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Thursday, February 15, 2024

Women-led Oraan raises $3M to increase financial accessibility for women

Oraan is Pakistan's first women-led fintech startup to have raised $3 million in funding. The Startup is aiming to increase financial accessibility for women in Pakistan and hopes to become a full-fledged neobank and very heavily based on the community.

Karachi-based gender-inclusive startup Oraan has raised $3 million in seed funding. Oraan is Pakistan’s first women-led fintech startup to raise a seed round.

The funding round was co-led by returning investor Zayn Capital and Wavemaker Partners, with participation from Resolution Ventures, i2i Ventures, Hustle Fund, Haitou Global, Plug and Play, and angels like Claire Diaz-Ortiz, a former investing partner at Magma Partners and early Twitter employee.

Tech Crunch noted that the startup in total has raised over $4 million in funding. Oraan came into existence in 2018, when Halima Iqbal, a Pakistani investment banker returned to her home country after a decade in Canada.

The word “Oraan” is an Urdu word for flight.

Tackling the financial services in Pakistan, she realized how women were clearly at a disadvantage considering accessibility. Tech Crunch quoted Iqbal saying, “I had a really hard time opening up a basic bank account. It took me about three and a half months,” and that got her into researching how hard other financial accessibility is for women in the country.

Then she met product designer and entrepreneur Farwah Tapal, who had recently returned to Pakistan from Spain, and the two co-founded Oraan in 2018 to help women access financial services.

According to the press statement, the startup has designed products and services around credit, insurance, and savings in Pakistan, which it says is home to five per cent of the world’s unbanked female population.

“While there is a demand among women for credit, insurance, and savings services, they are unable to approach financial institutions due to mistrust, the complexity of products and challenges around mobility”, the Iqbal told the press.

She described Oraan Committees, the startup’s flagship product, as the digital reimagination of Rotating Saving and Credit Associations (ROSCAs) — an age-old method of group saving and credit.

According to Oraan’s research, ROSCAs, or committees as they are called in Pakistani society are used by 41 per cent of Pakistan’s population, with $4 billion in rotation, and with the Oraan app, users can sign up for committees matching their requirements, allowing people to sign up for the committee without any geographical location.

According to Tech Crunch, Oraan formalizes ROSCAs, offering five-month or ten-month plans. One of the main differences between Oraan’s ROSCAs and informal ones is that users can pick which month they want the pool of money, because the app’s treasury management backend forms committees based on members’ needs and ability to pay.

The startup claims to have onboard a community of over 10,000 savers, with 84 per cent of them being women, from more than 170 cities in Pakistan. Oraan has reportedly posted a 28 per cent month-on-month growth in demand for the committees.

The users use Oraan Committees to save, borrow, build emergency funds, and achieve other goals like travel and pay for education, working capital, and IVF treatments.

Regarding the future of Oraan, Co-founder Halima Iqbal said, “We want to become a full-fledged neobank and very heavily based on the community because that’s where we see that women want a sense of belonging,” said Iqbal. “When it comes to financial transactions, that’s one of the things they feel they lack, that sense of belonging.”

Zain Capital tweeted about the development saying, “We are excited to announce that we have co-led Oraan’s round along with Wavemaker Partners as they raised $3 million.”

Congratulations poured from everywhere to celebrate the achievement of Oraan.

Minister for Planning and Development Asad Umar went to Twitter to say, “Great to see Pakistani women also making their mark in the startup space.”

He added, “Initiatives like Oraan which improve financial inclusiveness for women would make a great impact on key strategic objectives like women empowerment and increasing savings rate.”

Former Chief Digital Officer of Pakistan and Co-Founder Rayn Group Tania Aidrus also commented on the development saying, “Funding news just keeps getting better for Pakistani startups. Oraan just announced the largest seed round by a women-led fintech.”

She added, “Big milestone for women in tech & entrepreneurship & for the millions that have been financially excluded.”