Pakistani businesses have a bright future ahead of them, thanks to their unique ideas attracting international investors who have put millions of dollars into making themes and concepts a reality.
Despite a lack of awareness and a proper environment to nurture ideas into small business endeavours, leading firms in education, e-commerce, fintech, healthcare, payment solutions, logistics, and real estate, among others, have secured more than $150 million in funding in the last 18 months. It includes over $85 million in money secured so far this year, with another $66 million expected to be raised in 2020.
According to industry experts, Pakistan’s expanding mobile phone penetration and young population are two main drivers driving international investment in startups. According to the latest data, the country boasts 85 percent teledensity, with 183 million cellular, 98 million 3G/4G, and 101 million broadband customers out of a population of 220 million.
Recognizing the potential of startups, Pakistan’s government has begun measures to create a startup ecosystem, encourage ease of doing business, innovation, and entrepreneurship.
The National Assembly enacted the Companies (Amendments) Bill 2021, introduced by Pakistan’s Securities and Exchange Commission, this week in an effort to improve the country’s overall business climate.
The law will now be presented to Pakistan’s Senate, the country’s upper body of parliament.
In the last 18 months, startup financing has benefited Pakistan’s economy in general and the IT sector in particular. The economy recovered from a 0.4 percent contraction in 2019-20 to 3.94 percent growth in 2020-21, with IT exports increasing by 46% in the first ten months of the current fiscal year.
Experts claim Pakistan is an underserved market because barely 25% of the population uses banking services, despite the fact that the country’s burgeoning retail, e-commerce, wholesale, and trade sectors all require a better financial ecosystem.
Sadapay, Safepay, Bazaar, Tajir, makaan (home), Trukkin, remoteBase, sehat kahani (health narrative), educational, CreditBook, Seed Labs, RepairDesk, and InventHub are among the firms that have received international funding. On Friday, top executives from a number of these companies spoke with Khaleej Times.
According to Janardan Dalmia, founder and CEO of Trukkin, Pakistan is a rising market for companies with significant business potential.
The startup, which just acquired $7 million in Series A funding, has developed a strategy to organise the country’s logistics and supply chain infrastructure in order to harness its business potential.
“We are quite optimistic about the Pakistani logistics business, and I am convinced that Trukkin solutions will attract more industry players and provide much-needed transparency and efficiency for suppliers,” said former banker Dalmia.
According to Samiullah Tariq, head of research at Pakistan Kuwait Investment Company, the country’s startup culture is expanding.
“For the rest of the world, the startup boom in the Covid era is an interesting and surprising storey, but travel restrictions and a decrease in global air travel provided an unexpected advantage to start-ups in Pakistan, as it sped up due diligence processes and finalised deals through video-conferencing platforms,” he said. “We are at the start of a new period of progress. In the coming years, startups will establish a solid foundation for the IT sector’s growth and develop a new source of foreign exchange,” Tariq predicted.
According to Usman Butt, CEO of RepairDesk, Pakistan’s startup ecosystem is growing at a rapid pace.
“Within our market, we’ve developed solutions for a variety of needs. Companies are increasingly going into the digital world and leveraging it effectively to provide customers with a whole new level of convenience,” Butt added.
The Lahore-based firm focuses on the North American market, but it is open to all other regions, including the Gulf Cooperation Council.
“I feel the GCC market has a lot of promise, but the chemistry needs to be correct for us to take advantage of whatever chances we find. What matters is that we establish a strong relationship with our clients and gain a thorough understanding of their requirements. We wouldn’t be as successful as we are now if it weren’t for it,” he continued.
Due to the rise of hardware design consultancy and product firms in the past year, Usama Abid, CEO of InventHub, gave the Pakistani startup ecosystem a seven out of ten rating and said his company is exploring potential in overseas markets, especially the Gulf area.
“All consumer and industrial electronics manufacturers are our target market. We’ll start with North America, then go on to the Mena region and Southeast Asia, which are the largest centres for electronics design and manufacturing,” Abid explained.
In terms of the startup’s future objectives, he stated that it is expanding at a rapid rate.
“For product development and early growth, we’ve raised three rounds of finance. In the first week of June, we raised a small growth round from a VC and a few of angel investors. We plan to use that growth round to boost our sales even further before raising our next big round, a pre-Series A round, in early 2019.
RemoteBase, a Lahore-based firm that connects Pakistani software professionals with Silicon Valley startups, has acquired $1.4 million in funding. Qasim Asad Salam, the company’s founder and CEO, stated that Pakistan has an abundance of tech talent, which, when combined with a desire to learn and improve, equals huge untapped potential.
“Until last year, Pakistan’s startup scene was really young. Since then, we’ve seen a slew of startups raise significant seed and Series A funding. This has never happened before. This indicates that the ecology is maturing, which is excellent news for all,” Salam remarked.
“Raising capital means organisations have greater runway, better wages for tech talent, and more chances to score. Although the ecosystem is still distant from that of Silicon Valley, the pandemic and remote work have allowed enterprises like ours to tap into the Silicon Valley startup community from Pakistan.”
RemoteBase’s co-founder and CTO, Talha Masood, said the company is developing an end-to-end internal solution that will allow it to scale to thousands of engineers worldwide, not only in Pakistan.
“We have a very scalable, high-growth business strategy that has been expanding at a rapid pace. We can easily increase five times in the next 12 months using the present systems,” he stated.
Both co-founders are eager to break into the GCC market, claiming that the Gulf region has immense potential, with several governments committing to tech-based companies.
“As RemoteBase grows from 50 to 5,000 employees, we will look to neighbouring countries and the Gulf region to discover, hire, educate, and position excellent engineers,” they continued.
According to them, the Gulf area maintains its image as a technology hotspot, and the RemoteBase concept has plenty of room there.
“The post-Covid era will be a thrilling one for the region’s tech industry. As the market for talent increases post-Covid, the UAE, with its considerable and developing tech infrastructure, will benefit from the flexibility of a remote style of resourcing,” they stated.