After acquiring Tez Financial Services in Karachi, ZoodPay, a digital financing platform for e-commerce in the Middle East and Central Asia, has entered Pakistan.
Tez was the first fintech in Pakistan to be granted a Non-Bank Financial Company (NBFC) license in 2018, thanks to investors such as Planet N, Flourish Ventures (Omidyar Network), and Accion. In over 160 cities across Pakistan, it offers nano-loans to the unbanked and underbanked.
ZoodPay is positioning itself as a vital new participant in Pakistan’s digital lending and fintech industries as a result of this purchase. “Given the number of people seeking credit facilities, Pakistan is a market brimming with potential,” said Michael Khoi, CEO of ZoodPay. “We’re confident that by combining ZoodPay’s unique ecosystem and experience operating in frontier markets with Tez’s local know-how, strong team, and ecosystem partnerships, we’ll be able to positively impact Pakistani people’s lives and empower them by providing them with easy, affordable, and reliable digital financial services,” says the company.
Traditional players have been unable to assess risk in the absence of credit histories and credible data, inhibiting their interest in serving the masses – as a result, less than 5% of Pakistanis have access to formal credit. Tez co-founders Naureen Hyat and Humza Hussain stated that they founded Tez with the goal of making access to money as simple as using a mobile phone.
“We are humbled and delighted by the confidence shown in our business model by larger regional players,” they said. “We look forward to the next stage of Tez’s development, where our learnings in crafting the digital lending journey and managing risk can serve as a foundation for delivering consumer-centric lending solutions at scale while creating credit histories for the masses.”
ZoodPay has raised $50 million to date, including involvement from significant global and strategic investors such as Zain, the leading MENA-based telecom entity, and Sturgeon Capital, a London-based venture capital firm. The firm has announced the launch of its Series C financing, with profits going toward ZoodPay’s growth in Pakistan. “With a population of over 230 million people, half of whom are young and digitally savvy, over 100 million smartphones, and 90% internet coverage, Pakistan represents a clear high-potential market with a dire need for formal credit,” according to the company’s news release.
“The Pakistani startup ecosystem has reached a tipping point,” stated Tez Chairman Nadeem Hussain. “In addition to large fundraising efforts, international players are beginning to acquire local players. This adds to the worldwide value that Pakistani startups are generating. Planet N was one of the earliest investors in companies on the market. The first-mover advantage is clearly evident.”