Abhi from Pakistan Raises $ 2 Million for Payroll Advance Platform, Joins Y Combinator
Abhi, the Karachi-based salary advance platform, has raised $ 2 million in a funding round led by Vostok Emerging Finance, it said in a statement today. The equity-only round of funding also included participation from Village Global, Sarmayacar, i2i Ventures, Zayn Capital and Portman Wills, the co-founder and CTO of Wagestream, a UK-based financial wellness platform for employees. companies. The startup has also been accepted to join the next batch of Y Combaintor, he said in a statement. This is the second Pakistani fintech to be accepted for the next batch of YC.
Founded by Omair Ansari and Ali Ladhubhai earlier this year, Abhi will allow employees of its partners to withdraw their accrued salaries at any time, through its web or mobile application. The Sharia-compliant solution will charge employees a minimal transaction fee and be completely free for employers. This will also have no impact on the employers’ balance sheet as the advances will be financed by Abhi. Reimbursements and fees will automatically be deducted from an employee’s monthly salary (if he has taken an advance) before it is paid by the employer.
In addition to the company’s employees, Abhi also plans to serve blue collar workers, said co-founder and CEO Omair Ansari. MENBytes, adding that the startup will look to expand its services to the GCC, Africa and South Asian markets by 2023. He previously led investments in fintech startups in emerging markets and worked as a manager of portfolio at Morgan Stanley before launching Abhi. Omair was also strategic advisor to Vostok Emerging Finance, the investor who led the round, from 2018 to 2020.
In a statement, he said: “We believe that financial well-being and access to credit are fundamental human rights, which we aim to provide to all of our clients. Our goal is to digitize consumer credit, solve problems with the manual payment process, and be there when consumers need us most. Your salary is your right, and we want you to have access to it Abhi (“right now” in Urdu). “
Ali Ladhubhai, co-founder of Abhi who previously founded a financial comparison startup KarloCompare, said: “Less than 2 million people in Pakistan have access to formal credit. We saw the need for an Early Access Salary product that could give them access to alternative digital finance as well as a knowledge center to educate them on the responsible use of personal finance and to their benefit. This is just the start for us. We plan to provide a range of digital financial services to enable clients to perform all financial transactions from a single financial application. “
The fintech, headquartered in Karachi, is currently running a three-month pilot project with 20 companies from different industries, including insurance, steelmaking, pharmaceuticals, textiles and retail, to secure information on employees’ weak points and their loan needs, and validate its product. . Its application will go live later this year.
Dave Nangle, Partner at Vostok Emerging Finance, said: “We are very happy to partner with Omair, Ali and the Abhi team. This investment allows VEF to continue its mission of improving the financial well-being of the average Pakistani. The traditional pay cycle has tied up earned income from employees for as long as we can remember, forcing workers to turn to overdrafts, payday loans, and other punitive products.
“We hear companies talking about ‘Digital Transformation’ all the time; Modernizing the payroll cycle is the most fundamental transformation a business can make to its relationship with its employees. It’s a large-scale product, a victory for everyone involved and the cornerstone of a much larger game on employee financial well-being, ”he added.
Interestingly, Vostok Emerging Finance is also an investor in Finja, a Karachi-based fintech that offers different types of lending solutions to small businesses and individuals, including payday advances.
Sarmayacar’s general partner, Dr Bernhard Klemen, said: “The annual wages of urban workers employed in 100,000 public and private enterprises in Pakistan are estimated at over $ 65 billion. billions alone, with millions of Pakistanis accessing informal channels at exorbitant rates. Sarmayacar believes in Abhi’s vision and is delighted to support Omair and Ali in transforming the way Pakistanis access credit and, over time, build the region’s leading financial well-being platform.
Misbah Naqvi, co-founder and sponsor of i2i Ventures, added: “Access to pay must be a right for all employees and we are delighted to support Omair and Ali in launching a pioneering business in Pakistan. FinTech is an exciting space in Pakistan right now and we believe the Abhi team has the right experience and is well positioned to take advantage of this market opportunity to build the premier financial wellbeing platform in the world. Pakistan and expand financial access to one of the world’s largest untapped markets. “
The startup plans to use the investment to continue to develop its product, expand the team, and fund breakthroughs. Abhi currently has a team of over 10 employees in Karachi and Lahore.