KARACHI: Pakistan’s HR tech startup Paismo on Tuesday announced it has raised $1.3 million in a seed round, which was led by Indus Valley Capital and also saw participation from Singapore’s Antler and Jedar Capital, headquartered in New York.
In its statement to Business Recorder, Paismo, which offers its software-as-a-service (SaaS) product on subscriptions, said the round was oversubscribed and funds would be used for hiring resources (expanding the team) and maintaining operational costs.
The seed round brings total funding to date to $1.5 million after the startup also raised $200,000 in November 2022, according to data available on Crunchbase website.
“Paismo’s SaaS offering is built to provide solutions internationally while creating local impact,” it said in its press release.
“In Pakistan, Paismo focuses on key initiatives by increasing employee bank account openings and easier access to health benefits. It is Pakistan’s first modern HR tech, payroll and benefits provider with the aim to go global, including to markets such as MENA and Southeast Asia.”
Founded in November by two University of Pennsylvania alumni, Rebecka Zavaleta and Usama Mahmud, the startup aims at utilising technology to streamline HR processes and addressing the challenges of inefficiency. Among its functions include the integration of attendance/timesheets to payroll and making accessible the payslip for employees via mobile app. It has also partnered with Adamjee Insurance on enabling localised benefits and MCB Islamic Bank for inclusion of financial incentives.
“We’ve sat through hundreds of different company payrolls and are building the most streamlined, customisable product where setup happens in just days versus months within the industry,” Zavaleta, who is now based in Lahore, told Business Recorder via message.
Zavaleta has a decade of product leadership experience in California, with a track record of global product releases with tech giants like Google, Tiktok, and Meta (formerly known as Facebook). Mahmud worked as a technical advisor to the government on education reforms in Pakistan’s most populated province Punjab, and helped it raise over $50 million in 2020-21.
“The main HR and payroll challenges that business faces are often similar, regardless of the location,” Mahmud told Business Recorder when asked to elaborate on the ‘made in Pakistan, for the world’ vision.
“We are building a product with a capital-efficient business model that can be scaled globally, while ensuring local benefit integrations. I believe Pakistan needs such tech-products that serve markets worldwide.”
On its current users, the company said they belong to “different verticals and business sizes”.
“We aim to have an annual recurring revenue of over $1 million by the end of 2024,” the company told Business Recorder when asked to share projections.
Paismo’s announcement comes at a difficult period for Pakistan’s economy and its startups that saw the lowest level of funding in three years during the quarter ended June 2023. In the three-month period, startups in Pakistan attracted a meagre $5.2 million, a 95% year-on-year decline and 77.5% fall on a quarterly basis.
The fall in funding also coincides with massive political and economic uncertainty in the country with the $3-billion Stand-By Arrangement with the International Monetary Fund (IMF) only providing a few months of breathing room.
However, the institutional investors remained excited at Paismo’s growth prospects.
Aatif Awan, founder of Indus Valley Capital, said he was excited about the opportunity to build a product that solves a huge problem for employers and employees across emerging markets.
Sherif Nessim, founder of Jedar Capital, said there remains a huge need for HR services in emerging markets where global players lack local culture understanding.
“It was clear that this should be home-grown,” Nessim was quoted as saying in the statement. “I was glad I had the opportunity to get in touch with Paismo founders at the very early ideation stage and saw their commitment to building a product that can set them apart both at emerging markets and globally.”
Markus Bruderer, partner at Antler, said Paismo’s product offering and approach aligns with the changing demands of the modern workforce.
Copyright Business Recorder, 2023