NayaPay, a Pakistan-based fintech platform, has raised $13 million in a seed round to support the launch of its multi-service messaging and payment app, as well as the development of payment acceptance and financial management solutions for businesses in the South Asian country. According to Danish Lakhani, CEO, and founder of NayaPay, the super-app allows Pakistanis to send and receive money, split bills, and make payments from their cellphones. They’ve also created virtual and actual Visa cards that are linked to the NayaPay wallet, allowing individuals to make POS payments and businesses to accept payments even more easily.
NayaPay, according to Lakhani, is at the forefront of a digital payment revolution in Pakistan, a cash-heavy nation where only 1% of $4 trillion in payments are made electronically. This is a country with a population of 220 million people. But NayaPay’s ambition is much greater: to bank millions of adults who are now unbanked, with women bearing the brunt of the burden – only one in every three women has a bank account. Traditional banks in Pakistan have mostly excluded Pakistan’s youth and freelance populations. According to this World Bank research, around 100 million individuals in Pakistan are unbanked. “Students and freelancers are among the most financially disadvantaged people, and they are our first target market.” Because they do not have a source of income, it is extremely difficult for them to create bank accounts.
They are considered very high risk by bank compliance departments, but we regard them as a group with the highest lifetime value,” said Lakhani. Zayn Capital led the round, which included MSA Novo, a London-based investment firm, Graph Ventures, and an early-stage VC from Silicon Valley. Saison Capital, Waleed Saigol’s Maple Leaf Capital, and Warren Hogarth, CEO Empower Finance, as well as Lakson Group sponsors, were all present (a Pakistani conglomerate). The seed round is the highest in the South Asian industry, surpassing the $12 million raised by Tag, a banking and financial services platform, last year.
“In Pakistan, we are highly positive about fintech. Pakistani fintechs have the advantage of learning from their peers and making better strategic bets because they are still in the early stages of development. “We were impressed by the founders’ complete vision and their differentiated platform-based strategy, which first focused on serving the needs of underbanked consumers and SMBs with specific use cases and then expanded from there,” said Faisal Aftab, co-founder and managing partner of Zayn Capital Fronteir.
“The founder has a remarkable track record of creating and scaling businesses in Pakistan, including the country’s largest fiber internet service (StormFiber, a subsidiary of Cybernet),” Aftab said. During Lakhani’s visits to China, where social messaging and payment apps like WeChat Pay and AliPay are widely used, the concept for NayaPay arose. He was the CEO of Cybernet at the time, a broadband firm he helped start from the ground up and has grown to be the largest internet and data communication network service provider in the world.
He claims that the simplicity of use of Chinese super apps prompted him to mimic the paradigm with NayaPay, which he claims will transform Pakistan’s payments sector. After completing his undergraduate and graduate studies in the United States, where he earned a bachelor’s degree in applied mathematics – computer science from Brown University, a master’s degree in electrical engineering from Stanford University, and an MBA from Harvard Business School, Lakhani returned to Pakistan to build Cybernet.
NayaPay already possesses all of the necessary licenses, including the State Bank of Pakistan’s E-Money Institution license. It aims to reach 5 million users and increase the number of digital payments in the next five years, which he claims will have an impact on other sectors such as e-commerce as more people use the NayaPay wallet to conduct online transactions.
“Online shopping accounts for barely 2% of retail in Pakistan but is expanding at a 51 percent compound annual growth rate, indicating a large demand that has been boosted by COVID.” Restaurants, for example, that used to rely solely on a POS terminal for payment acceptance are now required to employ a payment gateway for their online sales,” he explained. They also intend to launch more digital financial services in the future, such as lending and investing. “We’ll expand this platform to allow them to invest in money market funds, stock trading, and other digital assets,” says the company.
