Abhi, a Karachi-based pay advance platform, announced today that it has raised $2 million in a seed round sponsored by Vostok Emerging Finance. Village Global, Sarmayacar, i2i Ventures, Zayn Capital, and Portman Wills, co-founder and CTO of Wagestream, a UK-based financial wellness platform for corporate employees, also participated in the equity-only round. Additionally, the firm has been accepted into the upcoming batch of Y Combaintor, according to a release. It is the second Pakistani fintech to get approved into the next round of YC.
Abhi, founded earlier this year by Omair Ansari and Ali Ladhubhai, would enable employees of its partners to access their collected salaries at any time via the company’s website or mobile app. Shariah-compliant solutions will charge employees a nominal transaction fee and will be entirely free to employers. Additionally, it will have no effect on employers’ balance sheets, as advances will be funded by Abhi. The repayments and fee will be collected automatically from an employee’s monthly income (if they have taken an advance) before the business pays it.
Abhi intends to assist blue-collar workers in addition to corporate personnel and the business hopes to expand its services to markets in the GCC, Africa, and South Asia by 2023. He previously led investments in emerging market fintech businesses and worked as a Portfolio Manager at Morgan Stanley prior to founding Abhi. From 2018 until 2020, Omair also acted as a Strategic Advisor to Vostok Emerging Finance, the investor who led the round.
He stated in a statement, “We believe financial wellness and credit access are fundamental human rights that we strive to provide to all of our customers.” Our mission is to automate consumer credit, eliminate friction points in the manual payment process, and be available to consumers when they need us most. Your salary is your right, and we want you to receive it immediately, Abhi (“immediately” in Urdu).”
“Less than 2 million people in Pakistan have access to formal credit,” Ali Ladhubhai, Abhi’s co-founder who previously established the financial comparison firm KarloCompare, explained. We identified a need for an early wage access product that would enable them to access alternative digital finance, as well as a knowledge centre that would educate them on how to manage their finances responsibly and to their advantage. For us, this is only the beginning. We intend to offer a suite of digital financial services that will enable users to manage all of their financial transactions through a single financial app.”
The Karachi-based fintech is currently conducting a three-month pilot with 20 companies across a variety of industries – including insurance, steel manufacturing, pharmaceuticals, textiles, and retail – to gain insight into employees’ pain points and lending needs, as well as to validate its product. It will launch an app later this year.
“We are extremely excited to partner with Omair, Ali, and the Abhi Team,” said Dave Nangle, a Partner at Vostok Emerging Finance. This funding enables VEF to continue our aim of enhancing the typical Pakistani’s financial well-being. For as long as we can recall, the traditional pay cycle has restricted employees’ earned income, pushing people to rely on overdraft, payday loans, and other punitive products.”
“We constantly hear businesses talk about ‘Digital Transformation’; modernising the pay cycle is the most fundamental change a business can make to its relationship with its employees. It’s a fantastic scale product that benefits everyone involved and serves as the foundation for a much larger employee financial wellness play,” he added.
Vostok Emerging Finance is also an investor in Finja, a Karachi-based fintech that provides small businesses and individuals with a variety of financial solutions, including salary advances.
Dr. Bernhard Klemen, General Partner at Sarmayacar, stated, “The annual salaries of the urban employed labour force in Pakistan are estimated to be over $65 billion, yet official reports indicate that formal lending channels account for just over $3 billion in credit, with millions of Pakistanis accessing informal channels at exorbitant rates.” Sarmayacar believes in Abhi’s vision and is glad to support Omair and Ali in their efforts to revolutionise Pakistanis’ access to credit and, in the process, establish the region’s premier finance wellness platform.”
Misbah Naqvi, co-founder and general partner of i2i Ventures, stated, “We are delighted to support Omair and Ali as they launch a ground-breaking business in Pakistan.” Fintech is an exciting space in Pakistan right now, and we believe that the Abhi team possesses the necessary experience and is well-positioned to capitalise on this market opportunity by developing Pakistan’s first financial wellness platform and expanding financial access in one of the world’s largest untapped markets.”
The firm intends to use the funding to continue developing its product, expand its personnel, and fund future opportunities. Abhi presently employs around ten people in Karachi and Lahore.