Udhaar Book, a digital bookkeeping app for small businesses in Pakistan, has raised $6 million in seed funding, it revealed on Monday.
The round saw the participation of several investors, including Fatima Gobi Ventures (FGV), Muir Capital, co-founder of Plaid, William Hockey, JAM Fund, co-founder of Tinder, Justin Mateen, Commerce Ventures, Liberty City Ventures, Atlas Ventures, Integra Partners , Omri Dahan of Marqeta and Immad Akhund of Mercury Bank.
According to a press release, the funds will be used to build the app’s ecosystem, which now enables small businesses to perform digital accounting, manage inventory, invoicing, staff attendance and payroll.
Udhaar Book was launched last year to help small businesses track sales, expenses and credit and surpassed one million installs a few months ago.
The brainchild of Fahad Kamr, Shah Warraich, and Myra Ali, the app has since graduated from Y Combinator’s accelerator program and expanded its solutions to become a super app for small businesses.
Kamr, founder and CEO of Udhaar Book, said a majority of small business owners in Pakistan continue to do their accounts on paper and process cash payments which are kept in a “wooden cash drawer”.
“So small business owners typically work 16 hour days to monitor that drawer and minimize theft. Solving this requires digitizing all the manual elements of the business, while making the transition as seamless as possible for the already busy business owner,” he said.
“Udhaar Book has now become a super app, basically an operating system for small businesses. We are freeing up small business owner’s time to spend with their family and develop their business to its full potential,” a- he added.
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According to the press release, the startup has collaborated with various telecom companies and banks, including Telenor, Zong, United Bank Limited, and Bank Alfalah, in a bid to expand the app ecosystem.
“Our partnerships with telecom operators, banks and wallets mean that Udhaar Book’s 1.4 million small merchants are now able to sell mobile recharges digitally to earn ancillary income,” Kamr said.
He said that over the past three months, the number of monthly active users has soared by 300% with over 1.4 million registered users across Pakistan and 510,000 monthly active users.
“Growth has been excellent, while retention rates are trending up as more business owners stay for our wide variety of solutions,” he said.
FGV General Partner Ali Mukhtar praised Kamr and his team for taking the app to “new heights”.
“We can’t wait to see what happens next and are excited to join Udhaar Book in its journey to bring Pakistan into the global digital economy,” he said.
Tinder co-founder Justin Mateen noted that the number of monthly active users of the app had grown by more than 1,100% this year, a feat that was achieved by “focusing on the needs of their micro SME . [small and medium enterprises] users”.
“I’m excited to be part of the journey,” he said.
According to the press release, Pakistan is home to around 25-30 million micro-SMEs which are still managed manually.
“These small businesses contribute 74% of the country’s gross domestic product, highlighting the enormous potential for added value when their operations are digitized,” the statement said.