LAHORE: Oraan, which positions itself as Pakistan’s first gender-inclusive fintech startup, has claimed to raise $3 million in the largest seed funding closed by a local women-founded and led startup.
According to a statement, the financing round was co-led by Zayn Capital and Wavemaker Partners, with participation from Resolution Ventures, i2i Ventures, Hustle Fund, Haitou Global and Plug and Play.
Notable angels like Claire Diaz-Ortiz, former partner at Magma Partners, who has also come on board as an advisor to the company also participated in the round.
Oraan has raised financing from Tharros which has earlier invested in Bykea, Zayn Capital, an angel syndicate led by Google executives, and Graph Ventures, bringing its total funding raised to just over $4 million.
Founded in 2018 by Halima Iqbal, a former investment banker, and Farwah Tapal, a design strategist, Oraan, focusing on gender-specific innovation, has designed products and services around credit, insurance, and savings in Pakistan.
“Oraan was founded when we realised that the large majority of the Pakistani population struggles to access financial services simply because they are not designed for them,” said Halima Iqbal, CEO and founder at Oraan, in a press statement.
“While there is a demand among women for credit, insurance and savings services, they are unable to approach financial institutions due to mistrust, complexity of products and challenges around mobility.”
Oraan Committees, the startup’s flagship product, is the digital reimagination of Rotating Saving and Credit Associations (‘ROSCAs’), an age-old method of group saving and credit. “ROSCAs are known as committees in Pakistan and used by 41 per cent of the Pakistani population, with up to $5 billion rotating annually,” the statement read.
Using the Oraan app, users are able to sign up for committees that suit their needs and allow them to save with groups beyond their immediate geographical and social networks.
Today, Oraan claims it has a community of over 10,000 savers, 84 per cent of whom are women, from across 170-plus cities in Pakistan. The startup claims it has 28 per cent growth month-on-month in terms of demand for committees.
“The idea is to use savings as an entry point to service women and build a very gender-centric product, and then eventually build a neobank which is gender-inclusive,” Halima told Profit.
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.
“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,” says Faisal Chowdry, general partner at Zayn Capital.
“Our belief is that the digitisation 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. In addition, 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. “
“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 7 per cent, making the gender gap in banking access in Pakistan one of the most serious in the world,” said Gavin Lee, general partner at Wavemaker Partners in Southeast Asia.
“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.”
“The latest round of funding will be used to accelerate Oraan’s expansion into other products with its extremely sticky user base,” the fintech startup said.