2021 has been the year for startups – they have reined in record capital from investors and expanded their businesses. While this has been true from the Indian perspective (as you no doubt know, if you have been following us), other countries have earned a slice of the pie as well.
Pakistan and India are cut from the same geographic and ethnic cloth, and yet, there are several differences between the two countries. However, when it comes to their startup sectors, both have fared well this year. While India has produced a record number of unicorns this year, startups in Pakistan have raised over $300 million this year alone, which is more than the previous six years combined. Pakistani digital platform CreditBook has taken advantage of the capital guzzling startup ecosystem to gobble up $11 million in its pre-Series A funding round.
The round included participation from Tiger Global, which has invested in nearly 28 startups such as CRED, Vedantu, PharmEasy, BharatPe, Gupshup, ShareChat, and others, and invested nearly $677 million in Indian companies last year. It also included the participation of investors such as Better Tomorrow Ventures, Firstminute Capital, Banana Capital, VentureSouq, Ratio Ventures, and i2i Ventures, as well as angel investors Sriram Krishnan and Julian Shapiro.
The investment in CreditBook marked the first investment by Tiger Global and Firstminute Capital in the Pakistan startup space. They join global investors such as Kleiner Perkins, Addition, 20VC, and Buckley Ventures for making their first investments in Pakistan’s maturing startup ecosystem.
Launched in late 2019, CreditBook serves the MSME sector in Pakistan, which is simultaneously growing and remaining an underserved one. The startup had raised $1.5 million in a funding round this May and develops secure software for businesses to manage their credit, sales, and expense cycles. It is working to solve a problem that is also prevalent in India – the overdependence on paper to maintain books and ledgers along with the low cash flow and the inability of small businesses and merchants to access proper credit options. Indian startups like Khatabook have been working to digitize their bookkeeping methods and help them open up to online payments, while work is being done on the digitization of payments and steady democratization of credit to small businesses and users in the country. CreditBook estimates that the financing gap for small businesses amounts to nearly $45 billion.
These obstacles prevent small businesses to grow properly and compete with foreign behemoths, and CreditBook is working to solve the problem by offering a bookkeeping app, enabling merchants to digitize their handwritten ledgers.
The startup is a young one but its platform is already used by merchants in over 400 towns and cities, and the number of transacting users on its platform has increased by 10 times since last year. It is also looking to move beyond offering digital bookkeeping and is working on building and testing financial products.