Online Startup Waada Buys Rival to Become Pakistan’s Largest Insurtech

Pakistani online insurance startup Waada acquired a local rival to create the South Asian nation’s largest player in the field, seeking to benefit from growth in the burgeoning market.

The Karachi-based company took over MicroEnsure Pakistan, a unit of MIC Global operating in South Asia and Africa, in an all-stock deal, according to a statement Friday. The brands combined have 1.5 million active customers, Waada said, without disclosing the deal value. Waada also said it’s closed a seed round of $1.3 million from local angel investors and foreign venture capital firms.

Pakistan’s startup industry attracted record funding last year, but has languished since, as venture investors have become more cautious amid a global economic slowdown and slumping tech stocks. Airlift Technologies Pvt., which raised Pakistan’s largest round, has shut down, Vitol’s used-car venture VavaCars exited the market this year, and Dubai-based ride-hailing provider Swvl Holdings has suspended daily operations in the country.

“This is the first of many consolidations which the Pakistan market will experience,” said Nadeem Hussain, founder of Planet N, a Waada investor that helped to structure the transaction with MicroEnsure. “The global slowdown will make fundraising difficult.”

Pakistan has one of the world’s largest unbanked populations, giving its financial sector ample potential for growth. The nation’s insurance penetration is just 0.7%, trailing its neighbors in Asia.

Waada aims to add customers using online sign-ups and has a goal to distribute 10 million policies in three to five years.