HR startup raises $1.3m in seed round

KARACHI: HR startup Paismo has raised a seed round of $1.3 million, which takes its total funding to date to $1.5m, the company said on Monday.

Speaking to Dawn, Paismo co-founder and CEO Rebecka Zavaleta said the start-up helps businesses address HR challenges like managing employees, keeping track of their attendance and performance, providing them with benefits and processing their payroll.

“The solutions so far are not easily customisable, difficult to use, and do not generally provide access to benefits. Paismo is solving these challenges by building a customisable HR tech product with local benefit integrations,” she said.

The start-up is backed by top global venture capital and regional investors, led by Indus Valley Capital, with participation from Antler and Jedar Capital, a company statement said.

In Pakistan, Paismo focuses on increasing employee bank account openings and easier access to health benefits. The founders claim it’s Pakistan’s first modern HR tech, payroll and benefit provider with the aim to go global, including the Middle East, North Africa and South-East Asia.

Pakistan’s start-up ecosystem has been in financial turmoil for many quarters. Heavily funded start-ups like instant-delivery service provider Airlift and mobility player Swvl shut down operations altogether while other firms have either rolled back services or laid off employees. Funding raised by Pakistani start-ups on a quarterly basis dropped to its lowest level in three years in April-June. The latest three-month period witnessed only eight deals amounting to $5.2m, down 95 per cent from a year ago.

Paismo co-founder Usama Mahmud told Dawn that raising investment for start-ups has become “relatively challenging” in the ongoing economic climate. “In the case of Pakistan, it is even more difficult considering the political and economic uncertainty. Global investors want to minimise risk. We believe start-ups in Pakistan should focus more on capital-efficient business models and ‘build locally, sell globally’ besides serving the local market,” he said.

Inflation has gone up globally. Venture capitalists–backed start-ups are struggling to find new funding for rapid customer acquisition. VCs aren’t willing to write blank cheques anymore to help start-ups acquire new customers at a heavy price.