A group of Pakistani entrepreneurs started analyzing the market two years ago to figure out why FinTech services were not reaching the majority of merchants in the world’s fifth most populous country.
Tiger Global announced on Friday that it is investing in their business, CreditBook, to assist them address these issues. This is the firm’s first investment in FinTech industry of Pakistan. It is based in New York.
Other investors in the $11 million pre-Series A round included Better Tomorrow Ventures, Firstminute Capital, Banana Capital, VentureSouq, Ratio Ventures, and i2i Ventures, as well as angel investors Sriram Krishnan and Julian Shapiro. Firstminute Capital is also making its first investment in the South Asian sector.
“We started the research and began experimentations in late 2019,” said Iman Jamall, co-founder of CreditBook, in an interview. “I was working as a service designer on a project for one of the largest Pakistani banks at the time and was observing different persona types to understand why financial inclusion is low at the level that it was at the time.”
The challenges that Jamall, one of the few female founders in the country, identified were cash flow, the role of credit and the social relationships around it, and the over reliance on “paper for everything essentially,” she said.
Merchants in several South Asian and Southeast Asian markets have the problem of an over-reliance on paper to keep track of their ledgers and an always-running low cash flow.
As we previously discussed, many small firms operate on ad hoc credit, relying on funds raised from the sale of existing inventory to fund the purchase of new inventory. Customers will spend weeks, if not months, on purchases before paying off their balance.
These flaws are affecting small businesses and mom-and-pop shops, preventing them from growing at a time when major e-commerce behemoths are courting customers.
Merchants can now utilize CreditBook’s bookkeeping app to digitize their handwritten ledgers and keep track of their daily finances.
To read our blog on PostEx a Pakistani FinTech and Logistics firm has raised $8.6 million in a seed round, click here.
