In a seed round led by London-based investment company Zayn Capital Frontier, global fund manager MSA Novo and Silicon’s Valley Graph Ventures, Pakistan-based fintech startup NayaPay secured $13 million. The round which is South Asia’s biggest seed funding round will see NayaPay rollout its multi-service messaging and payment app as well as build payment acceptance and financial management tools for businesses in Pakistan. Tag, a banking and financial service platform, previously held the record of the largest seed funding round in South Asia after raising $12 million last year.
Other investors that participated in the round include Saison Capital, Maple Leaf Capital and CEO Empower Finance and sponsors of the Lakson Group – a Pakistani conglomerate.
NayaPay was founded by Danish Lakhani who grew up in Pakistan. He is a graduate of Applied Mathematics from Brown University in the US, electrical engineering from Standford University and holds an MBA from the Harvard Business School. The idea for NayaPay came during the CEO’s visits to China, a country known for its social messaging and payment apps such as AliPay and WeChat. At that time, he was leading Cybernet which he built after his return from the US. Cybernet is currently Pakistan’s largest internet and data communication network service provider. Danish Lakhani fell in love with how these Chinese ‘super” apps operated and decided to replicate their model with NayaPay in Pakistan. He says NayaPay will revolutionize the payments space in the country largely known to be cash-dependent.
According to him, NayaPay allows people living in Pakistan to send and receive money, make payments, etc., all from the convenience of their smartphones. The startup already has acquired necessary authorizations including the e-money institution license issued by the State Bank of Pakistan. NayaPay also offers virtual and physical cards which can be used to make online and POS transactions, etc.
NayaPay, according to its CEO, aims at banking millions of people that remain largely unbanked in the country. According to the World Bank, about 100 million people remain unbanked in Pakistan and a huge majority is made up of women and youths. “Students and freelancers are among the most underbanked population, and they are our first target market. They find it very difficult to open bank accounts because they don’t have a sense of income. Bank compliance departments consider them very high risk, but we see them as a group with the highest lifetime value”.
NayaPay plans to grow its user base to 5 million over the next five years as well as increase the number of digital payments it handles – it wants more people to use its NayaPay wallet to make online transactions. The startup also has plans of introducing other financial services such as lending and investment in the future.
Speaking on the round, co-founder and managing partner of Zayn Capital Frontier, Faisal Aflab, said that “We are very bullish on fintech in Pakistan. While just beginning to emerge, Pakistani fintechs have the advantage of learning from peers and placing better informed strategic bets. We were impressed by the completeness of the vision of the founding team at NayaPay, and their differentiated platform-based strategy– first focused on servicing the needs of underbanked consumers and SMBs with specific use cases and building out from there. With a proven ability to execute on the ground, the founder has an impressive track record of building and scaling businesses in Pakistan, including the country’s largest fibre broadband service (StormFiber a subsidiary of Cybernet)”.