NayaPay Secures $13M, South Asia’s Largest Seed Funding for Its Messaging and Payments App – TechCrunch
Fintech platform based in Pakistan, NayaPayraised $13 million in a seed round to roll out its multi-service messaging and payment app, and to build payment acceptance and financial management tools for businesses in the South Asian country.
CEO and Founder of NayaPay Danish Lakhani told TechCrunch that the super app allows people residing in Pakistan to send and receive money, split bills and make payments easily from smartphones. They have also issued virtual and physical Visa cards linked to the NayaPay wallet further allowing its users to make point-of-sale payments and businesses to accept payments.
Lakhani said NayaPay is leading a digital payments revolution in Pakistan, a cash-intensive economy, where only 1% of $4 trillion in payments are made electronically. This is in a country of 220 million people. But NayaPay’s goal is even bigger; to bank millions of adults who remain unbanked, with women being the most affected – only one in three women have a bank account. The youth and self-employed communities in Pakistan are also mostly blocked by traditional banks. About 100 million people are unbanked in Pakistan, according to this World Bank report.
“Students and the self-employed are among the most underbanked population, and they are our primary target market. They find it very difficult to open bank accounts because they have no idea of the income. Bank compliance departments consider them very high risk, but we consider them a group with the highest lifetime value,” Lakhani said.
The round was led by Zayn Capital; London-based investment firm, MSA Novo; global fund manager and Graph Ventures; a Silicon Valley startup VC. It included participation from Singapore-based Saison Capital, Waleed Saigol’s Maple Leaf Capital and Warren Hogarth; CEO Empower Finance and sponsors of Lakson Group – a Pakistani conglomerate. The seed round is the largest seed funding round in the South Asian market, surpassing Tag, a banking and financial services platform that raised $12 million last year.
“We are very bullish on fintech in Pakistan. Just beginning to emerge, Pakistani fintechs have the advantage of learning from their peers and making better-informed strategic bets. We were impressed with the comprehensiveness of NayaPay’s founding team’s vision and strategy based on a differentiated platform – first focused on serving the needs of underbanked consumers and SMBs with cases specific uses and based on that,” said Zayn Capital Fronteir. , co-founder and managing partner, Faisal Aftab.
“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 fiber-based broadband service (StormFiber, a subsidiary of Cybernet),” Aftab said.
The idea to launch NayaPay came about during Lakhani’s visits to China, where social messaging and payment apps like WeChat Pay and AliPay are commonly used. At the time, he ran Cybernet, a broadband company he helped create from scratch that became the world’s largest Internet service and data communications network provider.
He says he was inspired by the ease of use of Chinese super apps and decided to replicate the model with NayaPay, which he says will revolutionize the payments landscape in Pakistan.
Lakhani, who grew up in Pakistan, returned to build Cybernet after his undergraduate and graduate studies in the United States, where he earned a degree in applied mathematics at Brown University, a graduate degree in electrical engineering from Stanford University and an MBA from Harvard Business School.
NayaPay has already acquired the required permissions, including the E-Money Institution license from the State Bank of Pakistan.
He aims to have 5 million users over the next five years and increase the number of digital payments, which he says will impact other sectors like e-commerce as more and more people use the NayaPay wallet to transact online.
“Online shopping only accounts for 2% of retail in Pakistan and is growing at a CAGR of 15%, so there is massive demand which has accelerated due to COVID. point-of-sale terminal for acceptance, now require a payment gateway for their online sales,” he said.
They also plan to introduce other digital financial services like loans and investments in the future.
“We will develop this platform to give them the ability to invest in money market funds, trade stocks and buy other digital assets.”