The American who saw Pakistan before the VCs did

शाहरणा कपिल निर्मास रात welcome back to another episode of thought behind things. आज के जो मेहमान हैं उनके लिए मैं ख़ासकर English बोलूंगा here on fourth I am gonna be speaking in English because the guest that we have today, one of the most,

you know, requested guests at the TBT community as well. We have with us Brandon Temensky who is the CEO and founder of SADAP. Sir, thank you so much for being part of the show. Oh, thanks for having me. Tora tora sikaraha home. The problem is I've I've seen I've seen you around. I've heard so much, but all of the podcasts are mostly in Urdu, so I can't really understand them that well. Yeah. Appreciate some awesome guests I saw recently, you know, not too long ago. You had you had in Rangkhan. That was impressive.

I don't know how you pull all these people in. That that's that's incredible. Thank you. Thank you. So I'm gonna jump right into it, Brandon. Sure. And and and starting with the format, way that we normally do. Where were you born? What was the real life like for you? And, you know, just, yeah, tell me about, your childhood. Yeah. Yeah. Well, everybody's curious, especially what's the white guy doing in Pakistan.

So born and raised in Miami, Florida in The United States. And, I was essentially a really introverted, video game addicted, nerdy kinda guy when I was much younger.

And Really? Yes. Yes. For some reason You wouldn't I had this I had this impression that you'd be this sort of frat boy who was, yeah, one of those bad boys who couldn't really, you know, work out in college. And so they were like, okay. The US isn't working out for me, so I'm gonna go travel the world. Well,

okay. No no problem. I'm not offended. Yeah. So so, essentially, I I played a lot of video games, and I would do these online tournaments. And I had a team that didn't have a website. And I thought, I'm I'm gonna make a website for my team because every other team online had a website. So I taught myself very basic programming first with, HTML, then then later PHP.

And what year was this?

Or rather how old were you? I was I I was, like, 14 or 15 years old. Wow. So a long time ago. But I realized I was a very bad programmer. But that that allowed me to do a few things in my early years. So I I I built an online business. Now I can talk about it, but it's it's kinda funny. I built an online business selling Twitter followers. So I got people to follow each other, using PHP, built this website. And as a kid, I was making, like, $500 a day. Really? And and that's what hooked me to business. Was this, like, a like, a farm of sorts? Or was this all human beings following each other? All human beings. So you would join the network Okay. And you would follow everybody who came before you. And then whoever joined after you would follow you, and it was this this little train that you got on. Interesting. Interesting. And were they making any money as well? They were not making money. They they were just trying to promote themselves. They wanted more followers. So I said, hey. You you could join this network, and if you pay extra, you'll get more followers.

Interesting. And so how long did that did that last?

Lasted about a year, and there was a lot of learnings from that. So I I didn't appreciate the success. It kind of happened overnight. It went viral. So I've always been a student of all these growth hacks. And, one growth hack that I used was basically to have people tweet when they joined. And by tweeting, you had all these new members who had tweet about it, and and that got a lot of exposure. So maybe in in, like, two or three weeks, it it scaled quite quickly. But I didn't appreciate the success, and, ultimately, I I didn't keep up with the business. Mhmm. So over the course of a year, I, I lost out to competitors. But that that was a lot of important learnings. I I think if you fail a customer, it's really hard to get them back once you break that trust. So I've kind of, stuck with that for the rest of my business career. Interesting. And so this was when you were in high school? I was I was in high school. So I was about 14,

15 years old. Yeah. And, what was high school like? Just your generic. I mean, for for a lot of Pakistanis, they've seen a lot of, movies in from The US. Right? Like, high school movies. Is it the same as they show in the movies? Yes. Yes. Somewhat.

So it's very clicky. So, you will probably end up in a in a group that that kind of identifies in a certain way. Like, you might have the frat frat boys or jocks in, let's say, university. But in high school, you don't really have fraternity life. So maybe my group of people was, the video gamers, and we were a little more introverted. But once I started having my own money, I was a lot more outgoing. Right. And, so that that's when I started to bloom, I guess, and be more social. And were you a a good student, or were you somewhere in the average? I you know, to be honest, I was I was somewhat in the middle. Right. Because I wasn't so excited about what I was learning in school. I was a lot more excited about what I could teach myself. Right. So that carried on into into university.

And so... Sorry. I'm cutting you off. But Sure. That that self learning, was that more practical or more, you know, built around the Internet, for example? All around the Internet. So all YouTube,

just studying blogs and following all these different channels. And and that taught me almost everything that I know today. So in university, I studied economics and marketing. Mhmm. And I I was taking this Internet marketing class, and I was maybe around, I don't know, twenty twenty, 21 years old when I'm sitting in this class, and I realized I'm not really learning anything. I had been doing business online for so long. And in this Internet marketing class, you're learning from a textbook. And the textbook maybe took a year to write, a year to get published, a year to be adopted by the school system. And maybe what you're learning is three years old. Yeah. So I thought, wow, in Internet marketing, you're a dinosaur if you're following practices from three years ago. Yeah. And I kinda got fed up, and I thought, I'm just learning so much more by doing business myself, and I I dropped out. And you were there for how many years? I was there for the equivalent of two full time years, but over the course of four years. So why do you I mean, so you were essentially doing part time college? Yes. Part part time. So instead of doing, like, five classes a week, I would do, like, two to three classes a week. But why why was that?

Because I was working. Yeah. So I Was that a financial constraint, or was that more of a I wanna have a practical experience,

you know, while working? My own businesses. I had different online businesses that were already making me money. And I thought, wow. I'm I'm actually I'm already making money. I'm already learning so much more from doing it myself. And, maybe I should just spend all my time focused on business rather than learning from textbooks that don't really teach me too much. Makes sense. And so what sort of businesses were were these at the time? There's too many too many to count. I was involved in men's skincare. Okay. I had, a business selling windshield wipers, so automotive aftermarket parts aftermarket automotive parts. I tried to build two real estate technologies. One was privately acquired. And then, ultimately, fast forward to my last startup before Sadape. It was kind of like Uber for gas. So in The United States, everybody parks their car outside their house. Right. And we had an app where you could request gas, and a fuel truck would come to your house overnight while you're sleeping. The company was called Gas Ninjas. So we'd sneak by your car, we'd fill up your your tank of gas, and then we'd be out. And in the morning, you'd wake up to a full tank and not have to go to the gas station anymore. Just build the credit card connected with the app? Yeah. So you'd you'd add your card. You'd have automatic, payments being processed. So it's kind of like a a seamless invisible transaction to the user. And that was my I had I had experience in payments for a while, through those businesses, accepting card payments. But, yeah, the this this one was kind of interesting. It started as consumer focused and and then pivoted towards business to business focused, like large distributed fleets. Think of, like, police cars. These policemen would take their cars home every night. Or the elevator technician or the air conditioning technician, they would take their vehicles home every night,

and we would service fleets and, you know, fuel all those vehicles while they're in the person's driveway. Interesting. And so they have to go back to, like, a central lot in the morning. They could go straight to their their jobs in that area. Makes sense. Makes sense. And, obviously, because it's b to b, there's more premium available there as well in terms of Yeah. You know? Okay. So and and There was a lot more money to be made. Yeah. And so the the first couple of business that you mentioned were essentially exclusively ecommerce businesses where you were doing, like, media buying and selling these products to targeted, consumers? Sure. Sure. A a lot of ecommerce,

dropshipping, built a few different products, software as a service. But but Gas Ninjas was was, like, the the most full product, and, eventually, that company got acquired. Right. So we sold the business to our main competitor over in Silicon Valley, and that was in the end of twenty seventeen. So after that, I I decided to take a break. And I thought I'm gonna do a little mini retirement and and see where else I can explore. So I I left The United States, moved to Asia. Right. And I was living in Indonesia for about two and a half years. And and that's where I got the exposure to the super apps of Asia. And particularly in Indonesia, there was a company called Gojek. And Gojek, you can imagine, has, like, the cream of Asia. Instead of driving cars, these captains, I forget what they would call them. They would call them Gojeks, actually. So I I think that meant someone who would go get your stuff for you. Right. So they'd pick you up on a bike, kind of like Bikea. Right. And that matured into a super app where you had you had payments, you had food delivery, you had someone someone could come and, I think, give you a massage. There's all these different features that Gojek had. And, ultimately, they went public in, the beginning of this this year for about $38,000,000,000. Wow. And it's a of my life every day. That's energy. And I met a lot a lot of people from the Gojack team, and that kinda took us to where we are now. And these these, you know, Gojack is essentially servicing Indonesia only, or is it, in multiple countries across Pacific Asia? All over Southeast Asia. But it started in Indonesia, and it was one of the the first most important unicorns in in Indonesia. Interesting. And so,

before you actually moved to Asia, the the the last order that you sold, was that at a good multiple? So were you able to make some like, what was the idea?

Okay. We didn't raise any venture capital. Right. So when you raise venture capital, then those investors will have expectations for what you would sell the business for, and they will get part of the proceeds of that sale. So it's just myself and my cofounder. And we we had put up the initial money, and, the proceeds just went to us as opposed to having to be split amongst many other people. And so the app infrastructure and all of those things were built by your cofounder? It was myself, my cofounder, and then we had about 20 employees. Okay. So you're you, at this point in time, you'd become sort of an engineer as well? Well, you know, I I wasn't so much doing software engineering at that point. But I think the technical background helped me keep up. Right. Helped me think of things that we could potentially do in the future by, putting these things together. You understand what's maybe possible.

So would you say you were more of a product manager role rather than a software engineer? Sure. Sure. I never studied product management. Right.

But that's a big part of what I'm doing now. So instead of being more of a a software engineer, even though I I taught myself some some basic programming, I pivoted more towards product design and, growth hacking and branding. So that's where my passion is. Right.

So, yeah. And so you were in in Indonesia for two and a half years. And were you working at the time, or were you just sort of exploring?

I was exploring. I was trying to understand what I wanted to do next. So I was actually in a coworking space, so I took some space for myself. And, when I was in this coworking space, there was a Slack community for everybody in the coworking space. And one day, I look on the Slack community in the introductions channel where everybody else is introducing themselves. And I was I was thinking, oh, I'll introduce myself. But I start flipping through and scrolling through everybody who had introduced themselves, and I I saw John Shepherd. He was the CTO of Gojek's whole financial service division. I thought, wow. That's an interesting person. I'd like to meet that guy. Hey, John. So so, yeah, I I connected with John on Slack, and I asked him to come have coffee with me. Right. And this was actually right as I had discovered Pakistan, just just a few months after I I had discovered Pakistan. I had I had a friend of mine from university who was Pakistani.

Oh, so that was gonna be my next question because for most people, you know, they're looking at everywhere but Pakistan. I'll bring it back. Yeah. It's Pakistan seems like this black spot, black hole because India is booming with unicorn and Thailand and Indonesia and all of these country countries in Asia. Up until last year, Pakistan was just something that was I don't know. People saw it as a land of desert and camels or what, but for some re weird reason, it was consistently ignored. Yeah. So for you, the the way in was essentially a friend of yours who introduced you to the potential? So

I'm rather adventurous. And in university, if I had a friend from any other part of the world and they invited me to come visit them, visit their family, they'd say it kinda kinda as a joke. Like, oh, Brandon, you should come and visit me in South Korea. I thought, I'm gonna go there. Right. So, I had my friend Attik Afsal. And, I met him back in university. Hadn't seen him in many years, but he saw me on Instagram and he said, Brandon, you're on my side of the world. Now you should come visit Pakistan. And I thought, wow. That's a really cool idea. So I visited, and, that was the end of twenty eighteen when I came for the first time. And I I to be very honest, I had that same impression you you just described where, you know, the West is really not so educated on on what Pakistan is really like. So when I landed, I saw, wow. This is not so different. I had been to a bunch of other emerging markets. And, when I started to learn more and more about Pakistan, thought, wow, this is a really big opportunity. And it was around the same time that I was thinking about fintech. So, essentially, I I had started studying the market, and I learned that the banks in Pakistan have some of the highest pretax profit margins in the whole world. I thought that was crazy. On the other side, Pakistan has the lowest private sector credit to GDP ratio out of all the emerging markets, and it flips between number one and number two worst. So banks make a lot of money, but they're not lending. And I was very curious about that. And there was this huge population of young people, so many of whom are already using smartphones. A million smartphones actually coming online every month. Very good access to three g and four g connectivity. And on paper, Pakistan was really impressive. And you can compare it to a peer market like Nigeria. Right. So I I was looking at Nigeria, and in 2018, they received about $600,000,000 in venture capital. Back in 2018, most of that went into fintech. And I thought, wow. All these smart people are investing in emerging markets. They're investing in a place like Nigeria. And when you compare Nigeria to Pakistan, Pakistan, I think, only had about $10,000,000 in venture capital come into the country in 2018. So I thought, wow, that's disproportional because Pakistan has a bigger population, a bigger middle class, more people using smartphones, better access to Internet, faster Internet. And, actually, I think about 30%, less than 30% of adults in Nigeria have an identity card. Did you know Less than 30%. Less than 30. And did you know that in Pakistan, I think it's over 90 or 93% of adults not only have an ID card, but they have a biometric identity. And in financial services, you need to know who your customer is. It's called KYC. It's a big deal. Yeah. Yeah. Anti money laundering, counterterrorism financing. That's very important. You need identity. So I was I was I was so surprised. So I I started digging in more and more, and every I would come month after month. I'd come for a few days. I'd come for a week, two weeks. And, finally, after a year visiting, I thought I want to do do something in this market. So when I was speaking to John on that day when we had coffee, I thought maybe John could join as an adviser. Look at his resume. This guy was running a multibillion dollar company, engineering at a multibillion dollar company, specifically in financial services. This was around the time that I think we were about to apply for the license that had just come out by the State Bank of Pakistan. I thought he would look really good on that license application. John had advised for about a year, And over the course of that year, he was starting to see more and more of the potential because when John was in Indonesia, he saw Indonesia go from all cash to all digital. Maybe in the period of, like, five years. Everybody in Indonesia is paying for everything with a with a phone and a and a QR code. Everyone. Almost everyone. It feels like everyone. Mean, it happened Toriya. Go ahead. Yes. No. No. You you go ahead. This happened in China. Right? It took maybe twenty years for that to happen in China, maybe fifteen years for that to happen in in in India. Then you have Indonesia and all these other countries, and it keeps happening faster and faster with each cycle in each country. So now in Pakistan, you have ubiquitous access to Internet and smartphones, and they're getting cheaper and cheaper. So the pace of digitization in each of these markets is going faster and faster. So when John saw all that happening in Indonesia, and he realized what we were working on in Pakistan, he had joined Gojak when it was already pretty big. And he thought, wow. It would be interesting to work with Brandon to start from the very beginning and build something right at the precipice of this maybe that's not the right word, but right at the beginning of of this huge revolution that's about to happen in Pakistan, this huge payments revolution.

Right.

So I kept poking him kept poking him, finally he decided to join. So now John is our CTO. Oh, really? Yes. From Gojack to to Satape. He left a company worth tens of billions of dollars to join Satape. Oh, wow. And Hopefully, you can meet him one day. Maybe bring him on the podcast. Where is he based out of? He's he's actually, now he's in Karachi, but he travels around a lot. So he's in Pakistan? He's in Pakistan, not based here full time because now he's managing an engineering team at Sarapei across nine time zones. So Sarapei goes all the way from The UK, nine or 10 time zones later down to Australia. So he bounces around a And how many how many employees do you have at this point in time? About 250 employees. And About 65 are in product and engineering. Do you have any,

publicly shared information on your funding?

We've raised a total of 20,000,000 US dollars to date from mostly US and and UK investors. And that's,

up until seed?

That's up until seed. Yeah. We did a seed, and then we did, like, a seed Plus. Yeah. Seed plus. Yeah. Interesting. When when when we did our seed funding in, '20 was it 2019, 2020? We closed about 7,200,000. Until that date, I think it was, like, 9 point something that we had closed. And then, this year, the investors had seen all of our progress, and they thought, wow. This is going really well. So they invested a lot more money Mhmm. At a much nicer valuation, and it was really hard to say no to that.

Interesting. And so you guys have been have been at it for a while. When was the Rafficially launched as a startup?

Well, I came here the first time in September 2018. For about a year, I was understanding the market, meeting as many people as possible, connecting with everybody on LinkedIn. Quickly on that, I believe every time you connect with someone, you meet someone, that's an opportunity to get lucky. I think you can create your own luck, and it's just like a probability. If you increase the probability, if you increase the surface area, the number of times you could potentially get lucky, you will be more lucky. So that's how I met the rest of the people who joined our team. So our CFO, Tessir Ali, our chief operating officer, Omar Salimullah, and then our chief compliance and risk officer, Abdul Kadir Sultan. I call him AQ because I I butcher the name sometimes. But they are, you know, veteran bankers with, you know, extremely strong backgrounds. And and and when did you guys apply for the SBP? So we applied I don't remember the exact date, but it took about two years. It took some time to to prepare the application. Once it was prepared and accepted, the state bank reviews it and then gives you an in principal approval or NOC. Right. And from that date, it took two years on the dot. Nearly to the dot, but twenty four months. So the EMI license in The UK takes about three months to get. So I thought that's what I was getting myself into when we applied for this license in Pakistan. Maybe six months, maybe nine months, but Took two years. Took a while. Yeah. And now you guys had the license? Yeah. The commercial license was approved back in, the end I think it was the end of April of this year, and then we had our commercial rollout start in May of this year. And is there any estimate of the amount of people who are actively using Sadapreno? Oh, we don't publish that. Right. But it is hundreds of thousands. Okay. So it's in six figures? It's yeah. Yes.

And, I'm I'm gonna shoot shoot some of the more simpler questions on the get go. Sure. Why do you keep people why do gatekeep who who joins? Why are we keeping them weighted? Yes. I get that a lot.

The the waitlist has kind of become, like, a cultural phenomenon here in Pakistan.

Almost everybody's heard about it. Almost everybody's on it. Are you did did you? I did put myself in, and I did get in because I knew someone who knew someone, and, you know, I got in when you guys had one of those early, I think, 02/2000 or or one of those. We got in early. Yeah. I got in early. Awesome. So, yeah, essentially,

while we were applying for the license, this funny thing started to happen where people started hearing about us, and they went to our website. And we just had a email sign up form, and they would sign up. And then people started asking, like, hey. When are we gonna get our account? Because we just put a a landing page together to show what we were going to build. Right. It wasn't even built yet. So people kept bugging us. Hey. When when when can we use this? And, actually, the the the biggest limiting factor was getting the license approved Right. Before we could actually roll out because it's a regulated space. You need a license to take deposits and and serve people in financial services. We didn't know what the answer would be if someone asked us. So we thought, hey. Why don't we just put everybody on a waiting list, and we'll show them their their position on the waiting list. And when they get to zero, they'll get their account. And I had a fun idea. Why don't we let people invite their friends? And if they do that, we will reward them by letting them skip the line. Right. So it's sort of like how Gmail sort of started. If Sure. In a way. Yeah. Yeah. So I I had basically studied all of these growth hacks from around the world. And I thought, wow. This would be fun to do in Pakistan. Let's see what happens. Well over a million people had signed up pretty much just because of this growth hack. So people would invite their friends to skip ahead, and they would tell everybody because they really wanted this account fast. By the time we got our license approved in in April of this year, there's over 500,000 people who had signed up. Actually, the Play Store numbers of of downloads don't show the total number of downloads if you look at our Play Store listing today because we we we now have a new Play Store app. The old one, which was the old waitlist, which I helped build myself, it was really bad, full of bugs. I'm sorry if you had problems with the old app. We deleted that, so that had a bunch of downloads. The waitlist helped us to make sure we could always deliver a very high level of service. So imagine when we got our commercial license, there was already 500,000 people who signed up. Imagine the technical and operational challenge of trying to onboard 500,000 people in one day. Imagine trying to deliver 500,000 debit cards in one day. Our whole team would probably quit within that week because it would be so stressful. So the waitlist, essentially protected us. We could onboard, as many people as we could serve well every day Right. Every week moving forward. So that allowed us to scale our team, scale our operations to support so many people who've already signed up. So there's still a waiting list. And it's, still in the hundreds of thousands. It might have dipped under 200,000, but there's more people signing up every day. So it's, you know, we're doing our best to work through the waiting list. What's the vision here? I mean, you you earlier mentioned

super apps in in, you know, I hate that word. Yeah. I'll tell you why. And and then and then you mentioned fintech and financial services and, you know, so what's the what's the real vision with Sadape? It's not a super app. I'll tell you that.

The reason why I don't like the idea of super app is because people get confused about this idea of being able to build a super app on day one and launch it. The soup the real super apps like WeChat and Alipay and Gojek, it took, a decade to become a real super app. And when you do so many things at the same time, it's really hard to do them all really well at the same time. So our vision is to be extremely focused. We wanna do just a few things at a time, and we wanna make sure that those things that we do, we do them really, really well. So we live very much by the name SADA. We like to keep everything as SADA. Whenever we build something, we ask ourselves, is it SADA? Is it simple? You can imagine the app, the wallet, as a distribution channel. So we wanna get as many people to use SADA pay, this wallet, as possible, and take this distribution channel to scale. And as it goes to scale and has millions of users, then you can cross sell different products and services and and deliver value to to users. So today, you can see the app. We've been operation commercially live, operational for about five, six months. We've had a lot of growing pains just trying to keep up with all the demands. We're just trying to make sure we can keep the lights on and everything's stable, we deliver a great service. Now over the next months, you'll see a lot of cool new things come out. The first few months, we just wanted to make sure everything was stable. Now all the fun stuff begins. So I think the way we wanna innovate is to see how we can distill the complexity of financial services into something that's really, really, really so simple anybody can use it. And we've started first with this, you know, tech savvy middle income demographic because I believe, I strongly believe it's it's much smarter and much more sustainable to go from the middle down and serve everybody else. It's really hard to go from the bottom and then work your way back up. Right. And the reason why is because if you are serving the low income demographic and financial services, it's really hard to make money because the margins are so slim. The wallet size per customer is very small. They're really risk averse to trying new things with their money. And, ultimately, as a startup, you're you're trying to climb this mountain to get to profitability. Right? So if you make so much less per customer, you have to have huge economies of scale. You have to have millions and millions and millions of customers before you can turn any profit. So as a startup, you're you're burning a lot of capital to get to that point, and it's not sustainable. We try to be a lot more sustainable, a lot more efficient with with how we grow and how we serve customers. So we started with the middle income demographic because that's where you can actually make money, and that's where you can turn a profit much sooner. We found a demographic who really gets excited about the proposition that we have. We spend no money on marketing. We don't run any Facebook ads. If you've seen a Facebook ad, it's only because we're doing some testing and and learning. We don't pay anybody for referrals. We don't give out free Zingerburgers. Maybe, EasyPass has spent billions of rupees on free Zingerburgers. And because of that, our growth is a lot more sustainable. Other startups have potentially put themselves in a really compromising position because they've spent so much money on customer acquisition in an unsustainable way. And we've been really, really careful not to do that. So we focus on how can the product grow itself? How how can the product be so good that we encourage people to share it? That it's a delightful experience people wanna talk about. So that's what we've built, focusing on product led growth, spend no money on marketing. And instead of spending money on marketing, you know what we do? We just invest it into the experience, into the call center, into the support team. So when you interact with Sadape, it's kind of like talking to a friend. You will get emojis in return. You'll get GIFs in return when you're talking to us. And that is so different, so refreshing. Because if you speak to a a bank representative, like a a support representative at some big bank, it'll take you a long time to talk to them. They're very dry. They don't really care about you. And when you talk to us, it's probably because you have some issue with your money, and that's a very stressful moment for you. And if we can really be there for you in the moment of need, support you well, and you feel like we really care about you, that is so different than from what you've ever potentially experienced before with a financial institution that you're probably gonna tell your friend about it. It's really, really remarkable. So instead of investing in marketing, we've invested in the experience. And that word-of-mouth has driven our whole business to to where it is today. And I think we'll continue to be able to do that for a pretty long time. Makes sense.

If I were to ask you and and and there would probably be two two two questions here. But first, you talk about the user experience, and you're you, you know, you're really putting that effort into the engineering of the product and the simplicity of the product. But then, obviously, because you're a financial service, you are dependent on the on the sort of the rails that, the current ecosystem has available. Right? And, in Pakistan, unfortunately, and we've seen that with other banks as well, bigger banks as well, you know, the apps go down. It doesn't happen anywhere else in the world, but I'd open a bank, app, and it would take even in the on the fastest fastest of Internet, it would take ten, fifteen seconds to just load. Yeah. Then if I were to transfer a payment, it keeps on, you know, sort of rotating the bubble. There's no real I don't I never really know whether the money has been, you know, transferred or not. Sometimes the money gets transferred. It's deducted from my account, and then, you know, you're following a long trail of, getting your money back, it's quite problematic. And and we saw some issues like that with Sadape as well, on Voice of Customer. I saw on the Facebook group, and I I saw that you were very active, you know, trying to solve those. Yeah. But I do also understand that in terms of when you're really scaling, and we're talking about 10,000,000 customers, that's not sustainable. Right? Like, you can't be sitting there solving all of those problems. So the first thing I'd like to understand is, how do you ensure that the the quality of service in terms of the actual product, which is money being transferred or money being used in whatever way, is actually substantially better considering it is inherently being, you know, supported by the same rails. Right. And second of all, do you think Rust somehow helps you or will help you in the future, changing that user experience that currently exists? Because you mentioned EasyPass, and you mentioned a lot of these other companies. They they spend a lot of money on marketing. Yeah. But in my experience, it's always the user experience that's really been missing. Right? Like, you can spend all the money on marketing. But if I'm there and I'm trying to send money and there are some sort of stupid problems, the app is telling me one thing, but actually something else is going on, or I actually didn't get enough trans look. There's a limit for transactions, but somehow I'm within the limit. The app shows me I'm within the limit, but someone's transferring money to me, and then suddenly there's a pop up. You know, the limit is has exceeded. So Yeah. Something is going wrong somewhere, and it seems like they don't really care. For a lot of these bigger companies, their tech is essentially outsourced to third party, you know, consultants. That's it. And so it I understand they're not the ones who who might be able to solve this problem. So so how do you, so, yeah, first, how do you reconcile with the rate current rails, and how does that affect that? Sure.

So you you hit it with the last point you mentioned. Banks do not do not build their own technology. They might build a little bit, like, connectivity tissue between systems, but they're so reliant on vendors. And their tech teams, I don't wanna say are are weak, but they're not as strong as they should be for something so important. Right? And that is our core competency. So John's core competency, incredible engineering. So even though we are reliant on these third party systems, the payment rails, the banks themselves, Zatapay is pretty much always online. Our success rate for transfers is, like, 99.98. And that last point 02% is usually because something else happened with someone it's not a side of pay system that went down. So we build a lot of redundancy into our processes. But, ultimately, we're still reliant on that that banking switch. There's a few hops for money to actually get transferred. So the maybe there's a banking switch or the connectivity between the switch and the bank and the bank itself. So the bank could go down. The connectivity layer between the bank and the switch could go down itself. The switch could go down itself. The connectivity between the switch and us could go down. It's not our connectivity. It's someone it's a third party that provides it to us. So even though all of these other things could potentially go down, we spend a lot of time trying to figure out how we can create redundancies so that even if there's anything that fails along the way, we can continue to retry things so that seamless to the user, money will always make it through. So we spend a lot of time on that. So these, yeah, these 30 part third party systems, and when they go down, it causes a lot of frustration for for potential customers or customers of ours. And we understand that this is a stressful moment when money disappears into the nether. How can we really pay attention to that and proactively try and find it? Oftentimes, if this happens with a bank, they're not gonna proactively do anything for you. You'll probably have to check your statement and reach out to the bank and be very vigilant about that dispute process and chasing them down. So we try to turn that on its head and see if we can be more proactive. If we if we find any money is missing, we're on top of it, I I say, like, white on rice. So that that that's a bit of a differentiator for us. And and the time that you mentioned, With a bank, they're reliant on so many systems, and they have such, so many systems that are so siloed and and not very efficient, and they could be ten, twenty, thirty years old. So you might open an a legacy banking app, and it takes, twenty seconds to load. For a millennial or Gen Z, we think in milliseconds. Right? If a webpage takes two or three seconds too long to load, you're gonna get frustrated. Right? And imagine the same thing happens with your banking app. So when people try Sadapay, it opens really quick. When you send a transfer, it feels like it's almost instant, and that's really refreshing. And that's how you hook millennials and Gen Z with with the speed and and attention to detail there. But but there's, a light at the end of the tunnel for these third party systems and the payment rails. The State Bank has worked really, really hard on this new payment mechanism called RAST. So all of the financial institutions, all of the fintechs will be able to plug into RAST, and it's an instant payment rail. The money either goes through or it doesn't. Within twenty seconds, you have finality, so it doesn't disappear into the nether. Theoretically, it should never happen. So if you try to make a transfer within twenty seconds, you will know if that has actually gone through to the final recipient or not. With the existing rail, it doesn't really work like that. It might get deducted from your bank account, and then it's it tries a few times because there's some redundancy that's been built in, but not not in a modern way. And then, ultimately, it could just disappear for a little bit. But, usually, if you try hard enough, you'll find it.

So, yeah, I think RAST will will be a big deal for Pakistan. But we've been hearing about Rust, and and and it will be a big deal for Pakistan, but we haven't really seen anything substantial. I mean, we have seen banking apps start popping up these sort of, you know, notifications saying, come on, Rust, or make a Rust payment. But it seems like it's all being done separately from your current system. It's rather than, you know, just sort of one day switching the current system to I mean, it doesn't make sense for us to There's a bit of conflict of interest.

Okay. The the reason why I say this is what I've observed is that banks, they had a lot of expenses. Right? They need to pay for their bills. They have thousands of bank branches and thousands of people that sit in the bank branches and have to move paper around, so it's very expensive to run a bank. So they need to charge fees, and banks will try to charge fees for everything, especially your bank transfers. With Rust, you're not allowed to charge fees. So it almost feels like, me as an observer in the payments ecosystem, it almost it almost feels like some of these banks don't really want to promote Rost as much, maybe because they're not allowed to charge for it. But the old system, you could still charge a fee. Right? So maybe they're still clinging on to that last bit of revenue, not realizing that by getting everybody onto Rust, a much better system, something that will actually be much better for the whole ecosystem, that will increase the size of the pie. Maybe people today aren't really so happy with digital payments. I think, oh, I can hand you a rupee. It doesn't cost me anything. So maybe I just give you cash instead of send a digital transfer because maybe there's a risk that my money disappears into the nether for some reason. Right. But with Rust, it's actually it's free. It's instant. It's so simple. Your account number becomes your phone number, or you can have an alias like a username or your email. So we've seen in other markets around the world where you have this kind of instant payment rail. You you get such fast adoption, whether it was in Brazil or or India with UPI. RAST for Pakistan will be a really big deal. I think the central bank will maybe need to urge the banks a little bit more. But But it's gonna happen sooner sooner than later. Yeah. It's been mandated. So every bank has to connect. Every fintech has to connect. So, we're almost there. We're almost connected as well. We were a little late to the party because our license got approved later than everybody else. But, ultimately, I have I have a tremendous amount of faith in what Rast will do and then maybe even QR codes. You you talked about legacy digital payment systems like EasyPass and JazzCash.

If I were to compare the more recent additions like Neape and a bunch of others, I mean, I feel like, you know, these days you pick up a rock and there's a new fintech. But, if you were to compare yourself with them, how would you differentiate? And how would you say maybe... I mean, is it just like, you know, you're the same and it's just a race, or do you think there's something that you're doing fundamentally different Yeah. That helps you, outshine?

I think you can consider our focus and attention to detail as being a big differentiator. So the service we deliver will always be good. Hopefully, great. Then other fintechs, I I feel as if they're getting a little distracted. They're trying to do too many things at the same time, and more features doesn't necessarily equate to better experience. Right. When we look at more features, we look at more things we have to maintain and make sure they're really good. So I think we're gonna be very focused on a few areas of business. These other fintechs are gonna be focused on different areas of business. And I can describe it by giving an example of how certain kinds of customers will be served better by certain kinds of financial institutions. If you're a small farmer, you're going to probably work with a microfinance bank that's close to your area that that understands the kind of business that you have and can help you with your your financing for your your, your your your goods that you need. Right. If you are a young tech savvy millennial, Gen Z millennial, then you'll probably want to use one of these fintech apps. And Zarapay will serve certain kinds of pain points for these people. We will lean more towards international payments where others might lean more towards serving local merchants. So you can see NYPE is doing some really cool things around, enabling merchants to accept payments and have apps within their app. So they're going in a bit of, a different direction than us. We love the idea of serving freelancers really well, helping them accept international payments. I was a freelancer. I have over 8,000 orders on my own Fiverr account. So I I learned a lot about their pain points. Remittances. Sadape will launch the lowest cost exchange rate in the world for rupees. Bringing rupees in, I think, will be great for the country from freelancers and remittances. Right. There's other ways that we can, extend credit to people, maybe with zero interest. If you think about a bank, they have such high costs to deliver financial services. We've gotten rid of all that stuff. We don't have to pay for the bank branches or the people to sit in them or the manual processes. We're very lean on new modern technology. So our cost to deliver financial services has come down to the point where it's so low, we can offer a lot for free or at a better rate than anybody else. So we could potentially extend credit at a lower rate than any of the banks that exist today and to people who banks would never even lend to. Right? Insurance is really interesting as well. Micro insurance, insurance for your cell phone or ecommerce insurance. You buy something, it doesn't show up. You buy something, it's broken. You buy something, it's not what you ordered. Ecommerce insurance, that that's kind of, like, included with maybe the the credit card you got from Sadapay. And that will cover you whenever you buy something online, and the the filing process will be SATA. We promise. Right? So when we extend insurance products, because we have so much more data than any other institution, we can be more effective at underwriting our customers and have a lower premium. All of our costs are lower. So moving forward, we we build and scale this distribution channel. And all the other products and services that we could potentially launch, we're basically just gonna come in and launch a better product at a lower price point or potentially free. Right. So anything a bank could do, we could potentially do. Right. If I were to ask you, how does one buy into

SaaDapay? Does one has to transfer through a bank?

Yeah. So you you could transfer from your existing account. Right. There's a cool thing that you could do with Bykia. Bykia will send a rider to your house so you can deposit cash. What are the charges for that? Off the top of my head, I don't I don't actually remember. Is there, like, a percentage, or is this, like, a lump sum fee? I remember it was free at one point. Could be, like, 20 or 50 rupees. But Okay. In our app, it says so somewhere.

You can receive an opportunity to just sort of give your cash to to a rider and Give cash.

Technically, I think you can go to an EasyPes agent, and they're enabled to send over the counter bank transfers to Sadapay. Okay. It costs money. We don't really promote it. And the EasyPes agent doesn't really understand it. Right. They don't really know that this feature is available. But I like I like the opportunity for these, these NADRA agents. So NADRA made a really, really cool partnership with OneLink. Okay. And now they're going to enable all these NADRA e Sahulat agents, there's, like, 10,000 of them, to be cash in agents for the ecosystem. Okay. And, hopefully, it'll be at a at a very good rate, and that will help digitize more of the cash. But most of the people using Sadapay are receiving money already from some digital channel. Freelancers might receive it from their, from Fiverr and Upwork. You have people receiving remittances from, like, TransferWise and WorldRemit and these other companies. When you open a SataPay account, you get an international bank account number, an IBAN. Right. So that that lets you receive international payments.

What are the limits on your on the accounts right now?

Today, the limits are 200,000 rupees per month. Okay. That's if you have a biometrically verified account. The State Bank... Don't I know if I'm allowed to say this, but I'm gonna say it anyway. State Bank has released draft regulations, so I'm sure some people have heard about them, to increase the limits for EMIs. Okay. And it might end up that the the limits are increased to maybe 500,000. Okay. And then you'll have certain types of transactions that could be, exempted from the limits, like, let's say, salary, as an example. You could think of an EMI wallet as a lower limit account that's a lot less risk for the central bank or for a financial institution. So it's a lot easier to get the account. You have less requirements when you sign up. You can sign up instantly from from your phone. And then you have bank accounts. So bank accounts will require a lot more information, salary verification, maybe your your mailing address verification, etcetera. And then you get a a bank account with a traditional bank and traditional user experience. Do you think you're ever going to apply for a for a full time,

you know, bank account license? We did.

So we did apply for the digital bank license. And it's really interesting to look at how fintechs around the world have evolved. There's many different directions. You could go for the digital banking license. Mhmm. You could work with bank partners where the EMI or the fintech becomes the distribution channel, and then you work with banks to, distribute those products. So there's there's different paths to becoming this sort of full stack financial institution. The central bank hasn't approved any or the central bank hasn't issued any NOCs for the digital bank license. It's very interesting

for a fintech to mature into having a digital banking license. It's still in the process. We might be able to see that sometime in the future. Yeah. Yeah. It's interesting because,

on one hand, you get all the benefits of being a digital bank. On the other hand, it brings in a lot of bureaucracy and added controls and complexity to your operations. It requires a lot of maturity. So certain fintechs may not be ready to become a full stack bank, or commercial bank with that commercial license. The license that we have now, the EMI license, it's really appropriate for a fintech. You keep a lot of agility. It's a lot less expensive to run because you have a lot fewer requirements for compliance in government governments.

So, Khuram recently invested a lot of money into, you know, one of these new startups by, I believe, Khuram Jamali is, heading that. And, you know, Tanya, was instrumented in that as well. So tell me a little bit about, what that is. And is that, you know, is that a potential about it. Is that a bank? Is that a, you know, fintech play? Because I I believe it's it already exists somewhere in Africa, and they're sort of implementing

the same model. I'm not sure. But, essentially, the license doesn't guarantee success. Okay? First, you have to have a a great team who can build a great product. Right. A product can serve different kinds of customers, different use cases, different businesses. Right? So just because someone gets a bank license doesn't necessarily mean they take over the whole country. But I think it is good that there are more players coming to Pakistan who are going to compete for this market. More competition leads to better service for consumers. Right? Right. And I think the State Bank has has real realized this, and they're kind of putting a little bit of a fire under the banks to really push them to go digital because they've already been so profitable from not really doing much. So I know that that bank has gotten a license. Is there any other bank who's gotten a license as well for digital digital bank? No one's gotten a digital bank license. No one's gotten a Not even the NOC. Nothing has been done yet. So is everybody still waiting on Everybody's still waiting. And it it'll it'll be a a long time, I think. The EMI license takes two years to get approved. The digital bank license is is a is a big deal. Right? I would think it would take at least two years to go through that same process again. And then you have a phased rollout where in year one, you're capped to a certain amount. In year two, you could do a little bit more. In year three, you could do more after that. Makes sense.

You you earlier talked about, you know, create creating a a cashless society, and we've been hearing that from sort of these telecom marketing companies, for over ten years, you know, just setting the dream of WeChat and, you know, Alipay and so on. And Alipay, you know, spent a substantial amount of money with EasyPassas. Well, but somehow in Pakistan, it's just not happening. Do you think there's a there's a cultural problem? Do you think there was a the way that the problem was approached? And lastly, do you think do you really see you or or some of these newer newer folks be able to create, maybe a 60 to 70% cashless system cashless system within the next three years, at least in KLI?

Well, you're gonna ask me, and I'm I'm definitely biased. I I think yes. In all the other countries that I've studied, you need the right timing. You need the right foundational building blocks Mhmm. For this to actually happen. There's a tipping point where it just it just accelerates, and then it takes over. Like John would describe, in Indonesia, it probably took, like, five years for this to go from all cash to all digital. Now in Pakistan, you finally have this free interbank payment rail. You have fintechs that have a license that lets them stand on them on their own. You have people who have an increasing preference for digital payments, these young people. And now, I think, you're gonna start seeing these young people go to places and demand digital. So it all starts with, I I think in Pakistan, it's starting with this young demographic of people who wanna shop online. They wanna buy a Netflix subscription. They wanna buy games and apps on the on the App Store. And they need some sort of, digital payment method. They need a a card or a virtual card like Sadapay gives you. And that lets them start getting into digital payments. And then they're starting to send money between each other, wallet to wallet or wallet to bank or bank to bank. And as you start using more and more digital payments, you realize, us, it's just better. And then these young people will go, and they'll demand digital. And I say this by giving this example of, like, chacha number one and chacha number two. So chacha number one has his kittyana store on this side of the street, and chacha number two is selling the same thing in his kittyana store on the other side of the street. Now chacha number one is cash only. Millennial or Gen Z goes to chacha number one, tries to buy whatever they're trying to buy, and gets rejected when they try to pay digitally. So that young person will go right across the street to Chacha number two who just started accepting digital payments. And they'll buy whatever they wanted and be out on on their way in in in seconds. Chacha number one is not stupid. Is it worse to pay taxes and be documented, or is it worse to lose business to your competitors in the area? Right? So everywhere else around the world, this is how it's happened. You have young people who will have an increasing preference for digital payments, and they will go to these small retailers, and they will try to pay with digital. And these these small businessmen and women will realize, oh, our customers want this. And, oh, okay. It doesn't cost me anything anymore to accept a digital payment. Okay. That's interesting. I'll try it. And they try it, and they realize it's better. And then it starts to pick up this momentum like a flywheel until it just kind of takes over. So you think you you're gonna have a merchant,

sort of an account as well for for, let's say, chacha number two who, you know, wants to go digital and wants that QR code firstly. And secondly, I think one of the major problems that I see in Pakistan is, you with every store who try to, at least in the in the start, go digital a little bit, they had to put up, like, 10 different QRs because every every millennial was coming and demanding a new fintech app. Right? And, do you think because India with UPI really sort of centralized that entire thing. And so do you think I I was hearing about one QR or something of that sort at some point in time. Tell me a little bit about the merchant ecosystem and how you see that evolving over time, really to become this sort of a fluid user experience that right now, to be very honest, I don't see. And I see that as a major deterrent, because it's so confusing for your most of these retailers, unfortunately, even though your demographic is sort of this middle income, comparatively educated, you know, global, exposure. You know, they have the global exposure as well. But these retailers are mostly uneducated. They don't, you know, they don't go for for anything that is different from what their fathers were doing or what the market is doing, and so you really have to simplify it for them.

It it may sound naive, but I disagree. And there's also some proof from other startups that are doing great things in the ecosystem. You see Bazaar, DestaGear, Retailer, Tajra, etcetera. They're digitizing the supply chain for merchants, and they're starting to use apps and katas to keep track of the money that people owe them. Fintech will come to these merchants. They're already getting used to the means of interacting with a smartphone and recording transactions or ordering their supplies. So the next step is accepting digital payments, and it will happen. I promise. I'll bet you. Okay. But I think I think, essentially, what we saw in India was exactly what you described. You had a merchant who would have 15 different QR codes on on the front of his stall, and each QR code would go to each fintech app. And it was ridiculous. It got out of hand. And the central bank over in India actually decided, you know what? We're done with this. There's going to be one specification for an interoperable QR code, and everybody's gonna have to start using this QR code. So whether you're paying with PhonePe or this pay or that pay, that merchant just needs one QR code, and they can accept payments from everybody. Right. That just happened in Pakistan. The regulations came out three or four months ago. Right. So now if any financial institution is gonna do a QR code in Pakistan, it's going to be interoperable. RAST is interoperable payments. Now you have interoperable QR codes that will launch. And now you have all these fintechs that want to get into the merchant space to allow these small businesses to accept digital payments, whether it's with a credit card or a debit card or a QR code. And this will only go faster and faster. This merchant who before might have been scared of it now is going to be more incentivized because it doesn't cost money anymore. Previously, maybe it costs money to accept digital payments or to accept a QR code. Now you can potentially accept a a a RAS payment over QR, and that will be free. So just to confirm, the merchant could have, let's say, a merchant account with SaaDapy.

And with the one QR, can essentially have any fintech app pay through that QR to your SADAPI account. Is that correct? Potentially. Yeah. So you can imagine I mean, it's it's it would also be pretty excruciating for that,

merchant if he has to have, like, five 15 different accounts and then transfer on. Yeah. The merchant will have any account. It could be a NiaPay account. It could be a SadaPay account. Right. It could be, EZPES account or an MCB bank account. And they will be able to accept a QR payment from any app into that one account that they have. They don't need to manage all these different apps. Okay. So maybe it's not a secret anymore, but Sarapay has been building something for freelancers. So we'll launch a business account for them. And we love the idea of how a a a freelancer is kind of like a business of one person. And we see the product that we build for them maybe maturing into something that works for a small business, maybe a Kidyana store. We don't know. I think we want to learn from what the ecosystem is doing. And there's so much white space, so many different opportunities in fintech. I think it would make sense for us to focus on the areas that doesn't really have much noise. Right. Because there's other businesses who are here in Pakistan or maybe coming from abroad who are planning to get into this space?

With the limit of 500,000, let's say a a freelancer and because with the with the dwindling sort of PKR rate, it's just, she's got loans where that that'll go. But, you know, if a freelancer is sending $3,000 to Pakistan, maybe a couple of years ago, that was around 500,000 and would have worked. But today, suddenly, that that's Not what it used to be. Yeah. 650,000. Right? And so that's beyond the limit. What happens? Because in Pakistan, if you're able to send it, maybe the bank is gonna pop up and say, this and, like, this is you know, you're above the limit, and it's not working out. But when it comes to international payments, a lot of times what happens is they just throw the money, and then the money gets lost somewhere in the middle, and it's very anxiety inducing because you don't even know who's gonna help me. Maybe it's somewhere in the ocean. Yes. You know? So so what happens when you actually transfer money that is beyond the limit,

and and and, you know, it's sent from from abroad, but you don't have it in your account? So we wouldn't be able to accept it. Okay. For the regulators who are listening, please understand this point.

And eventually the money will be sent back to the original,

sender? Yeah. So the way we would do it with with our payment processing, we wouldn't accept that payment to begin with. So it wouldn't have it wouldn't have left wherever it came from because we don't want it to get stuck. Today, the EMIs have certain limits, and I think the central bank is realizing that there are use cases that are important to the country and to consumers, and they will need to modify the regulations to support them. So it seems as if it's working first for the consumer wallet limits, and then potentially the merchant wallet limits will will need to be modified because not just for freelancers, but even for these these Kidiana stores. Like, 500,000 rupees doesn't really take you very far. Their turnover turnover could be, like, 1,000,000 rupees. Right? Yeah. Yeah. Yeah. So, they they would argue or someone would argue, well, how much of that is going to be digital? So, yeah, I think today the limits are here, but tomorrow,

I think the limits definitely have scope to improve. One of the questions that I generally ask all of the, sort of fintech players is, how are you making your money? Because everything's free. And, you know, you you did mention sort of credit or or or microloans in the future that you could potentially give. And, obviously, you go you got that data that you're going to potentially can use to create those profiles for for your customers as well. But first, I'd like to understand, do you not require a license for for lending? And is that essentially why you applied for the digital bank? And secondly, you know, I mean, what's the model here? Would you be able to sell potentially monetize customer profile or credit ratings in the future? How what's the vision

with with the scale? People ask that a lot. How do you make money if everything's free? So think of think of the wallet as as being the entry point. Like, I I spoke about it being the distribution channel. We give you the account for free. We don't charge you any fees for bank transfers. We give you the debit card for free. But in reality, when we give you the debit card, we get paid every time a customer spends money. Right. So if it's a Mastercard or or a PayPac, whatever scheme it is, that network is charging fees to the merchant. So if I go buy pizza, right, the pizza place is gonna get charged a a fee, and that gets distributed amongst the players in the transaction. If you pay for Food Panda, Food Panda pays a fee for processing a card transaction. So on average, we're we're getting about 1% whenever someone spends money with a debit card, depending on what kind of transaction it is. And then there's all these other things that we could potentially launch. So as we build different businesses on top of this distribution channel, if we help freelancers process international payments, there's margin there for processing the international payments. Remittance, getting into credit, etcetera. Credit does require a license, but EMIs can also be seen as a distribution channel. So we are licensed to take deposits and be a distribution for electronic money. Okay. Right? So you could partner with potential banks and You could partner with a bank. Right? So we have a lot of bank partners, and we love our bank partners.

Makes sense. In terms of your, you know, I know that you've you've got one of the one of the most interesting and and talented team, and now you're you're at 250 employees as you mentioned earlier. Some of the earlier employees that you you do got and maybe are still getting, were you offering stock options to them as well? Because in Pakistan, that was never a thing. And, I think now more and more startups are beginning to realize or at least was there a year ago. Now there's ample amount of good start talent available in the market, but that that was a different time. You know, the talent was really scarce, and and you really had to you didn't have a lot of money to to attract them, and so you had to attract them with some sort of an ownership.

So what's your model? Well, you know, we've been so generous here, and sometimes I worry that people don't really appreciate it as much. I say that because when I first came to Pakistan, I didn't I didn't really have a cofounder. So half of the company that would have gone to that cofounder, I actually decided to leave in the stock option pool. So normally when a startup has started, they will have maybe 10% of the company allocated to the stock option pool to go to employees, maybe 20%. So ours was 50%. So we were very, very generous and still are very, very generous with ownership in the company. So I think it's, like, seventy, seventy five, maybe 80% of people at Sadapay have stock options. Every offer we send includes stock, just only at the very entry level. Maybe, let's say you join the CX team. So this entry level position, you can start earning stock after six months of doing a great job with us. So that has helped us incentivize

the most incredible people to join our team. And in terms of the sort of changing global financial climate, and you we've seen a lot of layoffs. Did you guys were you laying off anyone? And are you planning on laying off anyone? No. No worries. How do you how are you looking to maneuver through this time? Because, I mean, you you did raise a second round, which was fairly, you know, it was pretty great. But what happens when you run out of this money and the next, you know, set of money is required, but the investors are really conservative right now? The markets are there's a bloodbath there. And so how are you preparing yourself for that?

I get this question a lot in interviews because people wanna join a company that's not gonna lay them off later. Yeah. We've seen a lot of companies freeze hiring, maybe lay people off, maybe shut down altogether. I think we've been quite lucky to be in a good position. We closed funding in in May of this year, just a few months ago. Also, we we follow a business model that's a lot more sustainable. As I mentioned earlier, we we don't really spend any money on customer acquisition. So other companies might have spent a lot of money on customer acquisition to try and grow as fast as they could. Maybe unsustainably giving away discounts. If if you're selling, a dollar if you're selling a dollar for 90¢, people will buy that dollar all day. If you're selling goods at a discounted price just to acquire more and more customers, that artificial growth is not sustainable. So we've been really mindful of that. Now I think if you can have a business model that is more mindful of being sustainable and has an actual path to reaching profitability, investors definitely appreciate that a lot more than they used to. If you have a business that's kind of like, you know, pie in the sky, maybe one day we'll get to profitability when we have so many users we can sell ads or do this, do that. It's gonna be really hard to raise funding. But there's another light at the end of that tunnel. So 2021 was the most exciting year for venture capital of all time, the most ever invested into startups. 2022 has been a a slow year, but actually still not too bad in comparison to 2020. US venture capital firms today are sitting on over $290,000,000,000 of uninvested tri powder. That's what they call it. And that money will have to be let out at some point. So it seems as if globally, there's a lot of uncertainty macroeconomically, and investors are waiting to find some macro clarity. But eventually, that money will will come to market again. So I'm actually really optimistic about 2023. So if you do have a strong business and you do have a visible path or a line of sight to profitability, investors will be very excited about you. But I think you have to be really careful. Like, if you're considering joining a start up that has this, you know, very strange business model where they're spending so much money to acquire customers, I'd I'd be wary of that. Yeah. It makes sense.

For a lot of people who are in the banking sector, you you earlier mentioned, know, banks have a crazy amount of profitability in Pakistan. More often than not, they're really relying on the deposits. Right? And they're saying, okay. So you let's say, if I were to really actuarial signs out of it, you know, I'd what I'd do is I'd take all of my accounts, and I would run it for a year. And I would begin to identify that with all the input and the output, an x amount always stays in my bank. And in a high inflationary environment in, like, Pakistan, you know, there's always an opportunity to earn on float as well where you can just sort of buy a bunch of T bills and so on and so forth. In terms of your model, a lot of people would call it very, very conservative and not very I mean, there are there there are so many other areas that you can double your your income. Is that is that is the money that you're holding in your wallets, is that being wasted, essentially? Is that being burnt in a in a 30% inflation environment? Or at the very least, you're you're investing that somewhere. I mean, I know that you can't give out loans right now. Can you, at the very least, use that money to partner with someone who can essentially use that as capital for loans or or something? You know, what's how how does that excess capital that always stays in the system get used efficiently and more productively? Yeah. You

know, I would I would think the best way to make use of that capital is to extend credit, to, you know, help businesses grow faster. You you might have a a small business with one location, but it if it has access to the right working capital, could expand to two stores, three stores, four stores, five stores. And these small businesses are are kinda like the backbone of Pakistan's economy. All of this money that sits in banks, all of these deposits just really get invested into T bills as you describe. And That's all very productive. Yeah. It works for them. Yeah. But it's not very productive. So just like I said in the beginning, lowest private sector credit to GDP ratio here in Pakistan out of all the emerging markets, and and I think developing markets too. But but do you think you can do that without a license with partners? So if we are only going to be an EMI license, if we're only going to operate under the EMI license, we we're not allowed to move the deposits. We have to keep the deposits safe, in custody, in trust accounts. We can never put them at risk. Okay. So, yes, it is potentially inefficient. So we do get, to earn some percentage. We can invest in T bills if we want to, but we can't lend them out. Right. If we transition to a different license, let's say we want to become a digital bank,

then we can mobilize those deposits and and put them to work and, you know, hopefully improve it. It entirely depends on where those deposits go, whether there's an opportunity, and then you'll sort of pay it accordingly. Yeah. If I were to ask you over the next twelve months, what I mean, you I know that you can do peer to peer. You can do, you know, you can probably pay utility bills, something that every fintech app sort of I mean, it's but is there any exciting feature? And I I I explicitly wanna know about the next twelve months. Nothing nothing too far fetched, nothing dreamy. What can we really expect coming out? Because I know that you'd said you're you're really focused, focused, so you're not really getting into investing stocks. And, also, you know, get a give a bat to your dog or,

what are some of those features? It's tough because these are kind of, like, secrets. I can't really tell you about all the fun stuff, but you'll see them soon. I think I think, what I can tell you is that we're gonna do a lot of really cool things for freelancers specifically. Okay. So learning what their pain points are, how to deliver on them in a way that that really makes them realize, oh, we are looking out for them. Remittance as well. So how can we empower the Pakistani diaspora? 15,000,000 overseas Pakistanis who support Pakistan in a really big way, $30,000,000,000 a year just from formal channels. Some people say maybe there's double that coming over Hundi Hawala informally. So if we can create efficiencies in these two places, I think that's a big win for us over at least, like, the next six months. That will that's where we'll spend a lot of time. There's a lot of magic that we'll sprinkle with, you know, how people send and receive money. We may we may see our first credit products. Those will be very interesting. There might be a little bit coming soon about savings and investing. I think I think you can teach financial literacy through thoughtful design. And what I mean is that there's probably only two ways to improve someone's financial position. You can throw money at them, give them a grant or a subsidy, or you can teach them how to better manage their money. Right? Right. So I think you could do that with user experience. So we're very mindful of this. How can you set up good habits? How can you set up automatic savings? How can how can you teach people the importance of compounding returns? People say it's the eighth wonder of the world, people in finance at least. So, I think there's a lot of work that we can do around that in a really fun way, tailored to the demographic of people who who use Ottapay. So the millennial, gen z, let's say, middle income. Right.

You've been very focused on freelancers or or diaspora. Do you think there's a potential opportunity, and I don't know how the technical of that would work, but there's a potential opportunity for you to connect with someone like PayPal, for example, where the IBAN doesn't have to exist anymore. And the IBAN is actually connected to a SaaSada Pay plus international account, that that sort of goes on to connect with a PayPal account. And so the folks can sort of use their PayPal account to be able to send it to you in the way that an average person is used to without having to go through the whole Pakistani, you know, give me your swift code, give me your this, give me that. Yeah. Which becomes a deterrent for a lot of these freelancers who are working with with with ordinary, let's say, Americans or or, you know, so. I wish I could tell you more.

We get a lot of questions about PayPal. And, you know, ultimately, we've thought about ways how we can route money so that we can help Pakistanis accept PayPal payments. But, ultimately, what is it that Pakistanis want? They just wanna get paid. So if we can help them get paid, and we could do it in a way that's easier than accepting PayPal because PayPal requires that that other person on the other side has a PayPal account. We think we have maybe a better solution. So, ultimately, PayPal is tough because they see Pakistan in a certain light. There's certain restrictions about how they, as a public company, can interact with with Pakistan.

They can't even operate here. Do you think that's, that's an FATF issue, or that's an overall image issue?

There's more to it than that. I'm I'm optimistic that we'll clear FATF, you know, hopefully. But, also, there's there's some challenges. The central bank does not want this really sensitive personal data to leave the country. Okay. And this is a decision that many countries have made around the world. Turkey, as an example, has laws and regulations around data sovereignty, especially in financial services. So the financial data or critical data of Turkish citizens must stay in Turkey. PayPal had to back out of Turkey because the regulator would not budge on this. So that means PayPal, this huge company with a very huge and complex infrastructure that powers it, they have to figure out how to create custom infrastructure just to support Turkey. The same would have to be done for Pakistan. Right. And it's even more difficult because we don't have AWS or Google Cloud or Azure here in Pakistan. So it's almost impossible for them to justify the business case, to make such a huge investment technically,

just to get things running to support Pakistan and and the restrictions here. Right. Yeah. You've been focused really on the middle club middle income sort of, educated youth. A large part of them do end up having a bank account. When we look at Pakistan, you know, the a bit a number that's really advertised in these conversations is the banked population, 12%, 13. And when it comes to I mean, I'm of course, there's a huge, population of women, who who require to be banked as well. And I think I I I do believe within the middle in middle income, bracket, there are a lot of women who find it very, very difficult to actually go and get a bank account, they can definitely use other pay. But if I would probably argue at least 70 to 75% of the potential customer, is actually not like Indonesia or or or China because there is a there is a literacy problem here as well. Right? I was listening to a a very famous economist, on another podcast, and he mentioned, you know, Pakistan is not like any other developing country. For a lot of other countries like Bangladesh and India and and Indonesia, they had some basic fundamentals, know, you know, figured out. And with Pakistan, you got 17,000,000 kids out of school. You've got you've got a lot of other problems as well, and that does come into play when it comes to, you know, creating a solution to that problem. One of the things that I saw I saw recently was, you know, China really was able to identify how to reach out to that particular population, that particular segment. And we saw that with TikTok. It happened globally, but with Pakistan, we weren't expecting that demographic to get onto it rapidly and be able to use it the way that it's meant to be used. And it's not just TikTok. Lot of these Chinese apps were able to do it. I understand, you know, you wanna have like, it's it's it's the way you wanna enter and really sort of expand onto it. But how do you really you know, when when it comes to scale, when you when it comes to really the opportunity, that opportunity will will definitely look like 50,000,000 people deal. On on a mobile wallet. The fact is out of those 50,000,000, maybe 5,000,000 are the ones that you could potentially tap right now, and 45,000,000 require a lot of a lot of other forms of handholding Mhmm. To get them onto this sort of new way of managing money. Mhmm. Right? Just as an example, my cook here, right before I was starting this podcast, he was calling the Standard Chartered Bank. The only reason he got that account was because we have a company, you know, sort of a payroll account payroll facility, and then they didn't ask any questions. They asked us all of those questions. But when they when he went to open the account, he didn't put his email address, which is what they used to, enable his ATM. And so now every time he calls the helpline, they're asking him all sorts of questions that he can't answer. Yeah. And they won't listen to anyone else, so I can't talk to them. And he's stuck. It's a it's a loop that he's stuck in. The account is opened. The salary is transferred to that account. He can't take the money out. And I know for a fact that for a lot of fintechs, like, it's the same problem with EasyPesa as well. You know, he has an EasyPesa account, but it's so complex. There's so many buttons. There's just so much happening there. Speaking my language. You know? But but it's true. Right? Like, is a reason why most of these people are not on Instagram. There is a reason why they end up on TikTok because on Instagram, when they open that app, they have to sign up. On TikTok, they open the app, and the content is right there content is right there. You know, they use WhatsApp because you don't have to write anything. You can just tap a button, you can start, you know, message with with with with voice notes. So there is definitely in terms of design, okay, how juicy it is, how colorful it is, how intuitive is it is, that's one aspect. But in terms of really the UI, UX of of your masses, I feel like there isn't enough being done. In Pakistan, you can talk all about, you know, we're gonna tap into this audience. We're gonna tap into this audience. Maybe the Kariana store is gonna get into it. But the fact is, you know, they're going to be there is a postcolonial sort of officer versus working class divide where the working class has lives in a different economy. Mhmm. And it's a cash economy. It's a great economy. And and and to be very honest, with a with a with an agile digital first payment system, the opportunity is incredible because, you know, you're not there's no real cost of having the next 1,000 accounts, which the banks do. And so they don't they they tend to ignore and not just ignore. They tend to aggressively push these people away, and they just want the guy in the suit to come and sit on the chair and get that bank account. Mhmm. And so the only hope that we have now with and and the fact is without these guys, you can't have a digital Pakistan. You can't even begin to imagine digital Pakistan. You, again, you're growing a 3% economy at small bubble of Islamabad, Lahore, Karachi, Edith, or sort of upper middle class saying, okay. We're gonna live in our own cashless bubble. Mhmm. And it's it's annoying, and it's confusing because, you know, as as as a business owner, I have to transfer their salaries every month. I can't tap it anywhere. There's no like, I can't file taxes for them because I have to take it out in cash, and then it's just, you know Mhmm. How do you go from the middle income educated, you know, early adopter to the critical mass? Yeah.

You know, the example you gave about TikTok is one of my favorites. So you think of how social media has really been tailored to a rather sophisticated audience now with Instagram. And TikTok has leaned into this simplicity, this instant gratification, and, you know, also at the same time, maybe not enough credit is given to people who aren't as educated. In Africa, you've seen M Pesa and the rise of mobile money by texting. You have to you have to send these rather complicated USSD strings. You have to know the format of the string to figure out how to send money, but it's become omnipresent. 60% of Kenya's GDP is transmitted over GDP. GDP. Is transmitted over Empath as a private company. Yeah. Empath as by safaricom. Oh, wow. And this is, like, as rudimentary as it gets. Very, very, very simple. People who are texting money, and texting is not a very user friendly interface. SataPay is a very user friendly interface. Banking here has historically been designed for people who are more sophisticated. Maybe not even on purpose, just generally, like, the the the systems weren't thoughtfully designed to be accessible to everybody. So in our case, we try to be as mindful as possible. I have a lot of admiration for for Bassett on our team. He's our lead product designer. And he really takes a look at everything that we build and whatever it is, we question, like, if someone's using an app like this for the first time, will this be intuitive? So having a certain icon on a button doesn't necessarily mean the user is gonna know what that button means. Maybe that user has never seen that kind of icon before. So if you can be mindful of this, is this is this disabled button gonna be understood? Is this interface going to be intuitive? If you can be mindful of that, you can design a very, very simple interface that scales to that that mass market, that critical mass. If you have something like EasyPass, it's very difficult when you have so many different options. So that's why we try to keep everything we do very sad. We try to distill all of these options into just what you need to know, just what you need to have so that we can make that jump. Right? You can cross the chasm. You can go from this more sophisticated early adopter, early majority, and then make it across the chasm to everybody else who maybe hasn't used a financial app ever before. Maybe they're starting to use a smartphone, but, ultimately, credit needs to be given to these people because they can figure out. If it's for their money, they they understand they'll learn the numbers. Right? They'll understand the basics. Someone will help them figure out that very simple flow. Right. And as long as it's simple enough, they will even learn those basics even if they're not literate. So the app today for Sadape is in English, and that's intentional. But tomorrow, it'll be localized.

And if it's localized, it'll it will it will be done so in a way where it can maintain its simplicity so that it can always be accessible to everybody. Makes sense. And one last question on the app front. Do you think you can potentially because you did mention, you know, in your chats, you're doing emojis and GIFs and so on. And one of the things that great things that Chinese are doing is they, they gamify almost everything. Right? And, I think I feel like when I look at, a financial service app, I I think voice plays a a a phenomenal role. And you you you take voice, and you, you know, sort of connect it with a personal assistant of sorts. Not a not an entire personal assistant, but really sort of a, a sadha mascot. You know, you open the app, the mascot's there, and, you know, you have you have him with a voice Mhmm. Really guiding you through through it. Because for a lot of Pakistanis, they're actually not gonna be able to read even if it's an Urdu. Right. And so, you know, that person doesn't what he says is, he he actually speaks what is required. So, you know, welcome to Satape. You know, give me your name. And I I mean, dreaming of the future where voice to text is now so so great that you can just say, okay. Just say your name. And they say the name, and it sort of appears, and it repeats the name, and it you can say yes or no type. Mhmm. Because I feel like when we're there, then you can really add people in. Right? And the and the the the your your personal assistant with voice, every time you sign into the app, it's like, oh, you know, you have a lot of money lying around. Would you want to invest? Mhmm. Or or, essentially, you know, again, it's it's that sort of do you think you would ever go beyond The U when you when it comes to user experience, is it just is design exclusive to icons and tiles and and those, or are you going to make it multidimensional and and really hit with all the sensory, you know, options available. Yeah.

It's an interesting point that you make, and I could I could see how that could work potentially really well here. We've started with multimedia already. So if you think about the kind of people who use Sadape, young, gen z, millennial, they're using social media, and they're used to seeing stories, vertical video. Yeah. We put stories in a banking app. So a user can actually be guided through Sadape. So right now, it's just on the more page. But as we launch more features, we actually have story content that will kind of walk you through the different parts of the app. So someone, not a, you know, three d mascot, but an actual human will speak to you. And that human will will potentially guide you through the experience that potentially you're you're trying to figure out. But, I think that's just the beginning. I I think voice has worked really well. Like, even Bikia. Bikia has localized really, really well. The app for riders, everybody's communicating primarily through through voice notes as well. And and I could see how voice could play a a big role in financial services too. Makes sense. I'm gonna ask you a last question that generally I asked all of my guests.

How do you see Pakistan twen you know, twenty eight years from now in 2050? You you sort of risked a lot, when you decided to come to Pakistan. There's definitely opportunity here, and and I'm glad that you were able to see it as someone, you know, who imagined camels and and and deserts. But but, obviously, you you you made a mind map of of of this country and the potential and what future you see. And so if you could give me an image of that or or a slice of that mind map, how do you see Pakistan twenty eight years from now in 2050? I

like that. I think, I think it starts with digitization. Right? You'll see this happen through smartphones. I think it's a future that's absolutely unavoidable. Everybody will have smartphones. Everybody will be connected to the to the Internet. Everybody will be using digital payments. That's just the beginning. I think Pakistan will probably lean into IT export in a really big way. I really hope to see that because you have so many young people who are graduating potentially, maybe not even graduating, but they have skills that are exportable. And instead of running around trying to find a job locally that pays in rupees, it's just a few steps to understand how to get yourself on the Internet and start earning in dollars and euros and pounds. And bringing all that value into Pakistan, think, is gonna be a really big deal. I like the idea of tourism. So I went to the North. I visited Skardu, Kaplu, Hunza, Gilgit. Exceptional. Maybe there's an international airport that that has, planes coming from around the world to see the Himalayas, the Hindukush, the Karo Karo. So I think that's very exciting. And as you have more and more foreigners who are coming and visiting, I think that repairs the perception issues that Pakistan has had historically. As you have more of these bloggers, as you have more tourists coming and and seeing the country and realizing that it's not this, you know, barren desert full of terrorism, that's honestly the image that many people have in the West Of Pakistan. So I'm really excited about potentially bringing foreigners, bloggers, you know, with Sarapei, host them in the North, and show them around, and show them that it's a really, really, really beautiful place up there. And along the way, them interact with the locals who, you know, in Pakistan, I've I've seen these people be incredibly hospitable. Pakistanis are so proud. Whether you're here or abroad, Pakistanis are incredibly patriotic, much more so than many other people I've met from other countries around the world. So I think in a big way, IT export is gonna be really important for Pakistan.

Omnipresence of digital payments, all of these things, I I think, are are rather obvious, and I hope to play a small part in that. That's awesome. Brandon, thank you so much for taking the time out and sharing all the insight. I I hope I mean, I've been personally I've you know, SADAPE has been one of the most exciting products to come out of Pakistan. This is not just me saying for the sake of it. I've said it multiple times on the podcast before as well. So I really hope you guys succeed in the vision that you created. I really, really hope that the the the backbone and the rail issue and all of those issues are solved, and and you're able to tap into and finally digitize the the majority of the previously untapped. I mean, I'm so sick of cash. You know, I... It's I've been I've been dying for it to end, but it just every year, just seems to grow even more. I hope we can fix enough for you. So I hope you can you can fix that. But thank you so much for coming in and sharing all the insight. Thank you, thank you. बहुत शुक्रिया. Are watching Thought Behind Things. Thank you so much for watching, I'll see you in the next one.