Sequoia, the world’s most influential venture capital fund, has made its first investment in Pakistan, joining a growing list of leading investors who have supported young companies in the South Asian market over the past year.
Dbank, headquartered in Islamabad, said Thursday it has raised $17.6 million in a seed round, the largest in Pakistan, co-led by Sequoia Capital Southeast Asia, the recently unveiled $1 billion fund, and Kleiner Perkins. . Brazilian neobank Nubank, Askari Bank, Rayn also took part in the round, according to the Pakistani startup.
Dbank is a fintech startup that will seek to expand the reach of financial services in Pakistan in a “transparent and friendly” manner, by taking on the informal credit system that tends to exploit those in need with exorbitant and unpredictable interest rates, Dbank said. Tania Aidrusco-founder of Dbank, in an interview with londonbusinessblog.com.
Johan Surani, VP at Sequoia Southeast Asia, said in a statement that Dbank will try to “democratize” banking, but the startup wants to keep its roadmap a secret for now, Aidrus said.
Nearly half of the population of Pakistan, which is home to more than 220 million people, currently does not have a bank account. “We want our users to have control over their money and make informed choices,” Aidrus says.
She started Dbank with Khurram Jamalic, who have both studied the challenges faced by the unbanked population during their previous tenure at Google, where they worked on payment rails for the company’s Next Billion Users initiative. Aidrus then briefly joined the Government of Pakistan as Chief Digital Officer.
State Bank of Pakistan, the country’s central bank, has been aggressively exploring options in recent years to modernize the country’s payment infrastructure to increase financial inclusion in the country. The country has developed Raast, a real-time payment system, for instant digital transactions and also built NADRA, a digital identification platform.
The central bank has also introduced a new full digital banking license, allowing more players to act as banks that can take deposits from customers without having to have physical centers. Dbank has applied to become a digital retail bank in Pakistan.
“The reason this is the perfect time to launch a venture like Dbank is that the key building blocks are now in place: Raast, the real-time payment system of the State Bank of Pakistan, backed by a seamless digital identity through NADRA. We have seen the multiplier effect that digital public infrastructure can have on the private sector’s ability to help economies move from cash to digital,” Jamali said in a statement.
Aidrus said Dbank plans to eventually build a customer-centric digital bank in the pan-Islamic world, starting with Pakistan.
Numerous investors including Tiger Global, Addition and Prosus Ventures have supported Pakistani startups over the past two years to boost the local ecosystem. The country is also feeling the pressure of the downturn in the world market. Airlift, one of Pakistan’s most celebrated startups, recently announced it was shutting down after a funding crisis.
“Pakistan, the fifth most populous country in the world, has a rapidly growing middle class with increasingly sophisticated banking needs. This is a unique opportunity to build a large, customer-centric bank for millions of people. Dbank addresses this by taking a digital-native approach to democratize banking and make a wide range of financial services friendly, transparent and thus accessible to the whole country. The team behind this is a unique combination of talented people and Sequoia Capital Southeast Asia is delighted to have the opportunity to be early partners with them,” Surani of Sequoia Southeast Asia added in the statement.