KARACHI: Systems Ltd said on Monday its subsidiary EP Systems Ltd that operates in the fintech segment has secured $11 million in a funding round led by Sarmayacar and Shorooq Partners, a leading Abu Dhabi-based venture capital firm.

EP Systems runs OneLoad, an online platform that enables micro-retailers to connect with suppliers, leverage working capital options and accept digital payments. It’ll use the raised capital to launch multiple new products and expand services in the unbanked Pakistani market, the parent company said in a regulatory filing.

Speaking to Dawn, OneLoad CEO Muhammad Yar Hiraj said the startup has so far raised a total of roughly $18m in funding.

Last year, OneLoad secured capital from the Bill & Melinda Gates Foundation. In early 2020, International Finance Corporation (IFC) of the World Bank invested in the startup, which lets its users buy prepaid vouchers for all mobile companies and pay utility bills.

“Our seed funding came from Systems Ltd and IFC. The latest round falls somewhere between pre-Series A and Series A. It’s basically our first financing round after the sale of ordinary shares to IFC in 2020,” Mr Hiraj said in a phone interview on Monday.

The company reached breakeven in 2020, he said. But the startup is “marginally in cash burn” now as it’s investing heavily to strengthen itself as an electronic money institution or EMI, a non-banking entity that offers interoperable and secure digital payment products to end-users.

“The business model has been proven,” said Mr Hiraj.

The strategic collaboration with regulated financial partners and banks has led to daily disbursements worth Rs10 million-plus, which created horizons of accelerated growth for numerous micro-retailers across the country, according to the statement issued by Systems Ltd.

According to Bloomberg News, OneLoad’s android application, used mainly by small shopkeepers, is the largest non-banking digital transaction platform in Pakistan and serves several million customers each month. The platform operates through its 40,000 agents and did about $100m in transactions last year, the news service said. It wants to increase the number of daily transactions to 1m a day from the current level of up to 400,000, it added.

The World Bank estimates that about 110m Pakistani adults remain unbanked, which means the country has the third-largest concentration of unbanked population in the world.

Startups in Pakistan raised a total of $103.8m in 22 deals in the April-June quarter, down almost 40 per cent from the preceding quarter when the flows amounted to $173m.

The annual flow of funding into the country’s startup ecosystem clocked in at $350m in 2021.

Published in Dawn, August 2nd, 2022