Pathao secures $12m from foreign investors to boost fintech initiatives
Having transformed into a profitable entity over the past two years, Pathao now plans to holistically serve its customers with its fintech offerings.
Pathao, a consumer technology startup, has raised $12 million in a new funding round, led by a UAE-based firm VentureSouq, to support its strategic shift towards financial technology.
This round, equivalent to over Tk140 crore, brings Pathao's total fundraising to $50 million—the highest amount raised by a "pre-series B" startup in Bangladesh.
The homegrown company, a leader in ridesharing, smart logistics, and buy-now-pay-later services, also maintains a strong foothold in the food delivery market.
VentureSouq, leader of this funding round, is a venture capital fund manager known for its notable investments in platform companies across the Middle East, Africa, and South Asia.
Anchorless Bangladesh, a US fund focused on Bangladesh, participated in the round alongside Osiris Group, South Asia Tech, Openspace Ventures, and several other investors.
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Having transformed into a profitable entity over the past two years, Pathao now plans to holistically serve its customers with its fintech offerings. It is at the "pre-series B" stage meaning the company is in a fundraising journey before it raises a bigger round of investment called Series B.
"Pathao is far more than a brand, or a suite of products — it is a lifestyle. Just as it has radically transformed urban transportation, logistics and the gig economy, our efforts in fintech will reshape the financial landscape in Bangladesh," said Fahim Ahmed, managing director and CEO of Pathao.
The company, having already made progress in fintech following its ventures in logistics, ride-sharing, and food delivery, introduced Pathao Pay, a digital wallet, and Pay Later, Bangladesh's first and largest buy-now-pay-later solution. The new funds will further bolster its fintech division, he added.
Pathao's machine learning-driven underwriting has already made the Pay Later service gross profitable. The new funding will be instrumental in scaling these fintech offerings, refining their technology and broadening market reach.
"Our core users are the digital native youth of Bangladesh. The traditional banks are too primitive for them, and the other digital wallets are focused more on breadth targeting the underbanked. We're looking to build a tailored financial management ecosystem for our customers, the young professionals and tech-enabled entrepreneurs in Bangladesh," said Fahim Ahmed.
Pathao's fintech offerings are designed to provide personalised financial solutions to over 50 lakh young professionals and over 5 lakh tech-enabled small businesses in Bangladesh, utilising cutting-edge technology to enhance user experience.
"Given Pathao's existing reach and trust in its markets and the calibre and integrity of its team, we believe Pathao will be a significant and positive player across multiple service lines for years to come. We certainly view the company as the strongest potential distribution platform for fintech products across Bangladesh, bar none," said Tammer Qaddumi, co-founder and general partner at VentureSouq.
"Pathao is uniquely positioned to capitalize on Bangladesh's economic growth, offering unparalleled access to its rapidly evolving digital ecosystem. We believe it's the best investment for gaining macroeconomic exposure to the Bangladesh consumption story," said Rahat Ahmed, founding partner and CEO at Anchorless Bangladesh.
Since its inception in 2015, Pathao has served over 1 crore customers and created more than 5 lakh employment opportunities in Bangladesh's gig economy and small businesses, said the company.
"Pathao is keen to unleash its cutting-edge technology to bring about a financial transformation that can truly enable consumers and small businesses to transact how they want, access funds when they need and manage funds how they should," said Fahim Ahmed.
