YC-backed Udhaar Book raises $6 million to help Pakistan merchants digitize their business, from bookkeeping to payroll

Udhaar Book, a super app for Pakistan’s small businesses, has raised  US$6 million in seed funding from multiple investors including Fatima Gobi Ventures (FGV), Plaid co-founder  William Hockey’s Muir Capital, Tinder co-founder Justin Mateen’s JAM Fund, Commerce Ventures, Liberty  City Ventures, Atlas Ventures, Integra Partners, Omri Dahan (Marqeta) and Immad Akhund (Mercury Bank). 

The funds will be used to build out Udhaar Book’s super app ecosystem, which now enables small businesses to conduct digital bookkeeping, manage inventory, invoicing, staff attendance, and payroll – in a single,  seamless app.  

Based on the Urdu word ‘udhaar’ which means a loan or on credit, Udhaar Book was launched in 2020 as a  digital ‘khata’ or bookkeeping app to help small businesses keep track of sales, expenses, and udhaar (credit extended to customers). 

The brainchild of Fahad Kamr, Shah Warraich, and Myra Ali, Udhaar Book has since graduated from Y  Combinator’s accelerator program and expanded its solutions to become a super app for small businesses.  

In Pakistan, Udhaar Book stands out as a one-stop-shop for end-to-end small business operations. No other app provides merchants with the ability to manage their inventory and payroll, in addition to accounting and collection needs.  

Pakistan is home to an estimated 25 – 30 million micro-SMEs that are still run manually. These small businesses contribute 74% to the country’s gross domestic product, highlighting the massive value add potential when their operations are digitized. 

Fahad Kamr, Founder and CEO of Udhaar Book, said:

“The majority of small business owners in Pakistan continue to do their accounts on paper and process payments in cash, which is kept in what we call the  ‘wooden cash drawer’. So small business owners typically work 16-hour days to monitor this drawer and minimize theft. Solving this problem requires digitizing all manual elements of the business while making the transition as seamless as possible for the already busy business owner.

“Udhaar Book has now evolved into a super app, essentially an operating system for small businesses. We free up the small merchant’s time, so he can spend it with his family and develop the full potential of his business,” Fahad added. 

Udhaar Book has collaborated with various telecommunications firms and banks including Telenor, Zong,  United Bank Limited, and Bank Alfalah, expanding the Udhaar Book super app ecosystem.  

Fahad said,

“Our partnerships with telcos, banks, and wallets means Udhaar Book’s 1.4 million small  merchants are now able to sell mobile top-ups digitally to earn ancillary income.” 

“In the past three months, Udhaar Book’s monthly active users have skyrocketed 300%, with over 1.4 million  registered users across 421 Pakistani cities and regions and 510,000 monthly active users. Growth has been  great, whilst retention rates are trending upwards as more business owners stay for our wide variety of  solutions,” he noted. 

As a prominent investor in the digital future of Pakistan, Ali Mukhtar, General Partner for FGV, said “in just  over a year, Fahad and his team has brought Udhaar Book to new heights, from its Y Combinator credentials  to now building out a holistic super app ecosystem for small businesses. We cannot wait to see what is next  in the pipeline, and are excited to join Udhaar Book on its journey to bring Pakistan into the global digital  economy.” 

Justin Mateen, #1 on Business Insider’s Seed 100 Investor list, said

”Udhaar Book’s monthly active users  have grown by over 1100% this year, and they’ve achieved that growth and retention by really focusing on  the needs of their micro SME users. Excited to be a part of the journey.”