KARACHI: A Pakistan-based fintech, Abhi, is all set to launch its operations in the United Arab Emirates (UAE) from next month, enabling thousands of employees to draw salaries before the next payroll, the firm’s CEO said, the first step in the company’s expansion to the Middle East and beyond.
Abhi is the first Pakistani financial wellness platform that enables salaried employees to draw a percentage of their accrued salary before the next payroll through a mobile app or via SMS. It was also the first Pakistani fintech among 16 startups chosen by Abu Dhabi-based business incubator, Hub71, for its Incentive Program in August this year.
Abhi, after raising around $19 million in less than two years from investors from the United States and the UAE, is now expanding its outreach to the Middle East from next month. It launched in Pakistan in July last year.
Omair Ansari, the co-founder and CEO of Abhi, told Arab News the company would launch in the UAE in November 2022, empowering an expected 100,000 workers.
“Now workers in the UAE will have access to their salaries on a daily basis and they will not have to wait for the month to end to withdraw their salaries,” Ansari said on Thursday. “The employees would be able to withdraw their salaries based on their earned working hours, which would be accrued on a per minute basis.”
The fintech will be the first Pakistani startup to offer such services in the UAE. It currently has over 100,000 active users from more than 300 companies.
The Abhi chief said he was also planning to facilitate Pakistani workers living in the UAE with cross border transactions so that they could remit in real time.
“We are also working to facilitate Pakistani workers in the UAE so that they can be enabled to make cross-border transactions in real time to their families at home any time during the month instead of waiting for the end of the month,” Ansari said.
Next, the startup has plans to expand its operation to other countries also, including Bangladesh, Sri Lanka, and Saudi Arabia.
The Pakistani startup is expanding its outreach at a time when after a record year of Pakistani startups raising $350 million in venture capital funding in 2021, reality set in in 2022, with major companies announcing they were reducing services and laying off employees due to sluggish economic activity and amid rising fuel prices and inflation. Things are only expected to get worse as Pakistan faces the economic impacts of worst-ever floods.
“This is a tough time for startups in Pakistan, in fact for the whole economy, that is disturbed and suffering from economic slowdown,” Ansari said. “In such conditions, startups move into survival mood and avoid unnecessary spending.”
Pakistani financial experts said a tightening global macro environment coupled with increasing domestic political instability was a cause of concern for the domestic startup economy.
“The major challenge is economic instability. When the macro headlines are so negative, even the most optimistic investors opt to wait and see,” Uzair Younus, Pakistan director at the Washington-based Atlantic Council, told Arab News.
However, despite heightened investor skepticism stemming from geopolitical tensions and mounting fear of a global recession, total funds raised by Pakistani Startups in the nine months of 2022 stood at $328 million, 87 percent of the total funding in 2021, according to Alpha Beta Core, a startup investment advisory firm.
Indeed, many Pakistani experts believe local startups will continue to get global attraction despite adverse economic circumstances.
“We look forward to a better close of 2022 as compared to 2021,” Khurram Schehzad, CEO of Alpha Beta Core, said. “Pakistan startups still have much better surviving rates, both in terms of size and numbers, than the rest of the region or the world.”