Papara, a Turkish financial technology company, is discussing a potential merger with Pakistani fintech firm SadaPay, valued at approximately $50 million, according to sources familiar with the ongoing negotiations.
The prospective merger between Papara and SadaPay, involving the “complete ownership” of SadaPay by the Turkish fintech giant, is reportedly in an advanced stage.
Papara’s investment aims to capitalize on SadaPay’s innovative banking and remittance approach, with a specific focus on the expatriate Pakistani community in the UK and Saudi Arabia. The goal is to transform financial services not only within Pakistan but also beyond its borders.
Even with the change in ownership, SadaPay is “expected to maintain operational independence, preserving its vision and team under Papara’s guidance,” according to Crowdfund Insider. This transition showcases Papara’s confidence in SadaPay’s potential and its team’s ability to drive innovation in the dynamic fintech space.
Is this a good development for Pakistan?
While key officials of SadaPay remain tight-lipped and declined to provide insight into the matter, but according to sources within the fintech community, the potential merger is seen as a “positive development” for Pakistan. They believe the move will solidify Turkish fintech’s position in Pakistan, poised to enhance services and solutions within the country’s financial ecosystem.
“This is a good development for Pakistan’s startup ecosystem,” the official said, speaking on condition of anonymity. “This deal will pave the way for further investment of around $10 million in addition to the actual value of the deal to boost operational capacity” of SadaPay.
He further said that the deal is anticipated to involve the transfer of 100% ownership of SadaPay to the Turkish entity, with the agreement likely to fall within the range of $30-50 million.
Dealroom.com, a reputable provider of data and intelligence on startups and technology ecosystems, had previously assessed SadaPay’s valuation at $43-64 million in April 2022, underscoring the company’s substantial market presence and growth potential.
The finalization of the merger deal is contingent upon regulatory approval from the Pakistani central bank, with the finer details of the transaction expected to be disclosed after obtaining the necessary regulatory clearance.
Papara and SadaPay
The Ankara-headquartered Papara, established in 2016, has emerged as a significant player in the financial technology sector, pioneering electronic money and payment services in Turkiye. Papara attained the title of Turkiye’s first fintech unicorn company in July 2023.
The company holds the distinction of being the first non-banking entity in Turkiye to issue a prepaid card bearing the Mastercard logo. With a user base exceeding 18 million, Papara offers a suite of digital wallet services, empowering users to conduct a wide array of financial transactions seamlessly via mobile devices or online platforms.
In contrast, SadaPay operates under the regulatory purview of the State Bank of Pakistan (SBP) and operates as a wholly-owned subsidiary of SadaPay Technologies Limited, registered within the Dubai International Financial Center.