thinking was going to be a big step up from the conversations they had back at Series A. “Are you aiming to list in Riyadh, London or the US?” …. (read part III here ).
Part I: The Early Days (Start Up Phase, Seed)
“There is absolutely a market for new, innovative banking solutions in the region”, Malik said. Sitting at the Starbucks at the DIFC in Dubai, the four friends were deep in discussion about their new startup idea. The discussion had been simmering for nearly two years, but really picked up in the last four weeks…. (read full part I here)
Scale Up Mena!
In Scale Up MENA! you and your team members step into the shoes of a founder team in MENA. You select amongst 30+ case companies. Your task: scale your new case company from an early idea to a successful exit, while also competing with 3 to 20+ other teams, all trying to outcompete and outrace you. Along the way, manage the nine building blocks Maheen identified early on, raise multiple rounds of financing, accelerate revenue velocity, scale with AI tools and try to outcompete the likes of Careem and Tabby. Are you up for it? Are you ready to Scale Up In MENA!?
Globally, more than 3.500 founders, investors and ecosystem builders have mastered cap tables, growth strategy and exits with Scale Up! Now, for the first time, we are ready to launch a 100% MENA version.
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Launching August 2025. Learn more.