KARACHI: ZoodPay, a digital lending platform mainly operating in the Middle East and Central Asia, said on Monday it had fully acquired Karachi-based Tez Financial Services Ltd (Tez), a non-bank microfinance company co-founded by serial entrepreneur Nadeem Hussain.
Speaking to Dawn, Mr Hussain refused to share the transaction value, citing a non-disclosure agreement with the acquirer.
“Many Pakistani start-ups have had fundraising rounds. But this transaction has ushered in the age of 100 per cent acquisition of local players by foreign firms. It’s a hugely positive development for the start-up ecosystem,” he said.
Backed by Mr Hussain’s Planet N, venture capital firm Flourish (formerly Omidyar Network) and seed-stage investment firm Accion Venture Lab, Tez was the first fin-tech in Pakistan that received a non-bank financial company licence in 2018. Its mainstay is providing nano-loans to the unbanked and under-banked masses in 160-plus cities of Pakistan. Currently, less than 5pc individuals in Pakistan have access to formal credit.
According to Mr Hussain, the start-up makes instant loans to those who can’t borrow from banks owing to a lack of credit history. “TEZ develops alternate credit history for them. Using customers’ phone data to determine credit worthiness, we make loans of up to Rs5,000 within 10 minutes — something conventional banks take weeks or even a month to do,” he said.
With the latest transaction, Mr Hussain has become the only Pakistani entrepreneur with three “exits” under his belt. Previously, he founded, expanded and sold the now rechristened Telenor Microfinance Bank and digital pharmacy Dawaai. His firm Planet N has invested in more than two dozen start-ups. ZoodPay has raised $50 million to date from leading global investors. The company has launched its Series C round and will use part of the proceeds for its expansion in Pakistan.
A statement by ZoodPay said its lending strategy would be marked by the acquisition of consumers and merchants via its diverse distribution channels, including its own e-commerce marketplace and a network of retailers and partners.
Published in Dawn,May 24th, 2022