Pakistani salary advance startup Abhi has issued a Sukuk bond to raise funds — the first such move by a fintech in the Middle East, North Africa, Afghanistan, and Pakistan (MENAP) region.
Chief Executive Officer (CEO) and Co-Founder Omair Ansari said the platform raised Rs2 billion or $6.8 million in an industry first.
In an interview with Bloomberg, Ansari said demand exceeded expectations with subscriptions reaching twice the anticipated amount.
The Karachi-based startup which was founded in 2021 aims to enable employees of its partners to withdraw salary advances based on their accrued wages at any time. It also offers working capital to companies.
Abhi raised funds at a $90 million valuation within a year of its launch and entered the United Arab Emirates in December. The startup is currently in the process of buying a stake in courier company Universal Network Systems Ltd.
Pakistan’s startups have seen funding dry up this year amid one of the country’s worst economic crises. Several startups have closed in recent months, including Airlift and Vavacars, while others such as Maersk-backed Trella have announced their exit from the country.
The government has been scrambling to revive a stalled loan programme with the International Monetary Fund (IMF) for a desperately needed economic bailout, while its foreign exchange reserves plummet to a critical level.
Meanwhile, the country has the fastest inflation in South Asia, with people burdened especially with rising food and fuel costs. Amid the economic crisis, people are accessing salaries from Abhi’s platform much more than before while companies have also started accessing working capital more frequently, Ansari said.
“With this new funding, we can help ease the financial burden on struggling companies.
“The market is still so deep in Pakistan as banks have stepped away when it comes to lending to the real economy. We believe this is the environment for us to really grow,” the CEO said.