ZoodPay, the digital lending platform, expands to Pakistan with landmark acquisition of Tez Financial Services

May 23, 2022

  • ZoodPay acquires Tez in the first-ever fintech M&A deal in Pakistan
  • Pakistan is a high potential market for ZoodPay, with a population of over 230 million people with less than 5% benefiting from access to credit
  • Entering the Pakistani market precedes ZoodPay’s series C round

ZoodPay, the leading digital lending platform for e-commerce in the Middle East and Central Asia, has entered Pakistan by fully acquiring Karachi headquartered Tez Financial Services (Tez). Backed by leading investors including Planet N, Flourish Ventures (Omidyar Network) and Accion, Tez became the first fintech in Pakistan to be granted a Non-Bank Financial Company (NBFC) license in 2018 and ever since has carved out a specialized niche in the consumer lending space providing nano-loans to the unbanked and underbanked masses across 160+ cities in Pakistan. Through this acquisition, ZoodPay is positioning itself as a key new player in the consumer lending and fintech industry in Pakistan.

Commenting on the expansion, Michael Khoi, CEO of ZoodPay said, “Pakistan is a market brimming with potential given the number of people seeking access to credit facilities. We’re confident that by combining ZoodPay’s unique ecosystem and experience operating in frontier markets with Tez’s local know-how, strong team and ecosystem partnerships, we’ll be able to positively impact the life of Pakistani people and empower them by giving them access to easy, affordable and reliable digital financial services”

In the absence of credit histories and credible data, conventional players have been unable to assess risk, deterring their interest in serving the masses – resultantly less than 5% individuals in Pakistan have access to formal credit. ZoodPay aims to address this problem by leveraging its holistic B2B2C digital-lending ecosystem. The company’s lending strategy is fortified by three integral elements of digital infrastructure including, (i) Acquisition of consumers and merchants via its diverse distribution channels including its own e-commerce marketplace and network of retailers and partners, (ii) Deriving rich transactional data from its internal universe of fintech, e-commerce marketplace and logistics, and (iii) Leveraging its proprietary credit scoring algorithms to assess credit risk and extend credit to both consumers and merchants. This dynamic ecosystem is supplemented by the combined strengths of ZoodPay and Tez, whereby ZoodPay brings its supreme execution ability from regional markets with almost 10 million users across five countries and Tez brings deep insights into digital consumer lending with a successful track record in mitigating default levels.

Sharing their views, Naureen Hyat and Humza Hussain, Co-founders of Tez articulated, “We started Tez with an ambition to make access to finance for the masses as easy as access to a mobile phone. We are humbled and thrilled by the confidence shown in our business model by larger regional players and look forward to the next level of development for Tez where our learnings in crafting the digital lending journey and managing risk can serve as a foundation for delivering consumer-centric lending solutions at scale, while creating credit histories for the masses.”

ZoodPay has raised US$50 million to date, with participation from leading global and strategic investors including Zain, the leading MENA-based telecom entity and London based VC Fund Sturgeon Capital. The company has launched its Series C round, part of the proceeds of which will be allocated to ZoodPay’s expansion into Pakistan. With a population of over 230 million people, half of whom are young and digitally-savvy, over 100 million smartphones and 90% internet coverage, Pakistan represents a clear high potential market, with a dire need of formal credit.

Sharing his views on this transaction, Nadeem Hussain, Chairman of Tez said, “The Pakistani startup ecosystem has hit its inflection point. In addition to sizable fundraises, acquisitions of local players by international players are starting to take place. This further validates the global value Pakistani startups are creating. Planet N was one of the first in the market to invest in startups. We are now seeing the first mover advantage.”

About ZoodPay

Headquartered in Switzerland and managed by an experienced team of Fintech and eCommerce professionals, ZoodPay has 11 offices across the world. The company is delivering “Swiss Quality” flexible payment solutions to merchants and shoppers alike in the fast-growing mobile markets across Central Asia and the Middle East, namely Uzbekistan, Kazakhstan, Iraq, Jordan, Lebanon, and now also in Pakistan. ZoodPay leverages its proprietary, AI based technology which utilizes data from its dynamic ecosystem to serve the unbanked and underbanked in markets where historical banking data and credit information for customer scoring is scarce or limited.

About Tez Financial Services

Founded in 2018 by Co-founders Nadeem Hussain, Naureen Hyat and Humza Hussain, Tez Financial Services is a fully digital licensed NBFC providing frictionless financial access to the unbanked and underbanked masses across 160+ cities in Pakistan. Powered by proprietary credit scoring algorithms based on alternative data and a payment-agnostic platform, Tez has established a niche in the consumer lending market serving collateral-free nano-loans to individuals within minutes, having mastered the areas of credit risk and fraud management. The company has fostered top talent in the Pakistan fintech ecosystem with a strong focus on culture and growth.


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