Startup AdalFi Generates $7.5 million in seed Funding

A startup AdalFi, a digital lending infrastructure provider, announced that it had raised $7.5 million in seed funding. At this time of hour when Pakistan is dealing with a deepening economic crisis, it is the first major corporate funding announcement since the start of the year.

Startup AdalFi Generates $7.5 million in seed Funding

The funding round was led by COTU Ventures, Chimera Ventures, Fatima Gobi Ventures and Zayn Capital alongside angel investors. The company’s mission is to promote financial inclusion by providing people and small and medium enterprises access to credit.

AdalFi scores the financial transactional data available by banks enabling personalised digital marketing to qualified prospects. It also provides the customer journeys which are embedded within the bank’s digital presence to enable real-time disbursement of loans.

“In essence, we have built better underwriting models for banks. Not only have we lowered the cost of credit scoring and underwriting and therefore the cost of credit but we changed their outlook and got them to change their approach,” Co-Founder and CEO Salman Akhtar said.

He further pointed out that only 5pc of the deposit customers in Pakistani banks are also borrowers. The startup enables banks to tap this vast, latent customer base.

Moreover, the startup has grown the gross loan volume (GLV) by 30 per cent month-on-month for the last 19 months. It also enabled a cumulative amount of Rs1 billion in GLV through December.

Since its launch, over 70,000 loans have been disbursed with a default rate of under 0.1pc. In January 2023 alone, AdalFi generated Rs390 million in lending and is on track to exceed Rs1bn within Q1 2023.

The company has signed on 14 banks, including United Bank Limited (UBL), Habib Bank Limited (HBL), and Meezan Bank, among other banks and microfinance banks operating in the country.

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