ZoodPay, a buy now pay later platform based in Switzerland that operates in many Middle Eastern and Central Asian markets has acquired Pakistani consumer financing startup Tez. The transaction’s financial specifics were not released, but the announcement stated that it is Pakistan’s first M&A deal in the fledgling fintech sector.

Tez, founded in 2016 by Naureen Hyat and Humza Hussain, is a digital platform that provides nano-loans to Pakistan’s unbanked and underbanked communities. It offers personal loans of up to PKR 10,000 ($50) that consumers can pay back in installments, according to its website. For these loans, Tez charges a fixed one-time fee that ranges from 10% to 20% based on the loan amount and customer profile.

The startup, which is backed by Accion, Flourish Ventures (Omidyar Network), and Planet N, became Pakistan’s first licensed non-bank financial company (NBFC) in 2018, according to a release. It had already raised over $1 million in funding. In 2019, the Karachi-based fintech won $100,000 in the Visa Everywhere Initiative for Women competition.

“We established Tez intending to enable access to money for the public as easy as access to a mobile phone,” the co-founders of Tez stated of the purchase. We are humbled and elated by the confidence shown in our business model by larger regional players, and we look forward to taking Tez to the next level, where our lessons learned in crafting the digital lending journey and managing risk can be used to deliver consumer-centric lending solutions at scale while building credit histories for the masses.”

ZoodPay, which has offices in Jordan, Iraq, Lebanon, Uzbekistan, and Kazakhstan, has received funding from Zain Ventures and Sturgeon Capital. ZoodPay would expand its offerings to Pakistan with the acquisition of Tez.

“Three key elements of the company’s digital infrastructure support its lending strategy: I acquiring consumers and merchants through a variety of distribution channels, including its e-commerce marketplace and network of retailers and partners, (ii) obtaining rich transactional data from its internal universe of fintech, an e-commerce marketplace, and logistics, and (iii) utilizing its proprietary credit scoring algorithms to assess credit risk and extend credit.”

It’s unclear whether ZoodPay intends to launch its BNPL product in Pakistan.

“Pakistan is a market teeming with promise considering the number of people wanting access to credit facilities,” said Michael Khoi, CEO of ZoodPay. We’re certain that by combining ZoodPay’s unique ecosystem and expertise operating in frontier markets with Tez’s local know-how, strong team, and ecosystem relationships, we’ll be able to empower Pakistanis by providing them with easy, accessible, and dependable digital financial services.”

“The Pakistani startup ecosystem has reached an inflection moment,” stated Nadeem Hussain, Chairman of Tez. In addition to large fundraises, local players are increasingly being acquired by foreign players. This adds to the worldwide value that Pakistani startups are generating. Planet N was one of the earliest investors in companies on the market. The first-mover advantage is evident.”

Image Credit: Tez


Data professional, Writer and Thinker at TECHnicalBeep, aspiring to provide quality content with respect to "All things Startups" to our readers. It is important for the people that they are aware of how the world is changing and evolving daily, and how those ideas and innovations can potentially help grow the Ideasphere of the region.

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