Finance company ZoodPay purchases Pakistani technology firm specializing in consumer loans, Tez.
In a significant move for Pakistan's burgeoning fintech sector, ZoodPay, a prominent buy-now-pay-later (BNPL) platform headquartered in Switzerland, has acquired Tez, a Pakistani consumer lending fintech. This marks the first merger and acquisition deal in Pakistan’s fintech sector, signifying growing maturity and consolidation in the local fintech ecosystem.
Tez: A Consumer Lending Fintech
Tez is a fintech startup that focuses on consumer lending, offering installment-based credit or buy-now-pay-later (BNPL) solutions to consumers. The company has become the first licensed Non-Bank Financial Company (NBFC) in Pakistan in 2018 and offers nano-loans to unbanked and underbanked populations in the country through its digital platform.
ZoodPay: A Growing BNPL Platform
ZoodPay operates across several markets, including Pakistan, providing interest-free installment plans. The company's lending strategy is fortified by three integral elements of digital infrastructure: acquisition of consumers and merchants, deriving rich transactional data, and leveraging proprietary credit scoring algorithms. ZoodPay has raised close to $50 million from Zain Ventures and Sturgeon Capital and operates in Jordan, Iraq, Lebanon, Uzbekistan, and Kazakhstan.
Combining Strengths
The acquisition aims to combine ZoodPay's larger BNPL infrastructure with Tez's consumer lending expertise to expand lending services and improve customer reach. With the acquisition of Tez, ZoodPay aims to expand its offerings to Pakistan.
Impact on Pakistan’s Fintech Landscape
This deal signals increasing investor confidence and the potential for further consolidation in Pakistan’s rapidly evolving digital financial services market. Tez won $100,000 in the Visa Everywhere Initiative for Women competition in 2019, and the loans offered by Tez range from PKR 10,000 ($50) and can be paid back in installments. Tez charges a fixed one-time fee for these loans, which ranges between 10 to 20 percent depending on the loan amount and customer profile.
This acquisition is a testament to the growing maturity and consolidation in Pakistan’s fintech sector, as well as the increasing investor confidence in the market. As more deals like this one emerge, we can expect to see further developments and innovations in Pakistan’s digital financial services landscape.
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