Sequoia backs fintech Dbank in first Pakistani investment – TechCrunch

Sequoia, the world’s most influential venture capital fund, has made its first investment in Pakistan, joining a growing list of high-profile investors who have backed young firms in the South Asian market over the past year.

Islamabad-headquartered startup Dbank said Thursday it has raised $17.6 million in a seed round, the largest in Pakistan, led by Sequoia Capital Southeast Asia, its recently unveiled $1 billion fund, and Kleiner Perkins. Brazil’s neobank Nubank, Askari Bank, Rayn also participated in the round, the Pakistani startup said.

Dbank is a fintech startup that will seek to expand the reach of financial services in a “transparent and friendly” manner in Pakistan, taking on the informal credit system that tends to exploit those in need with exorbitant and unpredictable interest rates, said Tania Aidrus. co-founder of Dbank, in an interview with TechCrunch.

Johan Surani, VP of Sequoia Southeast Asia, said in a statement that Dbank will seek to “democratize banking,” but the startup wants to stick to its roadmap for now, Aidrus said.

Almost half of the population of Pakistan, home to over 220 million people, currently does not have bank accounts. “We want our users to be in control of their money and make informed choices,” said Aidrus.

She has co-founded Dbank with Khurram Jamali, both of whom studied the challenges facing the unbanked population closely in their previous assignment at Google, where they worked on payment tracking for the company’s Next Billion Users initiative. Aidrus then briefly joined the Government of Pakistan as Chief Digital Officer.

The State Bank of Pakistan, the country’s central bank, has aggressively explored opportunities 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 bank digital licence, so that several players can act as banks that can take deposits from customers without having to have physical centres. Dbank has applied to become a digital retail bank in Pakistan.

“The reason it 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 supported by 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 shift economies 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.

A slew of investors, including Tiger Global, Addition and Prosus Ventures, have backed Pakistani startups over the past two years in a boost to the local ecosystem. The nation is also feeling the pressure of the global market downturn. Airlift, one of Pakistan’s most celebrated startups, recently announced its shutdown following the funding crisis.

“Pakistan, the world’s fifth most populous nation, has a rapidly growing middle class with increasingly sophisticated banking needs. This signals 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 entire nation. The team behind this is a unique combination of talented people and Sequoia Capital Southeast Asia is truly thrilled to have the opportunity to be early partners with them,” Sequoia Southeast Asia’s Surani added in the statement.