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. 



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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…
Pakistani Marketplace For Small Stores Tajir Raises $17 Million In A Series A Round Led By Kleiner Perkins


Tajir had previously raised a $1.8 million seed round in the summer of last year and since then, revenue has increased by 10x. The company allows stores to purchase over 1,000 stock-keeping units via its platform, and it has been adding approximately 100 SKUs/month to continuously expand selection.

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Pakistani B2B marketplace for mom and pop stores Tajir, cofounded by brothers Babar and Ismail Khan, announced today that it has raised $17 million in a Series A round led by Kleiner Perkins. Other investors in the round include YC Continuity, AAVCF, Fatima Gobi Ventures, Flexport, Golden Gate Ventures, Liberty City Ventures, VentureSouq, and angel investors including Under 30 honoree and CEO of Figma Dylan Field, and Flexport CEO Ryan Petersen.


https://www.forbes.com/sites/igorbosilkovski/2021/06/02/pakistani-marketplace-for-small-stores-tajir-raises-17-million-in-a-series-a-round-led-by-kleiner-perkins/

The Lahore, Pakistan-based Tajir’s customers are mom and pop stores which struggle to purchase inventory.

“When consumers walk into small mom and pop stores they often find the products they want out of stock,” Babar, who serves as the company’s CEO, says. “Stores are often unable to provide the brands that consumers actually want to buy since retail is so fragmented in Pakistan.”

According to him, shop owners often spend hours to make all the orders, and sometimes they would have to close their stores, or find a friend or relative to go to the wholesaler physically —a pattern that would repeat too often and would take too much time.

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Tajir lets stores place orders for inventory through its app and allows customers to compare the prices of goods, purchase inventory and have access to 24/7 ordering with a next day delivery.

“We’re doing for stores in Pakistan what Amazon did for consumers in the U.S.,” Babar says.

Ismail Khan, the CTO of the company, says that 90% of the retail economy in Pakistan flows through mom and pop stores.

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“These are small, difficult to access, it’s a problem for brands to deliver in a reliable way.”

Tajir primarily sells convenient store items, packaged consumer products, like biscuits, soft drinks, home and personal care items, soaps, shampoos etc. The company generates revenue through taking a percentage of the orders.

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Prior to cofounding Tajir, the Khan brothers, whose father owned a distribution business in Pakistan, both received U.S. diplomas. Babar got his Bachelor degree from Tufts and an MBA from Berkeley, while Ismail got a computer science degree from Brown. With Tajir, they participated in Y Combinator’s winter class of 2020.

Mamoon Hamid, partner at Kleiner Perkins (who is himself originally from Pakistan), who led the round says that given Pakistan’s prevalent bodega model, what Tajir was doing was very compelling.

“Their software and mission to improve that supply chain and availability of products and pricing and digitizing that process made a ton of sense,” Hamid says. “I thought that would be the first foray for a company to make an attempt at doing a lot more to be a consumer company, not just a wholesale company.”

Riaz Haq said…
First #Pakistan #Digital Bank Starts in June. #Islamabad-based #fintech company TAG Innovation Pvt has raised about $5.5 million in pre-seed funding, making it one of five biggest deals in the #MiddleEast, #Africa and Pakistan region #technology #startup https://www.bloomberg.com/news/articles/2021-06-03/world-s-fifth-largest-nation-gets-its-first-digital-bank-in-june

TAG plans to make the (account-opening) process simple with potential customers needing just a copy of their national identification card.


The company has raised about $5.5 million in pre-seed funding, making it one of five biggest deals in the Middle East, Africa and Pakistan region, according to data from Crunchbase. The funding round was led by Quiet Capital Management, Liberty City Ventures and Fatima Gobi Ventures. TAG also received strategic angel investments from general partners of Andreessen Horowitz, Khosla Ventures LLC, Canaan Partners and Mercury’s Immad Akhund.

TAG joins other digital payment startups in raising funds as digital banks take off in emerging markets where millions lack access to banking services. Razorpay, an Indian startup that facilitates digital payments, said in April it was raising $160 million, while Egyptian digital banking app Telda raised $5 million last month.

Pakistan has the third largest unbanked adult population globally with about 100 million adults without a bank account, according to the World Bank. About 70% of the population doesn’t have a bank account, according to Raza Jafri, head of equities at Intermarket Securities Ltd. Potential customers complain about the lengthy documentation process and multiple branch visits needed to open an account.

“In Pakistan, the system is broken,” said Gondal. “Some banks don’t even have a banking app. It’s that bad.”

TAG plans to make the process simple with potential customers needing just a copy of their national identification card

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…
Foreign Investors Pour Millions Into Pakistan’s FinTech Startups

https://www.pymnts.com/news/investment-tracker/2021/foreign-investors-pour-millions-into-pakistan-fintech-startups/

Foreign investors are pouring millions of dollars into Pakistan’s FinTech startups as two new funding deals — KTrade and Abhi — notch an infusion of fresh capital totaling $6.6 million, Bloomberg reported on Monday (June 7).

These latest funding deals are on top of the $19.3 million raised by Pakistan’s startups in the first quarter of this year. Of that, almost $15 million came from investors outside of the country. Last year, foreign investments in Pakistan totaled a historic $48 million, according to an April tweet by Invest2Innovate, per Bloomberg.

KTrade, also known as KASB Securities or Khadim Ali Shah Bukhari Securities, is a FinTech trading app founded in 2018 by Ali Farid Khwaja in Karachi. Also headquartered in Karachi, the salary advance platform Abhi was co-founded this year by Ali Ladhubhai and Omair Ansari, a former Morgan Stanley fund manager.

KTrade, which enables 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 with participation by German investor Christian Angermayer, according to a company statement, per Bloomberg.

Ansari raised $2.1 million in seed funding for Abhi, which provides people with a tool to get advanced access to money earned ahead of payday. Investors included VEF Ltd. and Village Global, Ansari told Bloomberg.

Amir Wain, CEO of i2c Inc., told PYMNTS' Karen Webster that the COVID-19 pandemic helped accelerate the wider build-out and adoption of mobile infrastructure, which is now resulting in a greater number of developing and emerging economies embracing the digital ecosystem. The interview in February coincided with i2c’s partnership with TAG to introduce a payments super app. At the time, the unbanked population in Pakistan consisted of about 100 million adults.

When it comes to developing digital tools for emerging economies, Mariam Hussain Randhawa, head of consumer products at JazzCash, said in a PYMNTS interview that a customer-centric approach is key. She added that Pakistan represents a significant market opportunity for companies that can offer tools to meet the needs of the underbanked.

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