Securities and exchange commission of Pakistan (SECP) has awarded Mahaana Wealth, a digitized wealth management startup in Pakistan, regulatory approval to bring technology-led investment management to the nation. Mahaana was a member of YCombinator’s W22 class and obtained its initial funding from Tundra Fonder’s founder Mattias Martinsson.
This comes after the company also revealed that a $2.1 million pre-seed round has been closed, directly assisting it in meeting the regulatory capital requirements. Investors in the round included Swedish investment firm Vostok Emerging Finance, SparkLabs Group, and regional strategic partner IGI Holdings led Mahaana’s pre-seed financing (JV Partner of Nestle in Pakistan).
The startup will operate as a non-banking finance company (NBFC) with an SECP license, allowing customers to invest money in the products Mahaana will create. According to the startup, it would provide investment solutions for all types of clients and mass-market services.
Startups similar to Mahaana include KTrade and FinPocket, which offer stock investment advice, and Elphinstone Capital, which offers stock and bond investment advice. However, Mahaana has a slightly different model to remunerate investors as a proportion of the assets they manage. Mahaana will only offer digital services, differentiating it from traditional asset management firms.
Mahaana intends to introduce the Swedish pensions and savings model—based on digitization, simple onboarding, and KYC—into Pakistan. According to a statement from the startup, Pakistan trails well behind Sweden in terms of individual savings rates, with only 250k individual investors base (0.02% population penetration), compared to 6mn in Sweden (60% penetration), where the savings and pension model has been in use for decades.
“In a country where more than 50% of the population is under debt and spends 30% of their monthly income on repaying debts, the company sees opportunities for every person in Pakistan to create a financial security net in the form of building their savings and retirement funds,” said Muhammad Shamoon Tariq, the founder of Mahaana and ex-partner of Tundra Fonder (Sweden).
“Sweden’s savings revolution happened during the 80s and 90s and it has played an important role in achieving our status as a welfare state. Given its low savings rate and its young population Pakistan has a great opportunity right now that it needs to take advantage of,” said Mattias Martinsson, founder of Tundra and initial investor in Mahaana.