Pakistani Tech Startups Attract Record VC Funding in First Half of 2022

[RiazHaq]

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 ...

www.southasiainvestor.com

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.

Venture Capital Investments in MENAPT Region 1H/22. Source: Magnitt

Sequoia Capital and Kleiner Perkins co-led $17.6 million seed round in Islamabad-based fintech startup DBank this month. DBank has been founded by Tania Aidrus and Khurram Jamali, both of whom have studied the challenges the unbanked population faces closely at their previous stint at Google, where they worked on payments rails for the company’s Next Billion Users initiative, according to Tech Crunch.

Soaring VC Investments in Pakistani Startups. Source: Bloomberg

Pakistani startups set a record in 2021 with $310 million venture capital investments, more than the previous six years combined, according to Bloomberg. The South Asian nation has seen a wave of investments from many global venture capital firms, including Sequoia Capital and Kleiner Perkins -- early investors in Google and Amazon.com Inc.

Venture Capital Investments in MENAPT Region 1H/22. Source: Magnitt

Pakistan's technology sector is in the midst of an unprecedented boom. It is being fueled by the country's growing human capital and rising investments in technology startups. A tweet by Swedish fund manager Mattias Martinsson captured it well when he wrote, "Have followed Pakistan for 15 years. Can't recall any time time when VC activity was anywhere near we've seen in the last few months. Impact of reforms kicking in?". New laws have made it easier to create startups and offered greater protection to investors. Digital infrastructure has expanded with over 100 million smartphones and an equal number of broadband subscriptions.

With expanding Internet infrastructure and rapidly growing user base, Pakistan is now seeing robust growth in venture money pouring into technology startups. Pakistani startups have already attracted more than $310 million in funding in FY 2021-22, more funds than all the money raised by Pakistani startups in their entire history. A recent example is Kleiner Perkins, a top Silicon Valley venture capital investment firm, that led a series A round of $17 million investment into Pakistani start-up Tajir. The startup operates an online marketplace for small store merchants in Pakistan. The announcement came via a tweet by Mamoon Hamid, a Pakistani-American Managing Partner at Kleiner Perkins who led the investment. Last year, Tajir raised a $1.8 million seed round. The company's revenue has increased by 10x since its seed round. Another example is Sequoia Capital's first investment in Pakistan this month.

Pakistan Technology Exports. Source: Arif Habib

Pakistan's technology exports are experiencing rapid growth in double digits over the last decade. Total technology exports jumped 22% to $2.6 billion in fiscal year 2021-22, as reported by Arif Habib Securities.

Pakistan University Enrollment Growth. Source: Encyclopedia of Higher Education

The foundation for Pakistan's digital transformation was laid with the higher education reform and telecommunications deregulation and investments starting in the year 2001 on President Musharraf's watch. With a huge increase in higher education funding, Higher Education Commission Chairman Dr. Ata ur Rehman succeeded in establishing 51 new universities during 2002-2008. As a result, university enrollment (which had reached only 275,000 from 1947 to 2003) soared to about 800,000 in 2008. This helped build a significant human capital that drove the IT revolution in Pakistan.

Please watch the following video presentation for more details on Pakistan's technology startup ecosystem:

Related Links:

Haq's Musings

South Asia Investor Review

Unprecedented Tech Boom in Pakistan

State Bank of Pakistan Plans Digital Currency By 2025

Pakistan Broadband Subscriptions Pass 100 Million

Brothers From Rural Pakistan Teaching AI to American High Schoolers

Pakistan's Computer Services Exports Jump 26% Amid Coronavirus Lockdown

Pakistan Gig Economy Among World's Fastest Growing

Digital BRI and 5G in Pakistan

Pakistan's Demographic Dividend

Pakistan EdTech and FinTech Startups

State Bank Targets Fully Digital Economy in Pakistan

Campaign of Fear Against CPEC

Fintech Revolution in Pakistan

E-Commerce in Pakistan

2021: A Banner Year For Pakistani Tech Startups

FMCG Boom in Pakistan

Belt Road Forum 2019

Fiber Network Growth in Pakistan

Riaz Haq's Youtube Channel

PakAlumni: Pakistani Social Network

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 ...

www.southasiainvestor.com

 

[Corruptistan]

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 ...

www.southasiainvestor.com

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.

​

Venture Capital Investments in MENAPT Region 1H/22. Source: Magnitt

Sequoia Capital and Kleiner Perkins co-led $17.6 million seed round in Islamabad-based fintech startup DBank this month. DBank has been founded by Tania Aidrus and Khurram Jamali, both of whom have studied the challenges the unbanked population faces closely at their previous stint at Google, where they worked on payments rails for the company’s Next Billion Users initiative, according to Tech Crunch.

​

Soaring VC Investments in Pakistani Startups. Source: Bloomberg

Pakistani startups set a record in 2021 with $310 million venture capital investments, more than the previous six years combined, according to Bloomberg. The South Asian nation has seen a wave of investments from many global venture capital firms, including Sequoia Capital and Kleiner Perkins -- early investors in Google and Amazon.com Inc.

​

Venture Capital Investments in MENAPT Region 1H/22. Source: Magnitt

Pakistan's technology sector is in the midst of an unprecedented boom. It is being fueled by the country's growing human capital and rising investments in technology startups. A tweet by Swedish fund manager Mattias Martinsson captured it well when he wrote, "Have followed Pakistan for 15 years. Can't recall any time time when VC activity was anywhere near we've seen in the last few months. Impact of reforms kicking in?". New laws have made it easier to create startups and offered greater protection to investors. Digital infrastructure has expanded with over 100 million smartphones and an equal number of broadband subscriptions.

With expanding Internet infrastructure and rapidly growing user base, Pakistan is now seeing robust growth in venture money pouring into technology startups. Pakistani startups have already attracted more than $310 million in funding in FY 2021-22, more funds than all the money raised by Pakistani startups in their entire history. A recent example is Kleiner Perkins, a top Silicon Valley venture capital investment firm, that led a series A round of $17 million investment into Pakistani start-up Tajir. The startup operates an online marketplace for small store merchants in Pakistan. The announcement came via a tweet by Mamoon Hamid, a Pakistani-American Managing Partner at Kleiner Perkins who led the investment. Last year, Tajir raised a $1.8 million seed round. The company's revenue has increased by 10x since its seed round. Another example is Sequoia Capital's first investment in Pakistan this month.

​

Pakistan Technology Exports. Source: Arif Habib

Pakistan's technology exports are experiencing rapid growth in double digits over the last decade. Total technology exports jumped 22% to $2.6 billion in fiscal year 2021-22, as reported by Arif Habib Securities.

​

Pakistan University Enrollment Growth. Source: Encyclopedia of Higher Education

The foundation for Pakistan's digital transformation was laid with the higher education reform and telecommunications deregulation and investments starting in the year 2001 on President Musharraf's watch. With a huge increase in higher education funding, Higher Education Commission Chairman Dr. Ata ur Rehman succeeded in establishing 51 new universities during 2002-2008. As a result, university enrollment (which had reached only 275,000 from 1947 to 2003) soared to about 800,000 in 2008. This helped build a significant human capital that drove the IT revolution in Pakistan.

Please watch the following video presentation for more details on Pakistan's technology startup ecosystem:

Related Links:

Haq's Musings

South Asia Investor Review

Unprecedented Tech Boom in Pakistan

State Bank of Pakistan Plans Digital Currency By 2025

Pakistan Broadband Subscriptions Pass 100 Million

Brothers From Rural Pakistan Teaching AI to American High Schoolers

Pakistan's Computer Services Exports Jump 26% Amid Coronavirus Lockdown

Pakistan Gig Economy Among World's Fastest Growing

Digital BRI and 5G in Pakistan

Pakistan's Demographic Dividend

Pakistan EdTech and FinTech Startups

State Bank Targets Fully Digital Economy in Pakistan

Campaign of Fear Against CPEC

Fintech Revolution in Pakistan

E-Commerce in Pakistan

2021: A Banner Year For Pakistani Tech Startups

FMCG Boom in Pakistan

Belt Road Forum 2019

Fiber Network Growth in Pakistan

Riaz Haq's Youtube Channel

PakAlumni: Pakistani Social Network

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 ...

www.southasiainvestor.com

Not strange given the ever-growing percentage of Pakistanis within Pakistan that venture into that field whether by choice of education or due to the business opportunities that present itself.

This sector (as is the case of the overall private sector) is less prone to corruption and outside interference from the establishment, thus it makes it a much more interesting, safe and profitable sector to invest in within Pakistan, rather than the ineffective and corrupt public sector or sector where you need direct local involvement, say the mineral (unexplored mostly so far) sector.

Most serious long-term foreign investors would never invest in any public sector in Pakistan as things stand right now.

 

[_NOBODY_]

Not strange given the ever-growing percentage of Pakistanis within Pakistan that venture into that field whether by choice of education or due to the business opportunities that present itself.

This sector (as is the case of the overall private sector) is less prone to corruption and outside interference from the establishment, thus it makes it a much more interesting, safe and profitable sector to invest in within Pakistan, rather than the ineffective and corrupt public sector or sector where you need direct local involvement, say the mineral (unexplored mostly so far) sector.

Most serious long-term foreign investors would never invest in any public sector in Pakistan as things stand right now.

Do note that all of this happened during the global startup recession.

 

[Wood]

US Fed increasing interest rate is a terrible period for start ups in developing countries

 

[LakeHawk180]

US Fed increasing interest rate is a terrible period for start ups in developing countries

Yeah but I’d say it’s somewhat manageable in India as far as startup investments are concerned. Just last month (or May) delhivery pulled in 304mn USD. There are still atleast ~2-3 deals per month in india exceeding 249mn USD which is considered “record funding” in certain jurisdictions

 

[Flight of falcon]

Mash Allah good start.

 

[RiazHaq]

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.

ibex. Pakistan Adds State-of-the-Art 500 Seat Facility in Karachi to Cater to its Export Expansion

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

propakistani.pk

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”.

 

[SoulSpokesman]

@RiazHaq

Brofessor sb,

Congratulations, welcome trends. Investments like this could go a long way in meeting Pak's perennial savings and current account deficit issues.

Regards

 

[Black Tornado]

Yeah but I’d say it’s somewhat manageable in India as far as startup investments are concerned. Just last month (or May) delhivery pulled in 304mn USD. There are still atleast ~2-3 deals per month in india exceeding 249mn USD which is considered “record funding” in certain jurisdictions

We receive $40 bn a year in startup funding, we need it to reach $60 bn by 2025 to be able to have 250 unicorn startups from current 106, I read somewhere.

 

[RiazHaq]

#Pakistan’s #fintech #startup OneLoad secures $11 million in funding. This #investment round led by Sarmayacar and Shorooq Partners. Other investors include Gates Foundation and IFC. https://www.brecorder.com/news/40189369

The company said that "the strategic collaboration with regulated financial partners and banks has led to daily disbursements worth Rs10+ million, which created horizons of accelerated growth for numerous micro-retailers across the country."

OneLoad operates through its 40,000 agents and conducted about $100 million in transactions last year. The company wants to increase daily transaction to one million a day from the current level of up to 400,000, founder and CEO Muhammad Yar Hiraj was quoted as saying by Bloomberg.

Under digital products and payments, OneLoad offers mobile top-ups, internet packages, and media and entertainment services. Under banking access, OneLoad enables money transfers, utility bill payments, deposits and withdrawals for digital wallets, wallet account opening and biometric verification, and government-to-person (G2P) payments – in partnership with banks.

“We are excited to bring new partners to the company like Sarmayacar and Shorooq Partners,” Hiraj was quoted as saying in the PSX notice.

“Working with them brings valuable tech and venture capital expertise to the company and pushes us to continue to innovate and evolve with the regional and global markets. Our vision is to fully digitise the financial needs of the unbanked and the financially excluded masses in Pakistan," he said.

 

[RiazHaq]

StartUpBlink Report 2022: #Startup Ecosystem of #Karachi is ranked at number 291 globally, and shows a negative momentum decreasing -5 spots since 2021. Karachi also ranks at number 1 in #Pakistan, and 10 in #SouthAsia. #technology #Entrepreneurship https://www.startupblink.com/startup-ecosystem/karachi-pk

Karachi is an ideal place to locate for Ecommerce & Retail, Transportation and Marketing & Sales startups. As the most popular industries in Karachi, there is a sample of 12 Ecommerce & Retail startups in Karachi, 10 Transportation startups in Karachi, and 8 Marketing & Sales startups in Karachi, on the StartupBlink Map.
On the StartupBlink Global Startup Ecosystem Map there is also a sample of 53 startups in Karachi, no accelerators in Karachi, no coworking spaces in Karachi, no organizations in Karachi and no leaders in Karachi.

StartupBlink ranks the startup ecosystems of 100 countries and 1,000 cities. Download our latest Global Ecosystem Report.

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Karachi has been ranked among South Asia’s top ten start-up-friendly cities by the startup ecosystem rating website, Startup Blink, in its 2022 report.

Pakistan’s port city has broken India’s monopoly on the list by jumping up four ranks within a year to join the top ten cities.



While the other 9 cities are all in India, Karachi has reportedly surpassed Pakistan’s top city, Lahore, this year, as well as other cities that are considered to have startup-friendly environments.

However, on a global level, Karachi’s ranking has dropped by five places and is now at number 291.

Meanwhile, Lahore fell 48 places to the 305th rank internationally this year. Islamabad was ranked third in Pakistan and dropped one rank to 438th on the global list.

Overall, Pakistan’s ranking as a favorable environment for startups decreased by two places and it stood 76th globally.

It was also ranked second in South Asia and fourth among the Central Asia Regional Economics Corporation (CAREC) countries.

The report detailed that successful start-ups and digitization are of prime importance in Pakistan’s economic development.

Digital entrepreneurship and investment in startups got a boost in Pakistan during the pandemic, and startups were supported by improvements in broadband coverage and digital infrastructure, and a new framework for digital payments. Local IT companies also received tax incentives and exemptions through Special Technology Zones.

Pakistan has come a long way to strengthen its legal framework to promote digitization, according to the report, but still needs clarification on taxes and incentives for local investment.

The country’s climate of political chaos hinders the creation of stable policies and an environment of trust to actually strengthen its startup ecosystem, Start Blinkup detailed. Apart from this, increasing capital demand for emerging startups and the supply of experienced manpower are also causing concern.

To meet these needs, it is necessary for Pakistan to increase the capacity of the startup ecosystem to provide qualified and trained manpower amid the growing demand for capital for emerging start-ups.