QisstPay, the first BNPL (buy now, pay later) solution to enter Pakistan, announced Wednesday raising $15 million across its seed and pre-seed rounds, led by MSA Capital.
Global Founders Capital, Fox Ventures and First Check Ventures also participated in the fundraise, which included a mix of equity and debt. Angel investors for the round included Scalapay co-founders Simone Mancini and Johnny Mitrevski, former Venmo and current Sylp CFO Ashley Davies, former Affirm and United Bank Limited of Pakistan.
QisstPay offers no-interest installment plans, similar to existing BNPL solutions offered by Klarna, Afterpay and Affirm, but charges no late fees.
The company will use its latest funding to continue growing and organizing its team, building out compliance and security systems, adding customer support across its channels, and elevating marketing.
Building trust, alongside growth
CEO and co-founder Jordan Olivas, who previously helped Klarna launch its buzzy ‘Pay-in-4’ model, said the company is focused on building trust and flexibility for its Pakistan consumers, who mainly use cash-on-delivery options due to the high rate of fraud in the country.
“In Pakistan cash-on-delivery is so huge, and it’s because consumers are afraid what they are going to get isn’t right. We need to build a trust layer between consumers and merchants. It’s not just ‘buy now, pay later’, it’s building a that relationship between brands and consumers,” Olivas said in an interview with FinLedger.
Due to that disconnect between brands, merchants and consumers, Olivas believes the most important components for a BNPL include 24/7 support, agreement transparency, payment reminders and follow ups.
Founded in November 2020 by Olivas and Saad Ahmed, the company has seen a 92% growth rate week-to-week, serves over 500 retailers in Pakistan and is adding four figures worth of consumers per day. Olivas says the company currently has 80 employees with plans to reach 100 by the end of the year, and expects to partner with 1,000 retailers by November.
“You need to make sure the consumer and retailer are 100% confident in what you’re doing,” he said, adding that it’s important to be selective with brand partnerships. “You also need the right brands, you need to sign good, reputable brands, and not go after every single retailer. You need to be laser focused.”
Brands partnered with QisstPay range from large companies like Samsung, Camelbak, Diesel, Philips, Xiaomi and Lenovo, to regional offerings including elo, Sapphire, Uniworth, Logo Shoes.
Olivas said that open communication with customers, and the country’s lack of alternative lending products, largely limits BNPL consumer consequences.
“When people miss payments: first off, we lock the account. You have to understand, 99% of the credit applications in the country are denied. For them not to use us, they are shooting themselves in the foot,” he said.
“We could decide to claw back services, but we have already built-in automatic communication methods. A lot of the time the defaulters come back, saying ‘Sorry I couldn’t make the payment, here you go, can you can resume my account?’ It’s a question of supply and demand.”
That’s now, what’s later?
With early funding secured, Olivas said the company is hoping to partner with traditional Pakistani financial institutions, and plans to expand services into Sri Lanka and Bangladesh by the end of the year.
“Series A is hopefully on the horizon, that’s the big one as far as natural progression,” Olivas said, explaining his biggest goals for the next year. “We also want to be seen globally. We want people to know who we are and see these emerging markets are a great place for startups.”
“It’s been wild, there has been more venture capitalist money this year than in the past five to six years combined. Pakistan is the last emerging market that hasn’t been touched by VC, and people are starting to realize it,” he said.