Pakistan has managed to attract a considerable amount of new capital to support its evolving Fintech sector and emerging startups. The significant increase in new funding actually began following the COVID-19 outbreak which led to many more consumers transacting online instead of visiting physical business locations.
Recently, Khadim Ali Shah Bukhari Securities Pvt.’s Fintech trading app KTrade and ex- Morgan Stanley asset manager Omair Ansari’s early wage access platform have managed to acquire $6.6 million in capital, which notably adds to the $19.3 million in funding for the nation’s high-potential startups during Q1 2021.
Of that amount, almost $15 million has been received from overseas investors, which channeled an all-time record $48 million into Pakistan‘s Fintech economy in 2020. This, according to a report from Bloomberg which referenced a note from Invest2Innovate, an initiative launched to support early-stage firms. The considerable decrease in international air travel during the pandemic has led to an unanticipated growth in Pakistan’s startup ecosystem. The country has been observing many travel advisories that it has issued against several other nations.
Ali Farid Khwaja, chairman at Karachi-based KASB Securities, told Bloomberg in an interview:
“Covid has helped us because previously an investors’ due diligence process would usually involve them coming to the country. It was not that easy for them to visit Pakistan. Now they can’t go to any country, they became open to speaking with founders over Zoom and other digital means.”
KTrade, which lets clients purchase and sell equities via the Pakistan Stock Exchange, secured $4.5 million through an investment that was led by Hong Kong’s TT Bond Partners and New York’s HOF Capital. This, according to an update from the firm. Germany-based investor Christian Angermayer also took part in the funding round.
Ansari has managed to acquire $2.1 million in seed funding for Abhi (literally means “now” in Urdu, one of the official languages of Pakistan), which somewhat like Payactiv Inc. and Wagestream Ltd., lets workers gain access to earned wages before they actually receive their payouts from employers. Investors in the round reportedly include VEF Ltd. and Village Global, Ansari revealed.
Talal Gondal, CEO at TAG Innovation Pvt., which has finalized one of the biggest pre-seed rounds in the region, added:
“There are always stages in an ecosystem. Pakistan’s fintech wave is just starting.”