DigiKhata, a fintech company based in Faisalabad, has raised $2 million in a seed round, according to a statement released today. MSA Capital, a Chinese venture capital firm, led the round, which included Shorooq Partners, SOSV, +92 Ventures, and some angel investors.
DigiKhata, founded in 2020 by Adnan Aslam, is a web and smartphone software that helps micro and small enterprises manage their bookkeeping. The programme helps merchants digitise their bookkeeping by documenting financial transactions digitally, replacing offline registers and diaries. It also helps merchants collect debts by sending automated reminders to their consumers for (past-due) payments.
Adnan’s father, who operates a wholesale business in Faisalabad, was the app’s first user. Since then, it claims to have increased the number of registered enterprises to almost 1 million. DigiKhata declined to share the details about their active userbase but told us that their retention numbers are excellent. Once a user has a large number of transactions recorded on the platform, it becomes difficult for them to switch to alternatives, said the startup, adding that in 2020 alone, its userbase has recorded over $1 billion worth of transactions on its platform.
“In terms of GDP, exports, and employment, the MSME sector makes a substantial contribution to the Pakistani economy. If given the proper tools and resources, their contribution to the economy can skyrocket. In a statement, DigiKhata’s founder and CEO said, “With this round of funding, we are looking to develop our team and continue building world-class utilities solutions to help these MSMEs earn real economic value and flourish.”
Adnan supervised financial and accounting activities at many companies in Pakistan, the United Arab Emirates, and Africa before founding DigiKhata. He’s a chartered accountant by trade, and he bootstrapped the company with his own money before raising this round.
DigiDokaan, the startup’s second product, is a smartphone app that assists MSMEs in building and launching their online storefronts. DigiDokaan claims to have assisted users in setting up 50,000 businesses since coming live three months ago.
DigiKhata is up against a lot of competition on all fronts. CreditBook, Bazaar’s Easy Khata, and Uhdaar are local alternatives for digital ledgers, and Dukan and Chikoo are local alternatives for creating stores. “It keeps you on your toes,” Adnan said of competitiveness in the workplace. We’re focused on providing the best-in-class products to our users.”
He believes in partnerships when it comes to monetization plans, saying, “What we’re establishing is Pakistan’s greatest network of MSMEs.” We’ve already received a lot of interest from a variety of businesses who want to offer a variety of products and services to our user base. We’re carefully considering all of our options.”
“MSMEs constitute the largest transactional industry in Pakistan, and DigiKhata is establishing a vital set of tools to dramatically boost their efficiency and scalability,” stated a spokesperson of MSA Capital. The team’s executional brilliance has allowed them to collect the greatest user base of any such platform in the United States, and their vision will enable the introduction of similar platforms in other countries.
“We are seeing a global trend to bring MSME’s online and empower them digitally, and DigiKhata is at the forefront of this movement,” said Shane Shin, Founding Partner of Shorooq Partners. We are thrilled to partner with Digikhata as Founders Partners, and we look forward to utilising our strong regional network to help Adnan and the team expand across the GCC and MENA region.”