Pakistan’s SadaPay raised additional funds to become the nation’s highest-funded fintech as it received permission for full-fledged operations that will allow it to add millions of new users.
The Islamabad-based startup scored $10.7 million in a seed-extension round, according to Chief Executive Officer Brandon Timinsky. The funding announcement comes a day after the central bank allowed it to offer financial services through its smartphone app.
The South Asian nation is seeing a rush of investors eager to back startups in the world’s fifth largest nation, one of the last large untapped markets. A flurry of fintechs are emerging in Pakistan, which has the world’s third-largest unbanked population, according to the World Bank.
The opportunity lay in “a huge population of young people with smartphones, high cellular-broadband penetration, sleepy incumbent banks and massive policy reform by the government to support digitization,” Timinsky said of when he first visited Pakistan.
Timinsky, 31, an American entrepreneur, came to Asia to explore new opportunities after a previous startup was acquired in the U.S.. The fintech started operating last year in pilot mode, which restricted users to 10,000, before it got the Electronic Money Institution license from the State Bank of Pakistan on Monday.
Unlike conventional banks, Sadapay allows customers three free cash withdrawals in a month, offers round-the-clock in-app chat support and opens an account in two minutes.
While Pakistan has seen an increase in digital payments during the pandemic, only 1% of almost $4 trillion of payments are made digitally. SadaPay is projected to be the fastest-growing mobile wallet in the world in the five years to 2025, research from London-based fintech company Boku Inc. mentioned last year. A unit of Uber’s Careem Inc. has also decided to invest $50 million in the country and acquire a similar license.
SadaPay’s prior backers Recharge Capital, Kingsway Capitaunitl, and Raptor Group added to their investment. The startup plans to more than double its employee headcount to over 250 people by the end of the year.