Pakistan: Startups Incubated at Karachi's NED University Got the Highest Funding in 2022

[Riaz Haq]

Karachi-based start-ups raised $236.7 million in 2022, accounting for two-thirds of Pakistan's total startup funding and almost double the previous year, according to Data Darbar.  Karachi, Pakistan's largest city, is followed by Lahore with $69.2 million and Islamabad with $41.6 million. Nationally, the total funds raised by startups have been declining after hitting the peak of $173 million in Q1/2022. 

City-wise Startup Funding of Pakistani Startups. Source: Data Darba...

National Incubation Center, located at Karachi's NED University of Engineering and Technology (NEDUET), has incubated more than 250 start-ups so far.  These include ride-hailing app Bykea and London-based proptech platform Gridizen. Kamran Mahmood, the CEO of Gridizen, who recently returned to Pakistan to join NIC Karachi, says he has found it even easier to meet decision makers at large companies in Pakistan than the UK, according to a report in FDI Intelligence. “Karachi really offers the best chance for Pakistan to catch up with other start-up ecosystems,” says Rabeel Warraich, the founder and CEO of Sarmayacar, a Pakistani early stage VC fund set up in 2018. 

 

Since the start of 2018, the total VC funding in Pakistan soared more than 20-fold to reach an all-time high of $333m in 2022, according to Magnitt, an emerging market data platform. Most of the funding has gone to e-commerce and fintech start-ups, including Karachi-based online marketplace Bazaar Technologies, salary advance app Abhi and Lahore-based e-commerce platform Jugnu.

NIC Karachi is funded by Ignite, the country's national technology fund, and operated by LMKT, a private tech company which runs two other NICs in the cities of Hyderabad and Peshawar.  “The level of funding and support has improved a lot in recent years,” Sana Shah, the program manager at the National Incubation Center (NIC) in Pakistan's most populous city Karachi,  told FDI Intelligence. It is one of eight public-private tech innovation hubs established across Pakistan since 2016.  

Startup Funding Trend in Pakistan. Source: Data Darbar via FDI Inte...

Across Pakistan, the total funds raised by startups have been declining since hitting the peak of $173 million in Q1/2022.  Start-ups raised just over $15m in Q4/22, the lowest figure since the first quarter of 2020 and 79% lower than the same period a year earlier, according to Data Darbar, which tracks the Pakistani start-up scene. This downward trend is at least partly due to Pakistan's current economic crisis. It also reflects a global decline in VC investments in startups. 

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[Riaz Haq]

Lahore’s Tech Renaissance: From Astrolabes To AI
Amir Husain

https://www.forbes.com/sites/amirhusain/2023/03/29/lahores-tech-ren...

Another intriguing venture spun off from LUMS is a startup that develops affordable three-wheel electric vehicles (EVs). As the world increasingly turns to sustainable transport solutions, this company aims to cater to the growing demand for cost-effective EVs in Pakistan and beyond.

The third group is running an agri-tech research initiative that combines AI and the Internet of Things (IoT) to control large-scale agricultural processes autonomously. The project seeks to optimize variables such as fertilizer, water, and pesticide, and monitor plant health, thereby increasing productivity in the farming sector.

Technologies such as these can lift the local economy, increase global collaboration, and scale exports.

Aitchison College

Our next stop was my old alma mater, Aitchison College, a prestigious K-12 school founded in 1885. Boasting one of the world's most beautiful campuses on a sprawling 200 acres of land, the school has evolved from an elite institution to offering full-ride scholarships for applicants from diverse backgrounds.

Michael Thomson, the Principal of Aitchison College, and his lovely wife, Elizabeth, gave us a tour of the school's museum, the impressive chemistry labs, and the nearly complete Artificial Intelligence, Robotics, and Biotech building. This new facility will be a massive asset for Aitchison and the student community, bringing research and entrepreneurship to the high school level.

One of the most inspiring stories we heard was that of a young graduate from the tribal belt along the Afghan border in North Waziristan. Upon meeting this impressive young gentleman, we learned that after receiving a full scholarship at Aitchison, he is now heading to Dartmouth for higher studies – a transformative opportunity for him, his family, and his village.

Entrepreneurs in Lahore

During our trip, we interacted with numerous entrepreneurs who have contributed significantly to Lahore's entrepreneurial ecosystem. Among them was the legendary Syed Babar Ali, founder of LUMS and Chairman of Packages Ltd. Babar Ali is one of the most admired Pakistanis globally. In his long list of laurels is his dedication to environmental conservation and a term as the President of the World Wildlife Foundation (WWF), which he took over from Prince Philip, Duke of Edinburgh, in 1996. His contributions to industry and education are immeasurable. At the young age of 97, he continues to work from his office daily, maintaining a hectic and full schedule. His unwavering dedication and passion are truly inspiring.

We also met Aezaz Hussain, the founder of Systems Ltd., Pakistan's oldest software company. Mr. Hussain has led his company with great poise for over forty years. He has now expanded his enterprise globally through a network of affiliated companies. The Systems Ltd. network encompasses businesses in the UAE, Australia, Saudi Arabia, India, Europe, and the US. With around 10,000 employees, Systems is experiencing rapid growth and solidifying Pakistan's position in the global software industry.

Nabeel Ahmed, the founder of Core9, a new AI services company focused on industrial applications and a SparkCognition partner, took us on a tour of the Sundar Industrial Estate. Here, we learned about the nearly 650 manufacturing companies based in the park, spanning industries such as pharma, textiles, TVs, and chemicals. Meeting one of the newest SparkCognition clients, a multinational chemical manufacturer also located within the Sundar Industrial Estate, was exciting and inspiring.

[Riaz Haq]

Lahore’s Tech Renaissance: From Astrolabes To AI
Amir Husain

https://www.forbes.com/sites/amirhusain/2023/03/29/lahores-tech-ren...



The Lahore-based team at FiveRivers Technologies has been a tremendous partner for SparkCognition. But FiveRivers also impressed us by showcasing a suite of their domestically built software products gaining traction in international markets. Their SmartWindows application is one such example. The application enhances productivity for power users by supercharging window and state management on PCs. It’s quickly gaining users worldwide.

Later that night, at a wonderful ecosystem dinner organized by Usman Malik of power company, PITCO and Mahmud Hiraj of private equity firm, Baltoro Capital, we met many other members of the innovation ecosystem in Lahore. Usman heads the power plant design arm of PITCO, which traces its origins back to 1938. Mahmud is a founding partner at Baltoro Capital, a leading private equity firm in Pakistan. Mahmud moved back to Lahore after spending 15 years in the finance industry in North America. His fund, Baltoro, is Pakistan-focused and capitalizes on the country’s growing consumer market and rising export competitiveness.

Export is a key area of focus for many Pakistani entrepreneurs, particularly those building high-tech products. One of the guests at the ecosystem dinner was Salem Rehman of EMCO Industries. EMCO is Pakistan's premier manufacturer of high-voltage products for the electric grid. His company has a long history of catering to the domestic and regional markets but has now also started exporting to the United States.

Wrapping up

Our trip to Lahore allowed us to witness firsthand the energy and drive of Lahore’s entrepreneurs. The city is full of innovative startups, research projects, and academies focused on scientific development. This varied and fast-growing ecosystem is a testament to Lahore's immense potential and creativity.

As we continue our work in Austin, build new relationships in Munich, and explore partnerships in Lahore, we hope to contribute to the growth of entrepreneurial communities in all these innovation centers. By fostering connections between these vibrant cities, we can nurture AI and broader S&T collaborations that have the potential to change the world. The unyielding passion of the people we met makes us optimistic about the future of Lahore, of Pakistan, and indeed, of the world.

[Riaz Haq]

LMKT teams up with INSEAD to launch ‘Incubation Program’ at NIC Karachi

https://mmnews.tv/lmkt-teams-up-with-insead-to-launch-incubation-pr...


KARACHI: LMKT, a leading full-service technology company in Pakistan specializing in tech incubation and IT solutions, has announced its collaboration with researchers from renowned global business school INSEAD to launch the XSeed Incubation Program in collaboration with NIC Karachi, Pakistan’s largest tech incubator.

The XSeed Incubation Program is a 12-month initiative that supports early-stage venture development and fosters the growth of new startups. Drawing on the successful experiences from other global markets, the program adopts rigorous frameworks developed by INSEAD’s experts in entrepreneurship and strategy. The collaboration with industry leaders ensures that the program offers tailored support to Pakistani entrepreneurs, enabling them to thrive in the dynamic business landscape.

NIC Karachi, funded by Ignite and operated by LMKT, is a dedicated incubation center and startup accelerator that has played a pivotal role in empowering innovative entrepreneurs through mentorship, training, and access to funding.

With a remarkable track record of incubating over 299 startups, creating more than 99,000 jobs, and raising Rs. 8.1 Billion in investment, NIC Karachi continues to spearhead Pakistan’s entrepreneurship scene.

Atif R. Khan, CEO LMKT, expressed his enthusiasm about the collaboration, stating: “We are thrilled to partner with researchers from INSEAD to launch the XSeed Incubation Program in collaboration with NIC Karachi.

This initiative reflects our commitment to foster the growth and development of the startup ecosystem in Pakistan. By combining LMKT’s expertise in scalable IT solutions and the global knowledge of INSEAD researchers, we aim to provide aspiring entrepreneurs with a transformative platform to turn their ideas into successful businesses.

Dr. Chiara Spina, Assistant Professor, Entrepreneurship and Family Enterprise at INSEAD, highlighted the significance of this collaboration, stating, “We are excited to join forces with LMKT and NIC Karachi to launch the XSeed Incubation Program. This partnership exemplifies INSEAD’s commitment to fostering real change through entrepreneurship and supporting the growth of innovative companies. By combining our expertise in entrepreneurship and strategy with the vibrant ecosystem of NIC Karachi, we aim to empower Pakistani entrepreneurs and drive impactful change in the startup landscape of Pakistan.”

Faizan Laghari, Project Director NIC Karachi, emphasized the importance of this collaboration, saying, “This partnership with researchers from INSEAD and LMKT marks a significant milestone for NIC Karachi. It further strengthens our mission to empower aspiring entrepreneurs and nurture innovation within Pakistan. By leveraging the expertise and global network of INSEAD researchers, we are confident that the XSeed Incubation Program will provide invaluable support and resources to our startup community, enabling them to thrive and make a lasting impact on the entrepreneurial ecosystem of Pakistan.

[Riaz Haq]

Chinese firm to fund Pakistani startups - Newspaper - DAWN.COM

https://www.dawn.com/news/1878597

LAHORE: Gobi Partners, a leading pan-Asian venture capital firm, has officially announced the $50m Techxila Fund II alongside the signing of a memorandum of understanding (MoU) with the Bank of Punjab (BoP).

This strategic partnership aims to foster entrepreneurship and strengthen economic cooperation in Pakistan. The announcement has been made during the Pakistan Investment Conference in Shanghai, part of Punjab Chief Minister Maryam Nawaz’s visit to China.

The Techxila Fund II aims to empower startups in Pakistan, with a focus on high potential sectors such as fintech, e-commerce, logistics and supply chain, health tech, and SaaS. This initiative supports under-served entrepreneurs, encourages innovation, and drives sustainable growth in emerging markets.

The plan to launch $50m Techxila Fund II builds on the success of Gobi’s first Pakistan-focused venture capital fund (Techxila Fund I), which has invested in 22 startups to date. These portfolio companies have collectively impacted 3.2 million low-income households, generated a total revenue of $245m in 2023, and issued loans worth $54m during the same year.

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Shark Tank Pakistan sets world record with largest deal in history - Pakistan - Aaj English TV

https://english.aaj.tv/news/330389926/shark-tank-pakistan-sets-worl...

Shark Tank Pakistan has made history by facilitating a record-breaking investment deal worth Rs150 crore. The recipient of this substantial funding is SARAAF, a global trading company that has captured the attention of investors with its innovative business model and ambitious goals.

SARAAF secured Rs80 crore for a 20% equity stake, along with Rs70 crore in exchange for a 3% royalty.

This unprecedented deal not only reflects the confidence investors have in SARAAF’s potential but also highlights Pakistan’s growing prominence in the global entrepreneurial landscape.

With over 25 years of experience, SARAAF specializes in connecting Central Asian suppliers with international markets, particularly in exporting premium Onyx, Cotton, and minerals.

The company’s vision of becoming Asia’s largest B2B sourcing platform has received a significant boost from this investment.

The panel of investors, known as “sharks,” includes notable figures such as Faisal Aftab, Rabeel Warraich, Romanna Dada, Junaid Iqbal, and Usman Bashir, all of whom bring diverse expertise to support entrepreneurs in scaling their ventures.

This historic deal marks a pivotal moment for Pakistani startups, demonstrating the potential for innovation and growth within the country’s entrepreneurial ecosystem.

As Shark Tank Pakistan continues to spotlight transformative ideas and businesses, it paves the way for future success stories in the region.