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Sequoia enters Pakistan’s startup ecosystem by investing in fintech.

Dbank, a Pakistani fintech company, completed the country’s largest early-stage fundraising round, which also marked the entry of venture capital firm Sequoia Capital into the country’s startup economy.

Sequoia Capital Southeast Asia and Kleiner Perkins co-led a $17.6 million seed round for Dbank. Nubank, RTP Global, Rayn, and local partner Askari Bank Ltd. were among those who took part.

Pakistan, the world’s fifth-most populous country, made headlines last year when it received $350 million in startup funding. The South Asian country’s startup economy is in its early stages.

sequoia-enters-pakistan-s-startup-economy-by-backing-fintech

Despite this, the country is feeling the effects of the global downturn, with Uber Technologies Inc.’s Careem Inc. suspending food deliveries and Airlift Technologies Pvt. shutting down after raising the country’s largest-ever round last year.

Tania Aidrus and Khurram Jamali, two former Google employees who have worked together for over a decade, founded Dbank. With the goal of operating in the Pan-Islamic world, the company has applied to become a digital retail bank in Pakistan.

According to Mamoon Hamid, a partner at Kleiner Perkins, Pakistan has enormous potential as an emerging market. According to the World Bank, Dbank is targeting the country’s 110 million adults who do not have access to banking services, making it the third-largest unbanked nation after India and China.

“Pakistan has a rapidly growing middle class with increasingly sophisticated banking needs,” said Sequoia Southeast Asia vice president Johan Surani. “This represents a once-in-a-lifetime opportunity to build a large, customer-centric bank for millions of people.”

Dbank, a Pakistani fintech company, completed the country’s largest early-stage fundraising round, which also marked the entry of venture capital firm Sequoia Capital into the country’s startup economy.

Sequoia Capital Southeast Asia and Kleiner Perkins co-led a $17.6 million seed round for Dbank. Nubank, RTP Global, Rayn, and local partner Askari Bank Ltd. were among those who took part.

Pakistan, the world’s fifth-most populous country, made headlines last year when it received $350 million in startup funding. The South Asian country’s startup economy is in its early stages.

Despite this, the country is feeling the effects of the global downturn, with Uber Technologies Inc.’s Careem Inc. suspending food deliveries and Airlift Technologies Pvt. shutting down after raising the country’s largest-ever round last year.

Tania Aidrus and Khurram Jamali, two former Google employees who have worked together for over a decade, founded Dbank. With the goal of operating in the Pan-Islamic world, the company has applied to become a digital retail bank in Pakistan.

According to Mamoon Hamid, a partner at Kleiner Perkins, Pakistan has enormous potential as an emerging market. According to the World Bank, Dbank is targeting the country’s 110 million adults who do not have access to banking services, making it the third-largest unbanked nation after India and China.

Sequoia Capital, the world’s most influential venture capital firm, has made its first investment in Pakistan, joining a growing list of high-profile investors who have backed young companies in the South Asian market in the last year.

Dbank, based in Islamabad, announced on Thursday that it had raised $17.6 million in a seed round, the largest in Pakistan, co-led by Sequoia Capital Southeast Asia, a recently launched $1 billion fund, and Kleiner Perkins. According to the Pakistani startup, Brazilian neobank Nubank, Askari Bank, and Rayn also participated in the round.

Dbank is a fintech startup that will try to expand the reach of financial services in Pakistan in a “transparent and friendly” manner, taking on the informal credit system that exploits those in need with exorbitant and unpredictable interest rates, according to Tania Aidrus, co-founder of Dbank, in an interview with TechCrunch.

According to Johan Surani, VP at Sequoia Southeast Asia, Dbank will attempt to “democratise banking,” but the startup wishes to keep its roadmap under wraps for the time being, according to Aidrus.

Currently, nearly half of Pakistan’s population of over 220 million people does not have a bank account. “We want our users to be in control of their money and make informed decisions,” Aidrus explained.

She co-founded Dbank with Khurram Jamali, both of whom previously worked at Google on payments rails for the company’s Next Billion Users initiative, where they studied the challenges that the unbanked population faces. Aidrus then briefly worked for the Pakistani government as Chief Digital Officer.

The State Bank of Pakistan, the country’s central bank, has aggressively explored opportunities to modernise the country’s payments infrastructure in recent years in order to increase financial inclusion in the country. Raast, a real-time payments system for instant digital transactions, has been developed, as has NADRA, a digital identity platform.

The central bank has also issued a new full banking digital licence, allowing more players to act as banks and accept deposits from customers without the need for physical locations. Dbank has applied to become Pakistan’s first digital retail bank.

“The key building blocks for launching a venture like Dbank are now in place – Raast, the real-time payment system by State Bank of Pakistan, supported by seamless digital identity through NADRA.” “We have seen the multiplier effect that digital public infrastructure can have on the private sector’s ability to assist in the transition of economies from cash to digital,” Jamali said in a statement.

According to Aidrus, Dbank intends to build a customer-centric digital bank in the Pan-Islamic world, beginning with Pakistan.

In the last two years, a slew of investors, including Tiger Global, Addition, and Prosus Ventures, have backed Pakistani startups, bolstering the local ecosystem. The global market downturn is putting pressure on the country as well. Airlift, one of Pakistan’s most celebrated startups, recently announced its closure due to a funding shortage.

“Pakistan, the world’s fifth most populous country, has a rapidly expanding middle class with increasingly sophisticated banking requirements.” This represents a once-in-a-lifetime opportunity to build a large, customer-focused bank for millions of people. Dbank is addressing this by taking a digital-native approach to democratise banking and make a wide range of financial services friendly, transparent, and thus accessible to the entire country. “The team behind this is a unique combination of talented people, and Sequoia Capital Southeast Asia is truly delighted to be able to be early partners with them,” Surani added in the statement.

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