SadaPay CEO Brandon Timinsky has resigned from his position, a little over a week after Turkish neobank Papara announced that it had acquired SadaPay.
In a message to employees, Timinsky wrote that his responsibilities as the CEO took a toll on his mental and physical health.
“My role shifted from creating new things to managing more and more responsibility. Eventually, my days became consumed with solving problems, and the relentless demands of running a company with nearly 300 employees began to take a toll on me,” he wrote to employees.
“The last few months have been particularly challenging, leaving me totally overwhelmed and exhausted,” he wrote, adding that after much reflection, he made the decision to step down from his position as CEO of the fintech company
Brandon Timisky said a formal statement in this regard will be released tomorrow when reached out for comment.
The American-origin entrepreneur had been at the helm of SadaPay for 6 years, scaling the company to 1 million digital wallet users under an EMI license. Earlier, Brandon has launched and exited GasNinjas, an on demand fuel delivery service, in the US.
In 2018, he moved to Pakistan to start a fintech company for the vastly unbanked population and acquired the in-principle approval for EMI license in 2020.
The acquisition
On May 30, Papara officially acquired SadaPay in an all stock deal that valued the company at $50.5 million. An earlier report on the acquisition mentioned that the deal value was $30 million, which was later confirmed to be $50.5 million. The deal also includes a $10 million equity injection into SadaPay by Papara.
In his earlier message to the team, CEO Timinsky had said that post acquisition, SadaPay will operate independently under Papara’s umbrella, but their support will help them move faster and achieve more.
“While there will be some changes, these will be focused on enhancing our capabilities, optimising our organisation, and preparing for scale.”
Papara plans to immediately bring $10 million as foreign direct investment into Pakistan to solidify SadaPay’s position in the market. Over a few years, this could go up to $50 million, which could set SadaPay up for securing a digital retail bank licence (DRB) licence in the future. In the immediate horizon, this investment has been earmarked for technological advancements, which would enable rolling out new products and market expansion.
Specifically, SadaPay plans to use the investment to expand its consumer footprint, including scaling SadaPay’s consumer base, enhancing marketing efforts and developing new customer acquisition channels. These funds would also be deployed towards enhancing the acceptance of QR codes via Raast at SMEs, and towards rolling out credit products through collaboration with partner banks.
One of the plans in the works for SadaPay has been introducing remittance services for overseas Pakistanis. Papara happens to have similar plans and the acquisition would accelerate the rollout of remittance service in key markets, with a significant Pakistani expatriate population, such as in the UK and Saudi Arabia.
Why did SadaPay get acquired?
From an entirely logistical perspective, Sadapay being acquired by Papara makes complete sense. Established in 2016, much like Sadapay, Papara is also an EMI that has made its model work in its home country.
The company has over 17 million users and an e-money licence, offering a suite of services, such as money transfers and payments. Crunchbase data shows Papara has only raised as much as $2 million in funding. The company processes an estimated 528 million transactions yearly, with a volume of $32 billion. At home it plans to become a financial superapp and offers investment services as well, allowing users to buy Turkish stocks, US stocks, commodities and bonds.
Meanwhile SadaPay, founded in 2019 and quickly became one of the fastest growing Electronic Money Institutions, reaching 1 million users by 2024. The company offers a range of features including P2P money transfers, debit cards, and payment products, and processes $1.5 billion in annual payment volume.
In many ways it is a perfect match. Sadapay needs funding at a time when money is scarce, and Papapra is set on an expansion mission. An acquisition would be a faster entry into the Pakistani market as well and sources close to the deal have revealed to Profit that if it wasn’t SadaPay, Papara would have gone on to acquire any of the other EMIs in Pakistan like NayaPay. And that would have made things very difficult for SadaPay. This strategic acquisition signals Papara’s entry into the Middle East and South Asia markets, marking a milestone expansion for the company.
The question is whether this is a fair deal or one side got the better end of the bargain. Back in February, Profit had access to the deal documents that the two parties had shared with each other. Credible information also put the valuation of the deal at $50.5 million including the $10 million that will be pumped into the company by Papara. For many this might seem like a lowball offer because Sadapay at one point was valued at around $100 million. However, a closer look at the deal shows it might be worth more.
The deal is an all-stock deal, which means Sadapay will be receiving Papara stocks in exchange for selling the company rather than a cash payout other than the $10 million equity injection. At the same time, Papara is planning an initial public offering (IPO) in 2025 and has been aggressively unlocking new markets. Papara, which has been valued at over a billion dollars and is the first fintech unicorn out of Turkey, recently acquired Rebellion Pay in Spain and is reportedly making another acquisition in Egypt. In October last year, Ahmed Karslı, the CEO of Papara, had said that the company was actively entering into mergers and acquisitions in the European market.
An IPO could significantly inflate the price of Papara stocks, which would then make the value of the deal Sadapay has struck more.
Plans moving forward
SadaPay CEO, in his message to employees, said that post acquisition, the company could explore geographical expansion and roll out new products and services that Papara offers in the other markets.
On the tech integration and strategy front, the company aims to install a unified technological platform across all regions where Papara operates. Since there is a substantial overlap with the technology infrastructure at SadaPay and the one developed by Papara, Papara’s current technology stack will be integrated in SadaPay, wherever feasible, post acquisition.
Deal documents showed that on the back of technological integrations, SadaPay would be able to accelerate the launch of advanced financial products and services that Papara has in other markets, such as diverse card options, including ghost virtual cards for one time use and voice cards for the blind. Customer loyalty programs, multi currency accounts, automated savings accounts, investment and wealth management services, insurance and other products are on the list of products and services to be rolled out.
