Sequoia backs fintech Dbank in maiden Pakistan investment
Sequoia, the world’s most influential venture fund, has made its maiden investment in Pakistan, joining a growing list of high profile investors who have backed young firms in the South Asian market in the past one year. Islamabad-headquartered startup Dbank said on Thursday it has raised $17.6 million in a seed round, the largest in […]
Sequoia, the world’s most influential venture fund, has made its maiden investment in Pakistan, joining a growing list of high profile investors who have backed young firms in the South Asian market in the past one year.
Islamabad-headquartered startup Dbank said on Thursday it has raised $17.6 million in a seed round, the largest in Pakistan, co-led by Sequoia Capital Southeast Asia, the recently unveiled $1 billion fund, and Kleiner Perkins. Brazil’s neobank Nubank, Askari Bank, Rayn also participated in the round, the Pakistani startup said.
Dbank is a fintech startup that will attempt to expand the reach of financial services in a “transparent and friendly” manner in Pakistan, taking on the informal credit system that tends to exploit those in need with exorbitant and unpredictable interest rates, said Tania Aidrus, co-founder of Dbank, in an interview with TechCrunch.
Johan Surani, VP at Sequoia Southeast Asia, said in a statement that Dbank will attempt to “democratize banking,” however the startup wishes to keep its roadmap under wraps for now, Aidrus said.
Nearly half of the population of Pakistan, home to over 220 million people, currently don’t have bank accounts. “We want our users to be in control of their money and to make informed choices,” said Aidrus.
She has started Dbank with Khurram Jamali, both of whom have studied the challenges the unbanked population faces closely at their previous stint at Google, where they worked on payments rails for the company’s Next Billion Users initiative. Aidrus then briefly joined the Government of Pakistan as Chief Digital Officer.
State Bank of Pakistan, the country’s central bank, has aggressively explored opportunities in recent years to modernize the nation’s payments infrastructure to increase financial inclusion in the country. The country has developed Raast, a real-time payments system, for instant digital transactions and also built NADRA, a digital identify platform.
The central bank has also introduced a new full banking digital license, allowing more players to serve as banks that can take deposits from customers without having to have physical centres. Dbank has applied to become a digital retail bank in Pakistan.
“The reason it is the perfect time to launch a venture like Dbank is that the key building blocks are now in place – Raast, the real-time payment system by State Bank of Pakistan supported by seamless digital identity through NADRA. We have seen the multiplier effect that digital public infrastructure can have on the private sectors’ ability to help move economies from cash to digital,” said Jamali in a statement.
Aidrus said Dbank plans to eventually build a customer-centric digital bank in the Pan-Islamic world beginning with Pakistan.
Scores of investors including Tiger Global, Addition and Prosus Ventures have backed Pakistani startups in the past two years in a boost to the local ecosystem. The nation, too, is feeling the pressure of the global market downturn. Airlift, one of Pakistan’s most celebrated startups, recently announced it was shutting down following funding crunch.
“Pakistan, the world’s fifth most populous nation, has a fast-growing middle class with increasingly sophisticated banking needs. This signals a unique opportunity to build a large, customer-centric bank for millions of people. Dbank is addressing this by taking a digital-native approach to democratize banking and make a broad set of financial services friendly, transparent and thus, accessible for the entire nation. The team behind this is a unique combination of talented people and Sequoia Capital Southeast Asia is truly delighted to have the opportunity to be early partners with them,” Sequoia Southeast Asia’s Surani added in the statement.