Abhi, a Karachi-based firm that offers salary advances based on collected wages, has secured $2 million in its seed round.
Village Global, i2i Ventures, and Zayn Capital were among the foreign and local investors in the round, which was led by VEF, an emerging market fintech investor, and Sarmayacar, the local lead. According to a news release published by Abhi, this is Village Global’s first FinTech investment in Pakistan.
Many employees in Pakistan live paycheck to paycheck, and at the end of the month, they have spent all of their wages on bills, household expenses, and unexpected expenses. Abhi, which was co-founded by Omair Ansari and Ali Ladhubhai, aims to change the way individuals spend money by becoming Pakistan’s first and largest financial wellness platform.
“We believe financial wellness and access to credit are essential human rights, which we strive to offer to all of our customers,” said co-founder Ansari, who previously advised and invested in fintech solutions in emerging and frontier countries. Our mission is to digitise consumer credit, eliminate pain points in the manual payment process, and be available when customers need us the most. Your right to a wage is your right, and we want you to have it abhi (now now).”
“Abhi signed MOUs with 20 organisations before becoming public, and is currently running a three-month pilot programme with them,” the statement states, adding that the exercise was aimed at learning about employees’ pain points, their lending needs, and the conditions that prompted those needs.
Furthermore, the experiment will demonstrate to employers that Abhi does not affect cash flow or business processes, and that it does not cost HR or Accounts anything. Instead, businesses profit from a more engaged staff, which results in greater productivity, happiness, and retention.
“The organisations participating in the pilot come from a variety of industries, including insurance, steel manufacturing, pharmaceuticals, textiles, and retail, allowing Abhi to both validate the product and gather data for future growth metrics.”
“We are very delighted to join with Omair, Ali, and the Abhi Team,” said VEF Partner Dave Nangle. VEF will be able to continue its aim of enhancing the financial well-being of the common Pakistani thanks to this investment.”
“Less than 2 million people in Pakistan have access to formal credit,” said co-founder Ali Ladhubhai, who previously created Pakistani fintech company KarloCompare and oversaw business development at Foree. We noticed a need for an early wage access solution that would allow them to access alternative digital finance, as well as a knowledge centre to teach people how to manage their personal finances responsibly and to their advantage.”
“This is just the beginning for us,” Ladhubhai said, looking ahead to future advancements. We intend to offer a variety of digital financial services so that users may conduct all of their financial activities through a single app.”
“The annual salaries of the urban employed labour force across 100,000 public and private companies in Pakistan are estimated to be over $65 billion, yet official reports suggest that formal lending channels account for just over $3 billion, with millions of Pakistanis accessing informal channels at egregious rates,” said Sarmayacar’s General Partner, Dr. Bernhard Klemen.
Sarmayacar “believes in Abhi’s vision and is excited to support Omair and Ali in transforming how Pakistanis access loans and establishing the region’s best finance wellness platform over time,” according to a statement.
“We are happy to help Omair and Ali as they create a pioneering business in Pakistan,” said Misbah Naqvi, co-founder and General Partner of i2i Ventures.
“We believe the Abhi team has the proper experience and is well-positioned to utilise this market opportunity to establish Pakistan’s first financial wellness platform and extend financial access in one of the world’s largest underserved markets,” she added.
According to the statement, only over 20% of Pakistanis have bank accounts, according to the State Bank of Pakistan. “This effectively excludes about 80% of the population from having access to a transaction account. Bridging this gap is a first step toward financial inclusion, and more firms in Pakistan are recognising this and creating digital wallets and more accessible transaction models.”
“Financial inclusion has a lot of room for growth in Pakistan,” says Ben Casnocha, co-founder and partner of Village Global. “Many people are unable to access basic banking services due to their lack of financial stability.” As a result, we believe Pakistan’s market is ripe for disruption, and Abhi’s approach is the most effective method to achieve so. We’re looking forward to joining them on this adventure.”
“Team Abhi is getting ready to join Y-Summer Combinator’s cycle, an American seed investment accelerator that strives to provide businesses with the skills and knowledge they need to help their ideas flourish. They join alumni companies such as Airbnb, Dropbox, Reddit, and Coinbase, to mention a few,” the spokesman said.