S African company invests $1m into Pakistani startup

DNI Group, Neem partnership aims to promote embedded finance in Pakistan

KARACHI:

In a groundbreaking move that promises to revolutionise Pakistan’s financial landscape, South Africa’s renowned firm, DNI Group, has made a significant investment of $1 million into Neem, an emerging startup in the country. This strategic partnership aims to foster innovation, catalyse growth, and promote embedded finance in Pakistan.

According to a statement by Neem’s co-founder, Vladimira Briestenska, the funds will be utilised to enhance Neem’s Banking-as-a-Service technology and platform. Additionally, the investment will be used to recruit skilled individuals in crucial areas such as product development, partnerships, compliance, and product marketing. Briestenska reiterated that their primary focus for the next phase of expansion remains firmly on Pakistan.

Highlighting the opportunity for growth in Pakistan’s financial sector, Waqas Ghani Kukaswadia, an ICT analyst at JS Global, stated, “Pakistan, with a population of 229 million, stands as the 5th largest country in terms of population. However, it also has one of the lowest financial services penetration in the region.” With low financial services penetration and increasing digitisation, organisations like Neem play a vital role in promoting economic growth and financial stability.

Neem, a financial wellness platform headquartered in Karachi, aims to serve over 134 million underbanked consumers and 2.5 million micro, small, and medium-sized enterprises in Pakistan. The startup takes pride in being the first financial services firm in the country to issue sustainable and environmentally friendly debit cards.

The collaboration between Neem and DNI Group signifies a significant advancement for the embedded finance industry, which integrates financial services into nonfinancial businesses’ infrastructures, reducing the reliance on traditional financial institutions. Despite global circumstances, Neem remains optimistic about the expanding digital ecosystem in Pakistan and is committed to building financial resilience not only within the country but also beyond its borders.

Startup investment specialist Kapeel Kumar emphasised the potential benefits of this partnership for the fintech space in Pakistan. He stated, “First, it will help to raise the profile of Pakistani fintech companies on the global stage. Second, it will provide Neem with access to DNI Group’s network of partners and investors. Third, it will help accelerate the development of embedded finance solutions in Pakistan.”

CEO of DNI’s technology arm Digital Ecosystems, Ross Venter expressed excitement about partnering with Neem. He praised their high-quality team and operations within a vibrant and growing economy. Venter highlighted that Neem’s objective of providing financial wellness aligns with DNI’s goals of empowering individuals and enhancing financial and digital inclusion. DNI hopes that this investment will expedite the development, exchange, and commercialisation of their respective technologies for the benefit of consumers globally.

Last September, Neem announced that it had secured $2.5 million in seed funding from global and local investors. This latest investment from the DNI Group comes at a time when startup funding in Pakistan has been decreasing, with no deals being finalised in April for the first time in three years.

Published in The Express Tribune, June 27^th, 2023.

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