Iraq’s InstaBank Raises US$15 Million To Launch And Scale

InstaBank, an Iraq-based digital banking platform, has secured US$15 million in funding to fuel its launch and growth, including a $3 million anchor investment from the UAE-based venture capital firm and venture builder EQIQ.  

Founded in 2025, InstaBank—which is officially called Al-Fawr Digital Bank—has been designed to offer scalable, tech-enabled banking services in one of the most underserved financial markets in the MENA region. In an interview with Inc. Arabia, InstaBank founder Hussain Qaragholi noted that though Iraq is the fourth-largest economy in the MENA, 83 percent of the population remains unbanked. 

“Iraq’s banking sector is dominated by inefficient public and private institutions that primarily profit from foreign exchange and government salary services,” Qaragholi said. “Most private banks offer low service quality and have struggled to evolve beyond foreign exchange (FX) transfers, especially after the country’s Central Bank ended the Al-Mazad auction system. As a result, the sector is underserved in core areas like retail banking, small- and medium-sized enterprise (SME) lending, and digital payments. Deposits remain low, credit penetration is minimal, and customer experience is poor. These structural weaknesses create a significant opportunity for digital challenges." 

InstaBank’s strategy is thus centered on solving these gaps from day one. “With rising demand for e-payments and modern financial products, the market is wide open for tech-driven banks to offer inclusive, customer-focused services,” Qaragholi explained. “Traditional players are poorly positioned to adapt, giving new entrants a chance to leapfrog legacy models and redefine financial access in Iraq.” 

Behind InstaBank’s vision is Qaragholi, an Iraqi-American finance veteran who is bringing decades of sovereign advisory and capital markets experience to a market that he believes is on the cusp of a digital leap. Qaragholi, who previously held senior roles at Merrill Lynch, Citigroup, and Deutsche Bank, also played a leading role in Iraq’s historic $22 billion debt restructuring and oversaw multiple sovereign bond issuances for the country. Now, he’s channeling that experience into a bold fintech play aimed at tackling Iraq’s longstanding financial infrastructure gaps. 

“Sovereign advisory work is ultimately about building trust and having a positive impact, not only with the client, but across a broad ecosystem of stakeholders,” Qaragholi said. “During Iraq’s 2004 commercial debt restructuring, we came in on the heels of the US-led Paris club agreement, which secured an 80 percent debt reduction from creditors for Iraq’s future generation.” 

That formative experience, Qaragholi noted, required years of coordination with Iraq’s top institutions and regulators, including the Central Bank. And that foundation of trust now enables him to take a pragmatic, infrastructure-driven approach with InstaBank—one focused on aligning with regulatory priorities while addressing deep-rooted gaps in the financial system. “The mix of these disciplines, sovereign advisory, structured finance, credit, and fintech, has directly shaped how I’m building InstaBank: with regulatory trust, institutional discipline, and a focus on solving structural gaps through inclusive, digital-first banking,” he said. 

Qaragholi is also no stranger to fintech. Since 2022, he has worked on building and scaling platforms in the UK and Germany, which run the gamut from SME lending to blockchain-based infrastructure finance. Those experiences have directly informed how InstaBank is approaching product design and go-to-market in Iraq, where it is designing around a market that’s shifting rapidly from cash to digital behavior. “With 98 percent mobile and 82 percent smartphone penetration, Iraqis are increasingly connected,” Qaragholi pointed out.  

And while Iraq’s banking infrastructure lags, its business and consumers are already operating in a digital-first world—pushing demand for modern financial tools. “SMEs are digitally active—72 percent market online, and 42 percent deliver services digitally,” Qaragholi said. “Yet, financial services remain behind. That gap is closing quickly. Today, bank cards exceed 20 million, driven in part by government mandates that require payments for fuel and public services to be made by card. Point of sales (POS) terminals have surged to over 23,000, enabling real-world usage." 

However, Qaragholi believes the real opportunity lies in getting the basics right. “Iraqis aren’t asking for a revolution,” he said. “They're just looking for digital onboarding that works, seamless transfers, and transparent fees.” To that end, InstaBank will leverage artificial intelligence (AI) to build accurate, data-driven credit profiles. “This will allow us to price risk responsibly, offer relevant products, and build lasting customer relationships,” Qaragholi noted. “Our own market surveys confirmed what the data suggests: demand for quality banking is strong.” 

Beyond improving onboarding and payments, Qaragholi envisions InstaBank as a long-term financial partner for Iraqis—especially underserved segments like SMEs and youth. “Iraq’s fintech future will be shaped by its young, mobile-first, and increasingly connected population,” he said. “With 45 million people, 60 percent of them working age and half under 25, Iraq is both resilient and massively underserved. Mobile and internet penetration have surged, social media activity is nearly universal, and e-commerce is growing at 16 percent compound annual growth rate (CAGR). Over the next 3–5 years, the greatest disruption will come from delivering basic financial services—digitally, transparently, and at scale: onboarding, payments, savings, and credit for individuals and SMEs.” 

When asked if he has any regional expansion plans for InstaBank in the pipeline, Qaragholi said that he is keeping a close eye on market conditions, but he remains focused on Iraq for now. “While InstaBank’s model is designed to be scalable, our core focus remains Iraq, where the combination of digital momentum, regulatory openness, and unmet banking needs presents a uniquely compelling opportunity,” he said. “The market is undergoing structural change, and we believe we’re well-positioned to help shape the next phase of its financial evolution." 

Investor appetite for InstaBank’s model has been strong. “We’re fortunate to be in a position where the round is significantly oversubscribed,” Qaragholi said. “From the beginning, our goal wasn’t just to raise capital—it was to bring on strategic, long-term partners who share our vision and can contribute meaningfully beyond the cheque.” Speaking about EQIQ specifically, he called it a “venture builder with a strong track record and deep conviction for the Iraqi and regional markets,” adding that its alignment has helped shape the quality of the round. 

As Qaragholi thus gets set to roll out InstaBank’s offerings in Iraq, the entrepreneur is also well-equipped to share advice for other founders operating in emerging markets. “Building in underserved markets requires a fundamentally different mindset,” he said. “Don’t wait for perfect rails—design around the gaps and approach the market by identifying real use cases rather than simply trying to sell a product. Be willing to work hand-in-hand with regulators, patiently building trust over time. In frontier markets, progress is built as much on relationships and credibility as it is on code and capital.” 

For Qaragholi, designing around fragmented infrastructure also means rethinking how products are introduced to users in low-trust environments. “Customer education isn’t a hurdle; it’s part of the product,” he explained. “Simplicity, trust, and transparency are more powerful than any marketing campaign. If users don’t understand the fees, the flow, or the value, they won’t return—no matter how sophisticated your tech stack is.” 

Finally, for founders navigating fundraising in the region, Qaragholi emphasized the importance of alignment over capital. “Choose your investors and partners wisely,” he said. “Patience, resilience, and local insight matter far more than capital that comes without conviction or long-term perspective. Don’t compromise your long-term vision—or allow any prospective investor to undervalue your commitment and contribution.” 

Pictured in the lead image is InstaBank founder Hussain Qaragholi. Image courtesy InstaBank.