KASB Securities, based in Karachi, has raised $4.5 million in a funding round led by Hong Kong-based investment firm TTB Partners and New York-based global venture capital firm HOF Capital. Additionally, Christian Angermayer, a fintech investor, and David Mortlock, managing partner of German investment bank Berenberg, as well as Pakistani business families, participated in the round.
KASB is one of Pakistan’s oldest brokerage firms, having been relaunched in 2018 by investment executive Ali Farid with an emphasis on retail investing. KTrade, a stock trading app for retail investors, was introduced by the firm in 2019 and has since served thousands of users in Pakistan. Users can create a brokerage account and begin trading with as little as PKR 5,000 ($32). KTrade charges PKR 0.03 on trades of stocks priced at or less than PKR 20 and 0.15 percent on trades of stocks priced at or more than PKR 20. According to the firm’s website, this is the industry’s lowest commision rate.
Since the app’s introduction, over 200,000 users have registered for access to research and virtual trading – thousands of these users have used the app to trade stocks, KASB Chairman Ali Farid told that the app now accounts for more than 50% of the brokerage’s trading volume. Additionally, KASB provides services to corporate and individual clients via a range of additional tools.
Securities and Exchange Commission of Pakistan, Pakistan’s financial regulatory body, approved online signup/onboarding for brokerage accounts in late 2020, making trading relatively simple. However, the KYC criteria continue to include payslips and bank account statements, which implies that a huge proportion of Pakistanis are unable to open brokerage accounts.
KASB’s Chairman, who previously served as Chief Financial Officer of UK fintech SafeCharge, remains optimistic about the country’s retail investing future, with the goal of reaching 10 million Pakistanis (local and international) by 2023 via KTrade, enabling them to invest in stocks, bonds, commodities, and mutual funds.
He stated in a statement, “Historically, when Pakistanis consider investment options, they turn to gold or real estate.” However, as the Karachi Stock Exchange’s regulatory approach, authority, and credibility have developed, more people are becoming comfortable with stock market investing. This is an encouraging trend, yet millions of people remain unable to access these markets. KTrade will make investing opportunities available to this mobile-first populace. By connecting these individuals to businesses, we can reintroduce cash imprisoned in unproductive assets to the formal sector, so initiating a positive cycle of economic development and increased investment.”
“The majority of people in Pakistan lack access to formal financial products, and their investments in real estate or gold provide substandard returns, are inefficient, and incur high transaction costs. We seek to democratise access to capital markets and empower anyone to invest in the stock market. The high demand for KTrade demonstrates that the market is prepared for this change. Other regional and emerging economies have followed a similar path, aided by successful fintech companies,” the KASB Chairman added.
Stock trading applications such as Robinhood, Zerodha, and Flatex have made retail investing more accessible and convenient for investors in nations such as the United States, India, and Germany. KASB intends to repeat its success in Pakistan with KTrade.
“Pakistan and South Asia have some of the most exciting market dynamics and demographics in the world, and KTrade is well-positioned to benefit from the region’s financial democratisation,” said Jonathan Bond, Managing Partner at TTB Partners. We are thrilled to be investing in KASB’s new round of investment and to continue to support Ali and his outstanding team on their journey.
“We have been blown away by what KASB has accomplished over the last few years, both technologically and in terms of the educational overlay on investing that the company has embraced. We feel, in particular, that the company has a great answer for boosting stock market participation across Pakistan in KTrade,” he added.