Oraan, a Karachi-based fintech company, run by women, successfully raised $3 million marking the highest amount of seed funding closed by a local women-led startup as reported by a press statement released by the company.
According to the statement the funding was co-led by Zayn Capital and Wavemaker Partners and saw participants comprising of Resolution Ventures, i2i Ventures, Hustle Fund, Haitou Global, Plug and Play, as well as angels like Claire Diaz-Ortiz, previously a partner at Magma Partners, who is also serving as an adviser to the company.
The fintech has in the past, raised financing from Zayn Capital, an angel syndicate led by Google executives, Tharros and Graph Ventures, surpassing $4m as the combined funding raised up till now.
The founders of Oraan are Halima Iqbal, a former investment banker and Farwah Tapal, a design strategist who started the company in 2018.
Halima Iqbal said, “ Oraan was founded when we realized that the large majority of the Pakistani population struggles to access financial services simply because they are not designed for them. While there is a demand among women for credit, insurance and savings services, they are unable to approach financial institutions due to mistrust, the complexity of products and challenges around mobility.”
The press statement says that Oraan has come up with a product and service line centred around credit, savings and insurance, in the country. It further states that Pakistan comprises 5% of the unbanked female population in the world.
The startup’s star product is Oraan Committees which is described in the statement as the digital reimagination of Rotating Saving and Credit Associations (ROSCAs) which is an ancient system of group saving and credit.
The statement explained, “ROSCAs, usually known as committees or beesees in Pakistan, are used by 41 per cent of the Pakistani population, with up to $5 billion rotating annually”.
It said that the Oraan app allows users to sign up for committees according to their respective needs and requirements. The app facilitates the users to save with groups that are outside of their immediate social and geographical networks.
The Securities and Exchange Commission selected Oraan for its Regulatory Sandbox programme, as reported by the statement. Currently, Oraan boasts a community of more than 10,000 savers, out of which 84% are women, hailing from over 170 cities.
“These women use Oraan Committees to save, borrow, build emergency funds, and achieve other goals like travel and pay for education, working capital, as well as medical treatments.”
The startup intends to design more financial products focusing on Pakistani women, “in the hopes of becoming the country’s women-first digital, social bank” according to the statement.
Faisal Chowdry of Zayn Capital said: “Having been involved with Oraan since early 2020, we are excited to co-lead Oraan‘s latest funding round to help promulgate indigenous finance across Pakistan and in the region. Our belief is that the digitization of indigenous finance solutions and behaviours is the key to unlocking the fintech opportunity in Pakistan and providing real utility in terms of product for customers.”
He further added, “Being able to be a part of the story of the only women-led and founded fintech in Pakistan, with a goal of empowering women who sit at the financial helm of every household, fits with our ethos at Zayn.”
General partner at Wavemaker Partners in Southeast Asia, Gavin Lee, commented, “With half of Pakistan’s 200+ million population being female, it is striking that bank account penetration for women in the country stands at just seven per cent, making the gender gap in banking access in Pakistan one of the most serious in the world.”
“We believe that designing a female-friendly financial product to help women access the banking system, and in turn allow them to access credit, insurance, and investment, is one of the most critical ways to promote sustainable economic growth in Pakistan,” he added.
Former special assistant to the Prime Minister on matters pertaining to digital Pakistan Tania Airdus said that the funding of $3 million raised by Oraan is a “big milestone” for women in entrepreneurship and technology and for “millions that have been financially excluded”.
Federal Planning, Development and Special Initiatives Minister Asad Umar posted a tweet acknowledging the event saying, “Initiatives like Oraan which improve financial inclusiveness for women would make a great impact on key strategic objectives like women empowerment and increasing savings rate.”