Swiss-based BNPL platform ZoodPay, has fully acquired Karachi-based Tez Financial Services. ZoodPay, with offices in the Middle East and Asia, marks the first M&A deal in Pakistan with the acquisition. Financial details of the acquisition were not disclosed.
In 2018, Tez Financial Services became the first fintech company to be granted a Non-Bank Financial Company license in Pakistan. The company provides micro loans to the underbanked and unbanked population across 160 cities in Pakistan. Tez Financial Services is backed by investors including Planet N, Flourish Ventures and Accion.
CEO of ZoodPay, Michael Khoi, said that Pakistan offers unlimited potential as a market, since there are enormous numbers of people who do not have access to credit facilities. He said that by combining the experience and unique ecosystem of ZoodPay with Tez, which has local expertise, the company would be able to have a positive impact on the people of Pakistan, at the same time empowering them with access to easy and affordable digital financial services.
Less than 5 percent of Pakistan’s population has access to formal credit. Existing players in the market do not succeed with mass lending due to the unavailability of risk assessment and lack of credit histories.
ZoodPay to address existing problems
According to a statement from the company, ZoodPay intends to address this problem with its unique B2B2C digital lending ecosystem.
Along with Tez, the company aims to provide affordable and flexible payment solutions to the underbanked and unbanked masses in Pakistan.
Naureen Hyat, Co-founder of Tez Financial Services, said that the acquisition will enhance financial inclusion for the masses by bringing together the strongpoints of both companies. She said that Tez offers deep insights in digital lending in Pakistan, with a special emphasis on default mitigation. ZoodPay offers its execution capability with over 10 million users spanning five countries.
In addition to providing services for underbanked and unbanked individuals in Pakistan, the company also intends to offer a unique suite of lending solutions to SMEs and their customers, which will be supported by flexible payment options, logistics management and a wide distribution network of partners and merchants.
Naureen was quoted as saying that the company aims to grow at a rate of 30 percent month on month in 2022, and will add to the momentum with the launch of the Virtual Instalment Card. She additionally said that the focus of the company would be on responsible growth and balanced scale and credit risk.
ZoodPay currently operates in Iraq, Jordan, Uzbekistan, Lebanon and Kazakhstan. The company had raised USD50 million from Zain Ventures and Sturgeon Capital. Part of the investment will be utilized for ZoodPay’s expansion into Pakistan.
