Afiniti and Careem: Tech Unicorns Made in Pakistan

[Riaz Haq]

Afiniti and Careem are two technology unicorns engineered in Pakistan by Pakistanis. AI (artificial intelligence) startup Afiniti software has largely been engineered in Lahore while taxi hailing service Careem's technology has mostly been developed in Karachi. Here's more about these unicorns:

Careem:

Careem is a taxi hailing app that is giving its American competitor Uber a run for its money in a region stretching from Pakistan to the Middle East and North Africa. The company cofounded by Mudassir Sheika, a Pakistani national, is headquartered in Dubai in the United Arab Emirates.

Careem's last round  was valued at over a billion dollars when it raised $350 million from Japanese e-commerce firm Rakuten and Saudi Telecom Company (STC) at the end of 2016, according to Tech Crunch.

Careem's software has been developed by its technology partner VentureDive based in Karachi, Pakistan.  VentureDive was started by serial Pakistani entrepreneur Atif Azim who sold his earlier startup Perfigo to network equipment giant Cisco for $74 million in 2004, according to a report in Tech in Asia.

Atif launched VentureDive in 2011 and  took a small equity stake in Careem in exchange for building its entire tech stack – including the app, the website, and other digital platforms. That small stake has now grown to $50 million.

In 2016, Careem acquired VentureDive's engineering team working on its technology to give the engineers more ownership of the product – now they are getting equity stake in Careem and larger bonuses.

Afiniti Development Team in Lahore, Pakistan. Source: Afiniti.com

Afiniti:

Washington D.C. based AI technology firm Afiniti, founded by serial Pakistani-American entrepreneur Zia Chishti, has filed for initial public offering (IPO) at $1.6 billion valuation, according to VentureBeat. The company has grown out of the technology used in the Pakistan-based call center business of The Resource Group (TRG) also founded by Zia Chishti.

Bulk of the Afiniti development team is located in Thokar Niaz Baig, Lahore. In addition, the company has development team members in Islamabad and Karachi.

Chishti founded his first company Align Technology in 1997 in Silicon Valley. It creates clear plastic braces for straightening teeth by using advanced 3-D computer imaging. The technology now trademarked as Invisalign has helped millions of people straighten their teeth for a beautiful smile without enduring the pain and unsightly looks of the traditional steel brackets and wires used in orthodontics. Align Technology is now valued at $10 billion.

Afiniti uses artificial intelligence (AI) algorithms to enable real-time, optimized pairing of individual call center agents with individual customers in large enterprises for best results. When a customer contacts a call center, Afiniti matches his or her phone number with any information related to it from up to 100 databases, according to VentureBeat. These databases carry purchase history, income, credit history, social media profiles and other demographic information. Based on this information, Afiniti routes the call directly to an agent who has been determined, based on their own history, to be most effective in closing deals with customers who have similar characteristics.

Summary:

Pakistan is an emerging center of technology with at least two unicorns, Afiniti and Careem, engineered by Pakistanis in Pakistan.  With growing numbers of young homegrown Pakistani technologists, a highly skilled diaspora and an evolving startup ecosystem with incubators, accelerators and investors, the country is beginning to demonstrate its vast potential as a vibrant technology hub of the future. Provincial governments, particularly those in Punjab and KP, are showing leadership in encouraging this trend. The main ingredients are all coming together to make things happen in Pakistan.

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[Riaz Haq]

#Pakistan's Airlift raises $12 million in country's largest Series A to build a mass transit system. It offers #rideshare system using higher capacity vehicles enabling urban commute. #Transportation #VentureCapital #startups #Uber #Lyft https://www.menabytes.com/airlift-series-a/ via @MENAbytes

Airlift, a Pakistan-based eleven-month-old decentralized mass transit startup, has secured $12M in Series A financing, it announced in a statement today.

The round is led by First Round Capital, a leading US venture capital firm with notable investments in Uber, Square, Roblox, Looker, and Notion. The round which is the largest Series A ever raised by a Pakistani startup also marks one of the largest financings in South Asia this year and the first time that a US-based VC has led a round in Pakistan. The round was also joined by Fatima Gobi Ventures, a joint venture between one of Pakistan’s leading conglomerates Fatima Group and Gobi Partners, and Indus Valley Capital.

Founded by Usman Gul, Ahmed Ayub, Awaab Khaakwany, Meher Farrukh, Muhammad Owais, and Zohaib Ali earlier this year, Airlift enables users to book rides on premium quality (air-conditioned) buses (and vans) that have fixed routes, stops and times, in Lahore and Karachi.

The users after signing up and logging in, can reserve their seats by selecting their pick up and drop off locations or browsing the routes. Airlift’s mobile app that’s available for both Android and iOS allows users to track the buses in real-time and make payments as well using their credit or debit cards (the users have the option to pay by cash too when they board the bus).

“Airlift is spearheading the third wave of ride-sharing, in which higher capacity vehicles are playing an increasing role in enabling urban commute. With this financing, Airlift is looking to invest in technology and operations to scale its vision for a decentralized mass transit system, initially focusing on the developing world,” the startup

“In the future, mass transit systems will be dynamic in nature, catering and adapting to the changing needs of the urban population. Our vision for a decentralized mass transit system is a new concept, one that will fundamentally redefine how people commute in urban centers,” says Usman Gul, Airlift’s co-founder and CEO.

Prior to moving to Pakistan, Gul previously worked at DoorDash, the largest food delivery platform in the US. Tony Xu, Founder/CEO at DoorDash, which was valued at $12.6 billion in the last round, was among the first few angel investors to support Airlift. In August, just five months after launching operations, Airlift closed seed financing of $2.2M with Indus Valley Capital and the Fatima Gobi Ventures co-leading the round. In October, only two months later, the Company has secured Series A financing, increasing its total capital to $14.1M and setting a new precedent for startups based in Asia.

[Riaz Haq]

Afiniti founder Zia Chishti on his third billion-dollar company

https://www.afr.com/companies/lunch-with-the-afr-zia-chishti-founde...

"We're on our third billion-dollar company right now. The first was Align Technology, which today is trading over $US20 billion, and then I founded a private equity shop called TRG, which is arguably over a billion now, and then the third is Afiniti, the company that you've probably heard of most recently, with Wyatt."

He says Afiniti has just raised $US20 million in Australia as part of a $US70 million funding round to finance expansion.

Having done my homework, I ask why he was ejected from the management and board of the first company he started, Align Technology, which made teeth straighteners for adults.

"If you rewind the timeline in 9/11/2001, a bunch of loonies struck the World Trade Centre, and there was a view that Osama Bin Laden was the originator of these loonies," he says.

"Osama Bin Laden at the time was in Afghanistan, and Afghanistan was hard to distinguish from Pakistan in the minds of US equity investors. Our share price went down 90 per cent in two days. We had, at the time out of 1000 employees, 750 in Pakistan and the equity markets perceived our operations to be at risk.

"That triggered a very tense relationship with my board because their view was just get out of the country, why would you stay there? My view was a little more long term, which was we owe it to the employees and just because the equity markets are making a poor short-term decision, doesn't mean that we should.

"We had a different set of views as directors and in one of those cases where both sides were right, the dialogue became a little bit bitter. The way we concluded it was that I bought out the entire operations in Pakistan, all 700 plus people, who actually had nothing to do."

Chishti bought a call centre company in the US called Alert Communications for $US2 million and shifted its operations to Pakistan.

"The profitability went from minus $US1.5 million to $US3 million in six months. On the back of a $US2 million investment that was a darned good return."

This marked the beginnings of Afiniti with its combination of labour arbitrage between developing and developed countries and artificial intelligence to make call centres more efficient.

Bi-national
I decide to delve into the connection with Pakistan.

"My father was American with German descent," he says. "His forefathers arrived in the Americas in the early 1800s. They were a Pennsylvanian Dutch family. I was born in Bar Harbor, Maine, to an American father and a Pakistani mother who at the time was getting her PhD at Cornell. My father at the time was getting his PhD in philosophy and she in education.

"My father died when I was two years old and my mother moved back to Pakistan where she raised me until I returned from college in 1988. So, I've kind of grown up bi-national, if you will, between the United States and Pakistan. I have an affiliation with both."

Chishti was born Wilson Lear but his mother changed his name when they moved to Lahore so he wouldn't stand out.

He is clearly proud of his company's contribution to the Pakistan economy: companies in the TRG portfolio employ 7000 people.

"Today, across the TRG portfolio, we are the largest technology services sector investor, largest employer, largest exporter," he says.

Chishti hates what he sees as widespread misrepresentation of Pakistan as a renegade state rife with terrorism and violence.

"The Economist ran a very unfortunate article many years ago calling Pakistan the most dangerous country in the world," he says.

"It's laughable. It's completely false. If you look at the actual rate of violent crime in Karachi, which is the most violent city in Pakistan, the homicide rate per 100,000 is below Chicago, to give you a loose order of approximation. Lahore is comparable to Seattle for example."

[Riaz Haq]

Founded by 3 #Pakistanis (Talha Ansari, Muhammad Nowkhaiz & Wahaj Ahmed), Retailo raises $2.3 million pre-seed for its B2B #ecommerce marketplace in Saudi & Pakistan to help 10 million SMEs retailers in #MiddleEast, North #Africa & #Pakistan https://www.menabytes.com/retailo-pre-seed/ via @MENAbytes

Talha Ansari, Muhammad Nowkhaiz, and Wahaj Ahmed; who previously worked with Careem, Rocket Internet, Daraz, and McKinsey, Retailo wants to empower over 10 million SMEs in the retail sector of the Middle East, North Africa & Pakistan with the use of technology and real-time data. Its marketplace enables will enable the retailer to procure inventory for their stores.

Retailo is starting with small grocery stores in Saudi Arabia and Pakistan which it says is a $100 billion opportunity. It had apparently launched in Pakistan’s largest city Karachi a few months ago and has recently launched in Riyadh too. The startup said that it will focus on Saudi as its home market.

“Retailo’s technology and operations combine to deliver a strong value proposition to retailers, manufacturers, distributors, and wholesalers. It is focused on offering SMEs competitive pricing; a one-stop-shop to discover products and the ability to order whatever they need, whenever they need,” said the startup in a statement.

The biggest highlight of the startup is its team. Talha Ansari, according to the statement was the youngest CEO at Foodpanda (Pakistan), at the age of 25. He later worked with Careem as Senior Director Operations helping the company scale its last-mile delivery business in Saudi. Mohammad Nowkhaiz, prior to founding Retailo was Head of Strategy at Careem and spearheaded company’s super app strategy post-Uber acquisition. Wahaj Ahmed is a former McKinsey consultant who was the youngest Careem GM at 25 and grew company’s business in Karachi by 10x in eight months, claims the statement.

The three founders commenting on the occasion, said, “We strongly believe in creating impact in the lives of people by giving them opportunities to improve their earning potential. The MENAP region has a significant opportunity to increase its economic prosperity by unlocking the productivity delta that exists between the region and global benchmarks. MENAP is home to 700 million individuals & 10 million SMEs; and its unorganized retail sector presents the perfect opportunity to increase the efficiency of supply chain by utilizing technology and real-time data.”

Interestingly, their competition in both Saudi and Pakistan includes startups founded by Careem alumni. Sary, the leading Saudi player in the space is co-founded and led by Mohammed Aldossary, a former Careem general manager. It closed a $6.6 million Series A earlier this year. Bazaar, the Pakistani B2B ecommerce platform that raised $1.3 million pre-seed earlier this year is co-founded by Saad Jangda, who was one of the founding members of Careem Now. Dastgyr, another Pakistani startup going after the same market also has Careem alumni as its co-founders.

Shane Shin, the Founding Partner of Shorooq Partners thinks that Retailo is led by exceptional founders, “Seed stage investing is all about backing the right people. We have looked at this space deeply and are proud to invest in the dream team behind Retailo who we believe can successfully build a strong, regional and international business.”

Khailee Ng, Managing Partner, 500 Durian, said, “While they operate one of the fastest-scaling business models in the world, their success means millions of SMEs and rural populations are more productive and have more stability and food security. Technology can
impact the next billion, and we’re already seeing it here with what Retailo had been doing.”