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Pakistani Tech Startups Attract Record VC Funding in First Half of 2022
Technology startups in Pakistan received record $249 million funding during January-June 2022, up a whopping 171% from the same period last year. A total of 35 deals closed, up 6% from the first half of 2021. July 2022 saw a maiden investment from Sequoia Capital which is considered among the top venture capital firms headquartered in Silicon Valley, California. Last year was a banner year for Pakistani startups with $310 million venture capital investments.
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| Venture Capital Investments in MENAPT Region 1H/22. Source: Magnitt |
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| Soaring VC Investments in Pakistani Startups. Source: Bloomberg |
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| Venture Capital Investments in MENAPT Region 1H/22. Source: Magnitt |
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| Pakistan Technology Exports. Source: Arif Habib |
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Comment by Riaz Haq on July 30, 2022 at 9:33am
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ibex. Pakistan which is also a subsidiary of TRG (The Resource Group) has announced that it will add a new, state-of-the-art, 500 Seat Facility in Karachi to cater to the expansion of its export of business process outsourcing services for some of its largest US-based customers in the retail and financial services sectors.
https://propakistani.pk/2022/07/30/ibex-pakistan-adds-state-of-the-...
The facility is expected to be in production by end of the year and will house roughly 800 professionals entirely geared toward the export of IT-enabled services.
“Our largest customers continue to have a positive view of the quality of our human resources, particularly for back-office and call center services from Pakistan”, said Nadeem Elahi Country Manager for ibex. Pakistan, Middle East & North Africa.
He added, “We are extremely excited to continue our growth, particularly in Karachi where we continue to source top-quality people. We plan to hire over 1,000 customer services professionals in the next 3 months in Karachi in both call center, back-office, and chat services geared towards our international customers.”
“I strongly believe that in a difficult time like this for Pakistan, IT and IT enabled services can still continue to grow strongly, and play a major role in the diversification of exports of the country,” said Nadeem.
Nadeem further added, “ ibex. is offering highly attractive packages of an average over PKR 80,000 per month. The customer services industry is a great starter to any young professional’s career as it offers an excellent opportunity to build one’s personal communication and professional skills. Therefore, I strongly encourage everyone seeking a good opportunity to visit our website and apply immediately”.
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Ex #RBI Gov R. Rajan: Turning #Muslims Into "2nd Class Citizens" Will Divide #India. Warning against majoritarianism, he cited #SriLanka as an example of what happens when politicians try to deflect a job crisis by targeting minorities. #Modi #Islamophobia https://www.ndtv.com/india-news/turning-minority-into-2nd-class-citizens-will-divide-india-raghuram-rajan-3209792
Former Reserve Bank of India Governor Raghuram Rajan on Saturday said India's future lies in strengthening liberal democracy and its institutions as it is essential for achieving economic growth.
Warning against majoritarianism, he said Sri Lanka was an example of what happens when a country's politicians try to deflect a job crisis by targeting minorities.
Speaking at the 5th conclave of All India Professionals Congress, a wing of the Congress party, in Raipur, he said any attempt to turn a large minority into "second class citizens" will divide the country.
Mr Rajan was speaking on the topic 'Why liberal democracy is needed for India's economic development'.
".What is happening to liberal democracy in this country and is it really that necessary for Indian development? ... We absolutely must strengthen it. There is a feeling among some quarters in India today that democracy holds back India ... India needs strong, even authoritarian, leadership with few checks and balances on it to grow and we seem to be drifting in this direction," Mr Rajan said.
"I believe this argument is totally wrong. It's based on an outdated model of development that emphasizes goods and capital, not people and ideas," said the former chief economist of the International Monetary Fund.
The under-performance of the country in terms of economic growth "seems to indicate the path we are going on needs rethinking," he said.
The former RBI governor further said that "our future lies in strengthening our liberal democracy and its institutions, not weakening them, and this is in fact essential for our growth."
Elaborating on why majoritarian authoritarianism must be defeated, he said any attempt to "make second class citizens of a large minority will divide the country and create internal resentment." It will also make the country vulnerable to foreign meddling, Me Rajan added.
Referring to the ongoing crisis in Sri Lanka, he said the island nation was seeing the "consequences when a country's politicians try to deflect from the inability to create jobs by attacking a minority." This does not lead to any good, he said.
Liberalism was not an entire religion and the essence of every major religion was to seek out that which is good in everyone, which, in many ways, was also the essence of liberal democracy, Mr Rajan said.
Claiming that India's slow growth was not just due to the COVID-19 pandemic, Mr Rajan said the country's underperformance predated it.
"Indeed for about a decade, probably since the onset of the global financial crisis, we haven't been doing as well as we could. The key measure of this underperformance is our inability to create the good jobs that our youth need," the former RBI governor said.
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Ex #RBI Gov R. Rajan: Turning #Muslims Into "2nd Class Citizens" Will Divide #India. Warning against majoritarianism, he cited #SriLanka as an example of what happens when politicians try to deflect a job crisis by targeting minorities. #Modi #Islamophobia https://www.ndtv.com/india-news/turning-minority-into-2nd-class-citizens-will-divide-india-raghuram-rajan-3209792
Citing the strident protests against the Centre's 'Agniveer' military recruitment scheme, Mr Rajan said it suggested how hungry the youths were for jobs.
"Just a while ago you saw 12.5 million applicants for 35,000 railway jobs. It is particularly worrisome when India has a scarcity of jobs even when so many women are not working outside their homes. India's female labour force participation is among the lowest in G-20 at 20.3 percent as in 2019," he pointed out.
Talking about the "vision of growth" of the current government led by Prime Minister Narendra Modi, he said it centres around the term 'atmanirbhar' or self-reliance.
"Now, to the extent it emphasizes better connectivity, better logistics, better roads and devotes more resources to it, in some way this (atmanirbhar vision) seems the continuation of the past reformed decades. And that's good," he said.
But, the former RBI governor said, in many ways a look at what 'atmanirbhar' is trying to achieve takes one back to an early and failed past where the focus was on physical capital and not human capital, on protection and subsidies and not on liberalization, on choosing favourites to win rather than letting the most capable succeed.
Asserting that there was a misplaced sense of priorities, Mr Rajan said the nation was not spending enough on education, with tragic consequences.
"Many (children) not having been to school for two years are dropping out. Their human capital, which is their and our most important asset in the coming years, is something we are neglecting. We are failing them by not devoting enough resources to remedial education," Mr Rajan said.
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Pakistan, China aim to boost tech cooperation
Ink Letter of Intent to create world-class technology ecosystem
https://tribune.com.pk/story/2369046/pakistan-china-aim-to-boost-te...
Shenyang Economic and Technological Development Area (Seda) of China and the Special Technology Zones Authority (STZA) of Pakistan have signed a Letter of Intent (LOI) to boost cooperation in technology sector between the two organisations.
Established in 1988, Seda is a production hub of major biotech and automobile organisations including the BMW Group, Neusoft, Pfizer, NCR and Ikea.
Speaking to a virtual ceremony, Seda’s Director of Management Committee Zhao Yongsheng highlighted the company’s successes, according to a press release issued on Monday.
Seda hosts the largest manufacturing facility of BMW in the world, while 84 Fortune 500 companies from all over the globe are operating in Seda’s hi-tech manufacturing, automotive, research and development areas.
Zhao hailed the strong relationship between China and Pakistan and pledged his organisation’s support and cooperation with the STZA in the areas of innovation, entrepreneurship, human capital development and digital economy through the integration of science, technology and economy.
Speaking on the occasion, STZA Chairman Amer Hashmi stated that due to its rapid growth, Pakistan’s technology sector offered globally competitive opportunities for Chinese partners and investors.
He highlighted that Pakistan had a unique demographic advantage, as almost 64% of its population consisted of youth, and saw great potential in working with Seda through the STZA’s dedicated China Desk to streamline cooperation with the Chinese technology sector.
He praised Pakistan’s Ambassador to China Moinul Haque and the leadership of Seda for enabling cooperation between the STZA and Seda and expressed his support for implementing the shared vision.
Shenyang Municipal People’s Republic Vice Mayor Gao Wei stated that China and Pakistan were strategic partners, with a long history of peaceful cooperation in various development sectors.
He explained that Shenyang was creating hubs for scientific, industrial and technological growth, with special focus on fintech.
He vowed to support cooperation between Seda and the STZA, saying that the technology sector represented a new avenue for potential cooperation between the two friendly nations.
Ambassador Haque highlighted the longstanding ties between the two countries and appreciated the STZA chairman and his team for their efforts to foster the knowledge economy in Pakistan.
He affirmed the commitment of Pakistan’s embassy in China to facilitating the ongoing engagements between the STZA and the technology ecosystem in China and called the LOI a step forward towards strengthening linkages and relationship between the two countries.
He hoped that both sides would increase their cooperation under a joint working group to practically implement the shared vision of creating a world-class technology ecosystem in Pakistan, creating jobs and empowering the youth through the technology-led economic transformation.
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Maersk and SEED Ventures collaborate to improve agricultural exports from Pakistan
July 28, 2022
By Jack Donnelly
https://www.porttechnology.org/news/maersk-and-seed-ventures-collab...
Maersk Pakistan Private Limited (Maersk) and SEED Ventures have signed a Memorandum of Understanding (MoU) to launch the Pakistan Agripreneurship Challenge (PAC).
PAC is an Agri-value chain intervention challenge that aims to improve the quality of Pakistan’s agricultural produce and explore new global markets for Pakistan’s agriculture exporters.
In 2020, Pakistan produced 5.6 million metric tons of vegetables, of which the resulting export produce amounted to $4.92 million. In contrast, the Netherlands producing 5.3 million metric tons of vegetables, could export $31 billion worth of produce.
The comparison, Maersk argues, showcases Pakistan is not meeting its export potential for vegetables.
Issues pertaining to storage, transport & distribution are significant roadblocks for the Agri sector, and Maersk claims it is evident that a holistic value chain intervention is required for the post-harvest category.
PAC is an agripreneurship challenge that calls upon Agri ventures, innovators, farmers and agriculture students to participate and develop innovative solutions to solve the post-harvest challenges in Pakistan for vegetable produce.
The shortlisted finalists from the challenge will be given the opportunity to realise their innovative agripreneurship solutions by Maersk and SEED.
The 20 July collaboration signed between SEED Ventures and Maersk aims to identify potential solutions to support Pakistan in meeting its export potential.
Hasan Faraz, Managing Director, Maersk Pakistan, commented: “At Maersk, our purpose is to improve life for all by integrating the world. We are delighted to partner with SEED Ventures and contribute to improving Pakistan’s agricultural sector.”
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The United Arab Emirates is planning to invest $1 billion in Pakistani companies spanning various sectors, state-run news agency WAM reported Friday.
The investments will cover fields including gas, energy infrastructure, renewable energy, health care, biotechnology, agricultural technology, logistics, digital communications, e-commerce and financial services, WAM said.
https://www.bloomberg.com/news/articles/2022-08-05/uae-to-invest-1-...
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More startups to emerge
Food delivery platform CEO says young entrepreneurs will learn from crisis
Usman Hanif
https://tribune.com.pk/story/2370258/more-startups-to-emerge
The current crisis in the startup sector of Pakistan will help new entrepreneurs emerge on account of their learning curve during the economic downturn. The present-day situation is not alarming but is instead an opportunity out of which more startups will emerge.
These views were expressed by Foodpanda Pakistan CEO Muntaqa Peracha while talking about the prospects of startups in an interview with The Express Tribune.
“Since now you have different problems to solve, the best thing about startups is that they disrupt the existing way of thinking. So, in these circumstances, many other companies will come out like they did during Covid,” he said.
The unsettled domestic economic situation is because the global situation is tense, he noted.
“Pakistan is not suffering because we have done something wrong, we are suffering because the whole world is suffering. Our technology industry is still very young and will take time to develop. In every startup, your cycle goes up, then one day you are down and then you pick up. In these lows and highs, we have some organisations that fold, some organisations that get acquired by others, some organisations that will go from strength to strength through consolidation,” he said.
The post-Covid landscape will bring about many changes. The start-up industry will now see more young people, probably many of whom have worked in companies like Airlift, Swvl and other organisations. These budding entrepreneurs have an experience of how to raise money, how to quickly deploy that money, how to scale up very quickly and how to grow rapidly, he added.
The second benefit from the challenges they have faced is that entrepreneurs will have to change the traditional methods of operating a business. The industry as a whole will benefit from this drive towards change. Despite the fact that many startups have shut down operations, “we are sure the industry will bounce back from this and that recovery is only a matter of time.”
This sentiment was echoed by Universal Service Fund (USF) former CEO Parvez Iftikhar, who said that the startup sector will certainly bounce back in due course.
“Such setbacks are normal, in fact good, for any growing endeavour. They provide an opportunity to learn. Growth is never linear, it’s always a zig zag”, he added.
It is evident that economic activity has slowed down both globally and in Pakistan. Investors may also find it challenging to raise funds as a result of the recent economic slowdown in financial markets, said JS Global ICT analyst Waqas Ghani Kukaswadia.
On the flip side, it is also a fact that Pakistan is a large consumer market and there will always be lots of opportunities for entrepreneurs.
“Entrepreneurs will just have to modify their approach when it comes to Pakistan. We have seen this recently with two major startup ventures going south that it doesn’t matter how amazing a concept is or how much capital a business has been able to raise. If the founders of a startup are unable to comprehend how the typical Pakistani market works and how to stay afloat, startups will continue to face difficulties. Only unique concepts and funding arrangements do not ensure a company’s long-term success,” he said.
Startups are a relatively young industry in Pakistan. “We have investors with little or no experience in emerging markets which operate differently than developed markets,” said Foodpanda CEO.
On the flip side, young people who have founded companies and run them have not been exposed to proper mentoring and this has resulted in glaring blindspots. As a consequence, while some people have succeeded, others have not been able to sustain themselves in the long run. Crucially, there may have been more work done on the fundamentals if entrepreneurs starting out in the industry had gained more experience, said Muntaqa Peracha.
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More startups to emerge
Food delivery platform CEO says young entrepreneurs will learn from crisis
Usman Hanif
https://tribune.com.pk/story/2370258/more-startups-to-emerge
Startups are a relatively young industry in Pakistan. “We have investors with little or no experience in emerging markets which operate differently than developed markets,” said Foodpanda CEO.
On the flip side, young people who have founded companies and run them have not been exposed to proper mentoring and this has resulted in glaring blindspots. As a consequence, while some people have succeeded, others have not been able to sustain themselves in the long run. Crucially, there may have been more work done on the fundamentals if entrepreneurs starting out in the industry had gained more experience, said Muntaqa Peracha.
In order to draw in more foreign investment, the government and the State Bank have relaxed rules for attracting investment in tech-based startups and are working on regulations that will permit investors to repatriate profits and capital and ease overall corporate operations, Waqas Ghani said.
Pakistani economy will undoubtedly benefit from fostering entrepreneurship in a balanced way. There is a lot of work being done on the digital banking side already and there is definitely hope that entrepreneurship will rise again, Waqas added.
“It was difficult to predict that things will change this rapidly in the startup industry. But now people have experienced and understood the worst-case scenario. At that time, no one had any idea of the worst-case scenario. As they were raising money at the time, from mid-2020 to the first quarter of 2022, everything seemed fine. Now, people know that this is the worst-case scenario and we have to prepare for it while growing at the same time,” Muntaqa Peracha said.
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If you like IT, put a ring on IT
The recent fall in IT exports, Pakistan’s great new hope, is a reality check posing a number of biting questions for the industry and authorities
https://profit.pakistantoday.com.pk/2022/07/31/if-you-like-it-put-a...
“What gave India the respect that they are interacting with the world today? It was their IT industry, which is why you people (Pakistani IT industry) are extra important,” Abdul Razak Dawood, the then Adviser for Commerce and Investment, said in January while praising the industry in his address to the Board of Investment (BOI) IT roundtable conference.
The optimism from back then may have fallen flat in recent times as IT exports and services for May 2022 were recorded at $189 million – decreasing by 27% compared to April 2022 and 8% from May 2021. The final numbers are still awaited, but the financial year 2021-22’s export target for the sector, around $3.7 billion, is likely to be missed by a massive $1 billion.
Many experts anticipated the end of what has been a dream run for the IT sector, primarily because of the unstable rupee and demand slowdown in the two key markets of North America and Europe.
“The post-Covid boom in the IT sector was partly because central banks across jurisdictions printed money and governments announced schemes to promote business activity. This led to demand creation, which translated into greater interest in the country’s IT sector by foreign businesses,” Asad Ghauri, President Asia-Pacific, and Group MD Europe at NetSol Technologies Inc, told Profit.
“Now, the focus is on contractionary measures, and as the funding dries up, demand is likely to plunge, resulting in a difficult next few months for the industry.” Ghauri added.
However, the industry has a consensus on the issue that these temporary jitters can do some permanent damage if the structural and policy flaws of the sector are not addressed.
IT sector treated like a stepchild?
The reservations of the industry stem from the lack of policy continuity and initiative by the government. An example is the reversal of the tax-exempt status of the sector in March 2021.
“IT industry, unlike traditional industries, operates differently. Changing the tax regime in the mid of the fiscal year, despite the original commitment till 2025, creates not only uncertainty and a state of panic about inconsistent policies but also raises questions about the understanding of the government about the gravity of the situation of how it will jeopardize the growth,” Pakistan Software House Association said in a statement on their website.
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Faseeh Mangi
@FaseehMangi
PayPal founder and billionaire investor Peter Thiel invests in Pakistan's startup space for the first time
Thiel participates in PriceOye's round
It sells consumer electronics such as mobile phones and raised $8 million in seed funding
https://twitter.com/FaseehMangi/status/1564530785326997504?s=20&...
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A Pakistani startup, which has taken inspiration from China’s JD.com and India’s Flipkart to build a managed marketplace of electronics products, said on Tuesday it has raised seed funding from scores of investors including PayPal founder Peter Thiel.
Launched in March 2020 — just two weeks before the COVID-19 pandemic ravaged the world — the Islamabad-based startup PriceOye offers a range of electronics products, including smartphones, TVs and home appliances.
Its seed funding round was led by JAM Fund, a venture capital firm by Tinder founder Justin Mateen. The institutional funding round also included participation of Beenext, DG Daiwa, Mantis VC, HOF Capital, Jet.com investor Palm Drive Capital and Atlas Ventures, among others. Angels including Thiel, Immad Akhud of Mercury Bank, and Asif Keshodia of Souq also participated in the round — alongside previous investors Fatima Gobi Ventures, SOSV, and Artistic Ventures. This is Thiel’s maiden investment in Pakistan.
PriceOye has served 45 million unique users in Pakistan in the last two years, covering 37.5% of the country’s total internet userbase, Adnan Shaffi, co-founder and CEO of the startup, told TechCrunch in an interview.
“We are the second most visited shopping website in the entire country, with over two and a half million monthly active users coming on the platform, doing research using our product recommendation engine, and then getting to know about different products,” he said.
After exiting two startups, Adan and his brother Adeel Shaffi got the idea of launching PriceOye when they were doing “a lot of island hopping” in Southeast Asia. The duo looked at several startups in Indonesia and India and found the Asian markets were seeing similar consumer internet trends play out — just at a different pace. They built a thesis that Pakistan will see similar adoption of consumer internet services in the next four to five years.
https://techcrunch.com/2022/08/29/pakistan-priceoye-pk-7-9-million-...
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