KARACHI: Pakistan’s financial platform Abhi raised the first-ever Sukuk bond for a fintech in the Middle East, Africa and Pakistan (MENAP) region, it announced on Friday. The bond worth Rs2 billion ($7.1 million) potentially opens a new funding line for startups that have struggled to attract funds in recent months.
The Karachi-based startup, which allows salaried employees to access funds before their payday, said demand for the Sukuk exceeded expectations, with subscriptions reaching twice the anticipated amount due to the company’s strong credit ratings, creditworthiness and profitability.
“We are honored to have the support of Pakistan Credit Rating Agency (PACRA) and all the investors to launch this first-of-a-kind Sukuk,” Omair Ansari, CEO and co-founder of Abhi, was quoted as saying in the statement.
“With this new funding, we can help ease the financial burden on struggling companies and provide much-needed relief through working capital financing during these challenging times,” Ansari added.
Abhi’s platform enables employees of its partners to withdraw salary advances based on their accrued wages at any time. The fintech funds these advances, and hence, it has no effect on partner employer’s balance sheets and repayments are deducted from the employee’s salary.
In 2022, PACRA assigned a long-term instrument rating of ‘AA’ and a short-term rating of ‘A1+’ to Abhi, which enabled the fintech to issue the Islamic bonds.
Abhi said the successful issuance of Sukuk, a financial instrument complying with Islamic law, is a significant achievement for the company, and the broader financial industry in Pakistan.
“It represents a new era of financial innovation in the country and is expected to have a positive impact on the economy,” it said.
The startup said the bond issuance immediately follows its qualification for the international selection panel (ISP) by Endeavor, and its selection by Hub71 to boost expansion into the Middle East, where Abhi is partnering with companies to financially empower them and their employees.
Last year, Abhi said it secured $17 million in a Series A fund-raising round led by international venture capital (VC) firm Speedinvest and supported by Global Ventures, VentureSouq, VEF, Sturgeon Capital, Rallycap and FJ Labs.
In June 2021, the company raised $2 million as seed investment, led by Vostok Emerging Finance. Later, in November, it said it had raised funds again, this time at a $40-million valuation, just months after introducing its business. The amount of funds raised in this round was not disclosed.
