Startup ‘Udhaar Book’ raises $6 million seed funding

KARACHI: Udhaar Book, a Pakistani cashflow management services provider for small businesses, raised $6 million (RM24.94mil) in early funding to digitise mom-and-pop stores that mostly operate using a manual register and handwritten entries, Bloomberg reported on Monday.

The Karachi-based startup, whose parent is Toko Lab Inc., raised the money in seed funding from investors including Fatima Gobi Ventures, Plaid co-founder William Hockey’s Muir Capital, Tinder co-founder Justin Mateen’s JAM Fund LLC, Integra Partners and Commerce Ventures LLC.

Venture capital and private equity investors are ramping up investment in Southeast Asian nations and India. Startups in Pakistan too have seen the funding rush this year with inflows at a record about US$300mil (RM1.24bil), which is more than the past six years combined, according to data from Crunchbase and Invest2Innovate.

Pakistan is mostly a cash-based economy but startups are looking to change that. The nation is home to as many as 30 million micro-, small- and medium-enterprises that operate manually and deal in cash.

Many small business owners such as grocery shops are not able to expand since they need to keep an eye on drawer holding all the cash, Fahad Kamr, Udhaar’s co-founder said in an interview.

Udhaar Book that started last year has 1.4 million registered users and a little over half-a-million monthly active users. The company’s app allows small businesses digital book keeping, inventory, invoicing and payroll management along with other features.

"We’ve barely scratched the surface so obviously expanding the reach of the product is super important at this time,” said Kamr, who moved back from Canada for the venture and was previously a founding member of data portal Capital IQ. "That’s where a lot of the funding will also go.”

Earlier this month, Abdul Razak Dawood, adviser for commerce and investment to Prime Minister Imran Khan, said the country’s startups had set a record by raising $305 million during January and September 2021.

A group of young startups have made splashy funding announcements in recent weeks. Quick-commerce startup Airlift unveiled a record $85 million Series B round last month, followed by business-to-business (B2B) venture Bazaar’s record $30 million Series A round. Last month, Tag, a one-year-old Pakistani startup that offers banking and financial services, raised over $12 million in what is now the largest seed financing round in Pakistan, and Oraan raised $3 million in the largest seed funding closed by a women-led startup in the country.