Friday, May 28, 2021

Karachi Fintech Startup Raises $6.5 Million Seed Round To Launch Derivative Trading App

Seed Labs, a Pakistani financial technology startup based in Karachi, has raised $6.5 million in seed funding to launch a derivatives trading platform. It was founded about a year ago by four young men in their mid-20s: Yameen Malik, Rabeel Jawaid, Zabi Mohebzada, and Ahmad Jawaid, according to Bloomberg reporter Faseeh Mangi


Seed Labs Founders

Seed Labs's first app is designed for decentralized trading of derivatives on commodities, cryptocurrencies and stocks using blockchain technology. Seed Labs is backed by venture money from investors in 9 different countries, including institutional liquidity providers, Alameda Research, Kronos Research, LedgerPrime and others that collectively trade over $28 billions a day, the company said in a statement.

The initial platform planned to launched later this year will primarily be a Perpetual Swap Trading Exchange. It will allow any trade pair from any asset class to be offered — from commodities, equities, digital assets to pre-IPO stocks.  "Right now our target markets are Europe and the Asia Pacific Region. The derivatives exchange is expected to launch in Q3 of this year and is currently undergoing the first round of technical security and penetration testing audits”, Says Zabi, according to a report. 
Seed Labs Trading Platform 

Derivatives are contracts whose value derives from something else. They derive their value from price movements, events, or outcomes of an underlying asset. Underlying assets are usually securities like stocks, bonds, index funds, mutual funds, and commodities. Some derivatives track numerical indexes or statistics based on events and outcomes outside the financial realm — like the weather. Derivative financial products come in different forms and do different things. Some try to secure a future price of a commodity, such as wheat, to help limit the risk of future price increases. Others speculate on future stock price movements to seek a profit. Still, others swap currencies and interest rates to gain a comparative advantage. The important thing to remember about derivatives is that without underlying assets they can not exist.

Fintech trading platforms are beginning to make derivatives trading accessible to non-professional investors. Silicon Valley-based Robinhood is an example of such as platform that has been in the news recently. The role of Robinhood app in driving up games retailer GameStop stock price has drawn the scrutiny of regulators at both the SEC and CFTC. The fintech-based trading platforms are seen as a disruptive force by the fintech fans and critics alike. 



14 comments:

M. Khan said...

I wish Seed Labs to succeed in its endeavor to launch the derivatives trading platform. If the four young and bright brains mentioned above who conceived the idea could impress the investors from around the world to dish out that kind of venture money, their plan is definitely feasible and will surely succeed in achieving their planned goals In Sha Allah. Pray, their first app designed for decentralized trading of derivatives on commodities, cryptocurrencies, and stocks using blockchain technology, will get the desired results. Like it says in the above post, the same will be accessible and helpful to non-professional investors worldwide.

Mayraj F. said...

https://www.wired.com/story/meet-your-next-angel-investor-theyre-19/?utm_source=pocket-newtab
Meet Your Next Angel Investor. They're 19
It’s never been easier to invest in startups, and Gen Z is taking full advantage.

Riaz Haq said...

Is Robinhood safe? Experts weigh in on using the commission-free investing app


https://www.businessinsider.com/is-robinhood-safe


Robinhood, the app that lets users invest in stocks without paying fees, has earned both popularity and controversy.
Two financial advisors told Insider that while Robinhood is safe to use, the app's language and design can be misleading to users.
Always consult a personal financial advisor before investing to avoid unexpected financial risks or crises.
Visit Insider's Tech Reference section for more stories.

The
online brokerage
platform Robinhood launched nearly a decade ago but has gained popularity more recently. The app and web interface allow users to buy, sell, trade, and invest in stocks and other investments (like cryptocurrency) without paying commission fees.

According to Douglas Boneparth, certified financial planner and president of investment advising company Bone Fide Wealth, Robinhood is "geared toward the next generation of investors."

But that forward focus has led to the company being investigated for "gamifying" investing. The company is currently facing 50 active lawsuits and increased regulatory scrutiny, in part because it restricted trading during the GameStop stock saga in January.

Robinhood's rise has been rocky, leading many to wonder whether it's safe to use.

The short answer? "Trade at your own risk," Boneparth said.

Is Robinhood safe? Mostly
When setting up an account with Robinhood, users give their personal information, like their age, net worth, income, and social security number. According to Nickolas Sanchez, a certified financial planner at Financial Architects, this is an entirely normal process to trade stocks under SEC guidelines.

"This isn't a Robinhood-specific requirement," he said. "If you want to invest, even at the most reputable firms, you are going to have to give underlying personal information."

The Securities and Exchange Commission requires these details to avoid fraud and especially risky investments. And just like any other brokerage firm, Robinhood must abide by the fair practice regulations set by the SEC, including providing proof of fair dealings. Otherwise, they face being hit with fines or civil lawsuits.

Additionally, Robinhood is a member of the Securities Investor Protection Corporation, which offers financial protection if a brokerage firm were to fail. The SIPC can replace up to $500,000 for both securities and cash, including a $250,000 limit for cash only, in missing customer property.

So if Robinhood went bankrupt, as an investor on that brokerage platform, your funds could be transferred to another brokerage firm or refunded to you. However, investments in cryptocurrency are not protected by either the SIPC or Robinhood.

Finally, Robinhood ensures its users that their passwords and "sensitive details" are encrypted. Once you verify your banking information, Robinhood states it will "never access them again." The app also offers two-factor authentication via SMS text message and third-party authentication apps for additional security protection.

But of course, you should always take your data security into your own hands by using a strong password that you change regularly.

Riaz Haq said...

‘Robinhood of Pakistan’ banks $4.5m in round led by Hong Kong, US investors


https://www.techinasia.com/robinhood-pakistan-banks-45m-round-led-hong-kong-us-investors

Pakistani fintech startup KTrade said it has raised US$4.5 million in a funding round led by Hong Kong-based TTB Partners and HOF Capital from New York.

Fintech investor Christian Angermayer and David Mortlock, managing partner of German bank Berenberg, also particiapted in the round, along with leading Pakistani business families, according to a statement from KTrade.

Created by Pakistani brokerage major Khadim Ali Shah Bukhari Securities, KTrade is a stock trading app that provides easier access to financial markets for retail investors. The app works the same way as its global peers, which includes XP in Brazil, Zerodha and Groww in India, Tiger in China, Flatex in Germany, and Robinhood in the US.

KTrade said it has garnered over 200,000 users since launching in 2019, and it aims to reach 10 million Pakistanis by 2023.

“People in Pakistan have traditionally turned to gold or real estate when they consider investment options. However, as the regulatory approach, authority, and credibility of the Karachi Stock Exchange has grown, more people are getting comfortable with stock market investing,” said KTrade co-founder Ali Farid.

According to the statement, Pakistan’s Karachi Stock Exchange Index has rallied by 19% per annum over the past 20 years, with volumes increasing by 7x over the last 18 months due to regulatory reforms and increased participation among retail investors.

Prior to KTrade, Farid served as the chief financial officer of UK-listed fintech firm SafeCharge and a partner at Autonomous Research, a London-based firm focused stock market analysis.

Riaz Haq said...

Pakistani fintech startup that gives employee salary advances banks $2m


https://www.techinasia.com/pakistani-fintech-startup-employee-salary-raises-2m


Under Shariah or Islamic law, a loan that requires repayment with interest is forbidden because it’s considered exploitative. While most companies that operate in predominantly Muslim countries look to comply with these rules, financial inclusion in Pakistan stands at 14%.

But what if people could borrow money without taking out a loan?

A fintech startup is bringing in this facility to Pakistan – a country with more than 181 million mobile subscriptions – within a month. Abhi provides employees with salary advances based on accrued wages. The company’s name is derived from abhi, an Urdu word that means “right now.”

The company recently raised US$2 million in a seed round led by Vostok Emerging Finance (VEF). Abhi will use the funds to develop its platform’s technology and increase hiring as well as for marketing activities and other operational expenses.

Village Global, a US-based venture capital firm focused on early-stage startups, also participated in the round, marking its first fintech investment in Pakistan. Other investors include Sarmayacar, I2i Ventures, Zayn Capital, and Portman Wills, co-founder of Wagestream, a London-headquartered financial wellness platform.

“We believe financial wellness and access to credit are basic human rights, which we aim to bring to all our customers,” said Abhi co-founder Omair Ansari, a former Morgan Stanley executive. “Our goal is to digitize consumer credit, address pain points in the manual payments process and be there when consumers need us most.”

Before its launch, Abhi will conduct a three-month pilot program in Pakistan involving around 20 companies across sectors including insurance, steel manufacturing, pharmaceutical, textiles, and retail to gauge the effectiveness of its product and gather information for future growth metrics.

The fintech startup has also teamed up with companies such as TPL, Arena, Espresso, Dewan Towels and Industries, ACT Group, Novins International, and The Organic Meat Company.

This development comes amid a rising demand for financial inclusion Pakistan as the Covid-19 pandemic has upended the lives of many who don’t have access to alternative sources of borrowing.

Riaz Haq said...

Two Fintech Deals Add to Startup Funding Rush in Pakistan


https://www.bloomberg.com/news/articles/2021-06-07/two-fintech-deals-add-to-startup-funding-rush-in-pakistan?sref=8HTMF4ka

by Faseeh Mangi


A flood of overseas capital into Pakistan’s fintech startups that began during the coronavirus pandemic is continuing unabated, with two new fundraising deals announced on Monday.

Khadim Ali Shah Bukhari Securities Pvt.’s fintech trading app KTrade as well as former Morgan Stanley fund manager Omair Ansari’s early wage access platform have raised a total of $6.6 million, adding to the $19.3 million funding for the country’s startups in the first quarter of 2021.

Of that, nearly $15 million came from foreign investors, which poured a record $48 million into the sector last year, according to an April tweet by Invest2Innovate that support startups. The decrease in global air travel during Covid-19 has been an unexpected boon for startups in the South Asian nation, which has had travel advisories issued against it by many nations.

“Covid has helped us because previously an investors’ due diligence process would usually involve them coming to the country. It was not that easy for them to visit Pakistan,” Ali Farid Khwaja, chairman at Karachi-based KASB Securities, said in an interview. “Now they can’t go to any country, they became open to speaking with founders over Zoom and other digital means.”


KTrade, which allows investors to buy and sell equities on the Pakistan Stock Exchange, raised $4.5 million in a funding round led by Hong Kong-based TT Bond Partners and HOF Capital from New York, according to a statement by the company. German investor Christian Angermayer also participated in the round.

Ansari raised $2.1 million in seed funding for Abhi, which like Payactiv Inc. and Wagestream Ltd. allows employees to access already earned wages before they’re paid out. Investors included VEF Ltd. and Village Global, Ansari said in an email.

“There are always stages in an ecosystem,” said Talal Gondal, Chief Executive Officer at TAG Innovation Pvt., which recently raised one of the highest pre-seed fundings in the region. “Pakistan’s fintech wave is just starting.”

Riaz Haq said...

#Pakistan's #tech ecosystem is finally taking off. In 2021, Pakistani #startups are on track to raise more money than the previous 5 years combined. This capital is coming from investors from #Asia, #MiddleEast & top #SiliconValley VCs.
https://tcrn.ch/2TEwRR0 via @techcrunch

https://twitter.com/haqsmusings/status/1412922307438268416?s=20


Pakistan, the world’s fifth most populous country, has been slow to adapt to the internet economy. Unlike other emerging economies such as China, India and Indonesia, which have embraced digitization and technology, Pakistan has trailed the region in the adoption of technology and startup formation.

Despite this, investors have dreamed for years of the huge opportunities in unlocking Pakistan’s potential as a digital economy. As a country of 220 million people, almost two-thirds of whom are under the age of 30, Pakistan draws natural comparisons to Indonesia — which has rapidly emerged as one of the most vibrant technology ecosystems outside the U.S. and China.

After years of lagging behind, over the course of the past 18 months, Pakistan’s technology ecosystem has come to life in unprecedented fashion. In 2021, Pakistani startups are on track to raise more money than the previous five years combined. Even more excitingly, a large portion of this capital is coming from international investors from across Asia, the Middle East and even famed investors from Silicon Valley.

The rapid emergence of Pakistan’s technology ecosystem on the international stage has been no accident — it’s the result of a confluence of changing facts on the ground and shifting dynamics in the startup and investing world as a result of the pandemic.


The sudden emergence of Pakistan’s tech ecosystem on the international stage has been driven by three major factors: an improving security situation, quickly growing mobile connectivity, and critical legal changes and deregulation.

As a frontline state and coalition partner in the United States’ invasion of Afghanistan, Pakistan saw fatalities from terrorist violence soar from 295 in 2001 to a peak of over 11,000 in 2009. This climate of instability and violence scared away international business and investors from Pakistan for much of the first two decades of the 21st century.

Riaz Haq said...

Pakistan's DigiKhata raises $2 million seed to help small businesses digitize bookkeeping and start online stores


https://www.menabytes.com/digikhata-seed/

Faisalabad-based fintech DigiKhata has raised $2 million in a seed round, it announced in a statement today. The round was led by Chinese VC MSA Capital, and joined by Shorooq Partners, SOSV, +92 Ventures, and some angel investors.

Founded in 2020 by Adnan Aslam, DigiKhata enables micro and small businesses to manage their bookkeeping using its web and mobile app. The app replaces offline registers and diaries and helps merchants digitize their bookkeeping by recording financial transactions digitally. It also sends automated reminders to their customers for (due) payments, helping merchants recover debts.

The first user of the app was Adnan’s father who runs a wholesale business in Faisalabad. It claims to have grown the number of registered businesses to over 1 million since then. DigiKhata declined to share the details about their active userbase but told us that their retention numbers are excellent. Once a user has a large number of transactions recorded on the platform, it becomes difficult for them to switch to alternatives, said the startup, adding that in 2020 alone, its userbase has recorded over $1 billion worth of transactions on its platform.

“The MSME sector contributes significantly to the Pakistani economy in terms of GDP, exports and employment. If empowered with the right tools and resources, their value addition to the economy can grow manifolds. With this round of funding, we are looking to scale our team and continue building world-class utility solutions to help these MSMEs generate real economic value and grow,” noted DigiKhata’s founder and CEO in a statement.

Prior to starting DigiKhata, Adnan led finance and accounting functions at different companies in Pakistan, United Arab Emirates, and Africa. He’s a chartered accountant by profession and bootstrapped the business before raising this round, with his savings.

The startup has recently also launched its second product, DigiDokaan, a mobile app that helps MSMEs build and launch their online stores. Since going live three months ago, DigiDokaan has helped users set up 50,000 stores, claimed the startup.

On all fronts, DigiKhata faces competition from multiple players. In the digital ledger space, the local alternatives include CreditBook, Bazaar’s Easy Khata, and Uhdaar, and for building stores, there are options like Dukan and Chikoo. Adnan termed competition good for business, “It keeps you on your toes. We’re focused on serving our userbase by building the best-in-class products.”

Riaz Haq said...

Waada Buys Rival to Become Pakistan’s Top Insurance-Tech Startup
Pakistan’s insurance penetration is 0.7%, trailing neighbors
Nation to see further consolidation as funding slows: investor
---------------

Waada becomes largest technology led insurance start-up in Pakistan - 24/7 News

https://www.insurancejournal.com/news/international/2022/11/07/693869.htm

Pakistani online insurance startup Waada acquired a local rival to create the South Asian nation’s largest player in the field, seeking to benefit from growth in the burgeoning market.

The Karachi-based company took over MicroEnsure Pakistan, a unit of MIC Global operating in South Asia and Africa, in an all-stock deal, according to a statement Friday. The brands combined have 1.5 million active customers, Waada said, without disclosing the deal value. Waada also said it’s closed a seed round of $1.3 million from local angel investors and foreign venture capital firms.


Pakistani online insurance startup Waada acquired a local rival to create the South Asian nation’s largest player in the field, seeking to benefit from growth in the burgeoning market.

The Karachi-based company took over MicroEnsure Pakistan, a unit of MIC Global operating in South Asia and Africa, in an all-stock deal, according to a statement Friday. The brands combined have 1.5 million active customers, Waada said, without disclosing the deal value. Waada also said it’s closed a seed round of $1.3 million from local angel investors and foreign venture capital firms.

----------

https://247news.com.pk/waada-becomes-largest-technology-led-insurance-start-up-in-pakistan/

Waada, The Insurance start-up has announce that the company has become the largest player among all technology-led start-ups in the country’s insurance segment after acquiring its rival company MicroEnsure Pakistan.

The Announcement was made on the startup’s Social media handle LinkedIn, In the announcement, it has been confirmed that deal has been locked however, company has not disclosed the details of the deal yet.

Separately, the company also announced a $1.3 million seed funding round. According to international news agency, the all-stock deal will bring the number of active customers of Wada to 1.5 million. “Waada aims to add customers using online sign-ups and has a goal to distribute 10m policies in three to five years,” it said.

Riaz Haq said...

Pakistan:Insurance market grows by nearly 22% in 2021
https://www.asiainsurancereview.com/News/View-NewsLetter-Article?id=82438&Type=eDaily

The insurance industry posted gross annual premium of PKR432bn ($1.9bn) in 2021, 21.7% higher than the PKR355bn chalked up in 2020, according to data compiled by the Securities and Exchange Commission of Pakistan (SECP).

---------

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Thailand:Insurance industry growth predicted to be flat in 2023
Hong Kong Insurance Awards 2022 winners feted
Taiwan:Cathay Financial Holdings to raise at least US$1.4bn




Riaz Haq said...

Mobile banking doubles, internet banking grows by 51.7% in FY2021-22
As internet banking, POS, and eCommerce transactions post strong growth, the digital payments ecosystem is picking up steam

https://profit.pakistantoday.com.pk/2022/12/23/mobile-banking-doubles-internet-banking-grows-by-51-7-in-fy2021-22/

https://www.sbp.org.pk/PS/PDF/FiscalYear-2021-22.pdf

The overall number of payment cards, however, decreased during the year, from 45.9 million in 2020-21 to 42.4 million in 2021-22.

Bring in the fintech

According to the State Bank’s annual report, the four fully licensed EMIs (electronic money institution); Sadapay, Nayapay, Finja and CMPECC, combined had 262,558 total active accounts and 514,961 payment cards issued to their customers. Last year’s numbers on EMIs were not available for a comparison on how these numbers have grown.

The SBP has in the past has often emphasised on the potential fintech can play to boost digital payments and financial inclusion.

During his speech at the Institute of Banking Pakistan Annual Award Ceremony, Jameel Ahmad, Governor SBP stressed on the need for banks to revisit their traditional approach to service delivery and adapt quickly as digitalization shifts the balance of power from banks to tech savvy entities, hinting at the growing trend in fintech.

“Leveraging digital technology is essential not only to promote financial inclusion, but also to ensure that the industry keeps pace with emerging global trends,” opined Ahmed.

Speaking on the importance of technology, Ahmad quotes M-Pesa, a Kenyan fintech. “An often-cited success story is that of M-Pesa in Kenya, where it single-handedly drove mobile financial services availability and successfully raised financial services access in Kenya. “

Ahmad pointed out that a number of factors already exist in Pakistan that can help drive digital financial innovation and proliferation of a tech-based financial ecosystem. He pointed out that the nation has a fully functional digital ID system, ubiquity of mobile devices, penetration of mobile and broadband services, availability of faster payment rails, remote account opening process, and facilitative regulatory environment for enabling the entry of non-bank entities into the financial arena.

The Central Banker also points out that while fintech has brought competition, it also presents the sector with an opportunity to create synergies and mutually beneficial partnerships.

“Banks and Fintechs can partner with each other to provide innovative products for customers that are otherwise not viable on a standalone basis. For banks, such partnerships can help with penetration in untapped segments like retail businesses and Micro and Small Medium Enterprises, yielding beneficial outcomes for all stakeholders,” he said.

Encouraging the banks that are yet to make consistent and sustained moves toward technological transformation, Ahmad told them to make use of the digital bank frameworks and the instant payment system, RAAST, to position themselves for the future.

Riaz Haq said...

State Bank of Pakistan issues NOCs to five applicants for establishing digital bank

https://www.brecorder.com/news/40220082

Central bank expects after commencement of operations, digital banks will promote financial inclusion by providing affordable/cost effective digital financial services to unserved and underserved segments

The State Bank of Pakistan (SBP) on Friday said that it has issued no-objection certificates (NOC) to five applicants for establishing digital banks in the country.

The following are the ones issued the NOC:

I) Easy Paisa DB (Telenor Pakistan B.V & Ali Pay Holding Ltd.),

II) Hugo Bank (Getz Bros & Co., Atlas Consolidated Pte. Ltd. and M & P Pakistan Pvt. Ltd.);

III) KT Bank (Kuda Technologies Ltd., Fatima Fertilizer Ltd. and City School Pvt. Ltd.);

IV) Mashreq Bank (Mashreq Bank UAE); and

V) Raqami (Kuwait Investment Authority through – PKIC and Enertech Holding Co.)

In January 2022, the SBP introduced a licensing and regulatory framework for digital banks.

“The Framework was the first step towards introducing full-fledged digital banks in Pakistan. The digital banks are expected to provide all the banking services through digital means without any need for their customers to visit the bank branches physically,” said the SBP.

Race to digital banking – final round

In response to SBP’s Licensing and Regulatory Framework for digital banks, the central bank received twenty (20) applications from a diverse range of interested players such as commercial banks, microfinance banks, electronic money institutions and Fintech firms by March 31, 2022.

“Further, a number of foreign players including venture capital firms already operating in the digital banking space also expressed their interest to venture into Pakistani market directly or in collaboration with local partners. The five (05) applicants were selected after a thorough and rigorous assessment process as per the requirements of the Framework.

Bank Alfalah launches QR payment solution with SnapRetail

“Applicants were assessed on various parameters that included fitness and propriety, experience and financial strength; business plan; implementation plan; funding and capital plan; IT and cybersecurity strategy and outsourcing arrangements, etc. Further, all the applicants were given the opportunity to present their business case to SBP.

“Going forward, each of these five applicants will incorporate a public limited company with the Securities and Exchange Commission of Pakistan. Afterwards, they will approach SBP for In-Principle Approval for demonstrating operational readiness and for commencement of operations under the pilot phase. Subsequently, they will commercially launch their operations after obtaining SBP’s approval.”

The SBP said it expects that after commencement of their operations, these digital banks will promote financial inclusion by providing affordable/cost effective digital financial services including credit access to unserved and underserved segments of the society.

Riaz Haq said...

Pakistan approves blockchain-based national eKYC banking platform

https://www.kitco.com/news/2023-03-06/Iran-advances-its-digital-rial-pilot-and-Pakistan-looks-to-create-an-eKYC-banking-platform.html

In other crypto-related developments out of the MENA region, the Pakistan Banks’ Association (PBA) has signed off on the development of a blockchain-based Know Your Customer (KYC) platform with the goal of strengthening the country’s Anti-Money Laundering (AML) capabilities in a bid to counter the financing of terrorism.

According to a report from the Daily Times, the PBA, which is comprised of 31 traditional banks operating in Pakistan, signed off on the project to develop Pakistan’s first blockchain-based national eKYC banking platform on Thursday at the behest of the State Bank of Pakistan (SBP), the country’s central bank.

Included in the list of member banks are multiple international behemoths such as the Industrial and Commercial Bank of China, Citibank and Deutsche Bank.

The new blockchain-based eKYC platform – dubbed “Consonance” – will also reportedly improve operational efficiencies, which are primarily aimed at improving customer experience during onboarding.

Consonance will be developed by the Avanza Group, and the platform will be used by member banks to standardize and exchange customer data via a decentralized and self-regulated network.

Riaz Haq said...

#Pakistan’s Abhi Issues First #Sukuk #Bond for a #Fintech in Region. #Karachi-based startup raised 2 billion rupees ($6.8 million). Demand exceeded expectations with subscriptions reaching twice the anticipated amount. #startup #technology
https://www.bloomberg.com/news/articles/2023-05-12/pakistan-s-abhi-issues-first-sukuk-bond-for-a-fintech-in-region#xj4y7vzkg


Pakistan’s financial platform Abhi has raised the first-ever Sukuk bond for a fintech firm in the region, opening a new funding line for startups that have seen a slowdown in venture capital.

The Karachi-based startup raised 2 billion rupees ($6.8 million), an industry first for the Middle East, Africa and Pakistan region, said Omair Ansari, chief executive officer and co-founder. Demand exceeded expectations with subscriptions reaching twice the anticipated amount, he said in an interview.