Abhi Issues First Sukuk Bond for a Fintech in MENAP
The Karachi-based startup raised 2 billion rupees ($6.8 million), an industry first for the Middle East, Africa and Pakistan region, said Omair Ansari, chief executive officer and co-founder. Demand exceeded expectations with subscriptions reaching twice the anticipated amount, he said in an interview.
Pakistan’s startups are experiencing a funding crunch in an economy that is going through one of its biggest downturns. In the past year, Vitol-backed VavaCars and trucking startup Trella have exited Pakistan, Dubai-based Swvl Holdings paused daily rides and Uber’s Careem suspended food delivery.
Abhi provides working capital to companies and early access to salary for employees registered on its platform. It raised funds at a $90 million valuation within a year of launching last year and entered United Arab Emirates in December. It is also in the process of buying a stake in a Pakistani courier company Universal Network Systems Ltd.
Pakistan is seeing record rate of inflation that’s the highest in Asia as it struggles to revive a loan program with the International Monetary Fund that is critical to avoid a default. Amid that pressure, people are accessing salaries from the fintech’s platform much more than before, said Ansari. Companies are also increasingly accessing funds for working capital.
“With this new funding, we can help ease the financial burden on struggling companies,” Ansari said. “The market is still so deep in Pakistan as banks have stepped away when it comes to lending to the real economy. We believe this is the environment for us to really grow.”
Ansari previously oversaw two funds at Morgan Stanley, and was looking at investment opportunities in consumer companies and fintech in emerging and frontier markets. He helped with early-stage investments in fintech companies from China to Brazil. He was also an adviser to VEF, which focuses on fintech in frontier and emerging markets.