Startups updates of Pakistan

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Pakistan's startups in 2021: $350mn raised across 81 deals


Ali Ahmed
04 Jan 2022

Pakistan’s startup sector witnessed the best year in 2021, as 81 deals worth $350 million were made, according to a Deal Flow Tracker by Invest2Innovate (i2i). The amount raised is more than 5x of what was raised in 2020 i.e. $65 million.

From 2015 to 2021, Pakistani startups raised $563.5 million, out of which 62% was raised last year alone showing the extent of shift in the funding landscape. Similar to other emerging markets, e-commerce, fintech and logistics attracted the most funding in 2021, revealed the data.

The Deal Flow Tracker by Invest2Innovate showcases investments made in Pakistani startups from 2015 to 2021.

Quarterly speaking, Pakistani startups raised $69 million in Q4 of 2021, less than what it did in Q3 i.e. $172.6 million, but still more than all of 2020 combined.

The top three biggest deals of 2021 were: Airlift ($85 million), Bazaar ($30 million), and Tajir ($17 million).

E-commerce emerged as the top-funded sector in 2021, attracting $202 million of funds raised in the year. Fintech was second on the list with $95 million funding raised in 2021, followed by trucking & logistics that grabbed $17.4 million.

Kalsoom Lakhani, the Founder and CEO of Invest2Innovate said "the funding landscape has shifted significantly with startups raising significantly larger rounds at pre-seed and seed than before”.

She added that startups raising in later rounds of funding i.e. Airlift, which raised $85 million in Series B funding, is ideally not an outlier but a signal for the future.

Talking about the emerging fintech sector, Kalsoom said that it opened up for the first time, thanks to regulatory changes made by the State Bank of Pakistan (SBP) and Securities and Exchange Commission of Pakistan (SECP) that allowed it to take off.

“This is only the beginning -- unicorn valuations are the first thing, but focus should also be on where exits will come because that will be a tipping point in this market,” she said.

Meanwhile, further analysis of the data generated by i2i’s Deal Flow tracker shows that 66.4% of the startups had a male founder, while only 1.1% of the startups were founded by female entrepreneurs, whereas, a little over 32% of the startups were co-founded by female entrepreneurs.

Mixed investment, i.e. including at least one local and one international investor, fuelled the largest number of startup deals (36) in Pakistan and most of the deals were made at the seed stage of investment i.e. $123mn.

However, international investors were able to make larger sizes of investments ($61.7,m), despite having fewer deals with Pakistani startups (20).

 

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Local startups raise $163m in January-March​

Kazim Alam
April 3, 2022


KARACHI: Pakistani startups raised $163 million in the first quarter of 2022, which is more than half of the total startup funding in the last calendar year.

According to Kalsoom Lakhani, founder of Invest2Innovate, a platform that supports early-stage enterprises, major chunks of this funding came from large seed rounds and Series B rounds. As such, these are indications of the trend that 2022 will quickly surpass last year’s figure of $350m.

The funding raised across 15 deals in January-March is seven times higher than the amount generated in the same quarter of 2021 in which the startups attracted $22.2m.

In 272 deals, local startups have raised $728m since 2015.

Top-funded sectors in January-March were e-commerce ($202m), fintech ($17m) and trucking/logistics ($13m).

The average ticket size was $32m in e-commerce versus $5.8m in fintech in the latest quarter.
As for the investor type, “mixed” topped the list with the contribution of $122m across seven deals. A “mixed” deal is one in which at least one local investor and one international investor take part. The “international” category of investors brought in $36m in three deals while the “local” ones contributed $850,000 to four deals.

The top three deals in terms of the amount raised were Bazaar ($70m in Series B), Retailo ($36m in Series A) and Jugnu ($22.5m in Series A). The same three deals also constituted the top e-commerce deals for the January-March quarter.

“The fact that B2B e-commerce players raised later-stage rounds is a strong signal for the Pakistan market, especially given the concerns around ‘cooling-off’ or a dearth of growth-stage capital. Fintech also did well this quarter, albeit mainly via earlier-stage deals, like NayaPay’s $13m seed,” said Ms Lakhani in a social media post.

The top fintech deals in the first quarter were NayaPay ($13m in seed), Taro ($3.5m in pre-seed) and Metric ($900,000 in pre-seed).

As for the amount raised by stage, Series B funding topped the list with $70m in one deal. It was followed by the Series A rounds of $58.5m in two deals. As much as $29m was invested in seed rounds across five deals. Another five startups attracted $5.3m at the pre-seed stage during the last quarter.

Of the total funding amounting to $163m, female-cofounded startups received only $3.9m while male-founded startups got the rest of $159m.

According to the Pakistan Startup Ecosystem Report 2021, recent years have seen an increasing shift in how investors in developed economies have sought to broaden their holdings to emerging and frontier markets, including Pakistan. “In part, the strides made by the ecosystem can be attributed to a more facilitative policy regime,” it added.

Published in Dawn, April 3rd, 2022

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10Pearls to host Artificial Intelligence summit in Islamabad​

Dawn.com
February 21, 2023

Digital technology company 10Pearls announced on Tuesday that registrations have now opened for its Artificial Intelligence conference set to be held at the Pak-China Friendship Centre in Islamabad on Feb 25.

The AI summit, which was first held in 2019, aims to share the latest developments in AI, recognise innovations by emerging entrepreneurs and have conversations with leading international and local experts, the company said in a press release.

More than 30 speakers are participating in this year’s summit which will include panel discussions and workshops.

The company said entrance will be free, and interested people can register for the conference on its website.

The AI summit will feature three panel discussions — AI Disruption in the Startup Ecosystem, Explainable AI & Healthcare 5.0 and GPT-3: Navigating the Crossroads of Technology and Humanity.

Some of the talks held at the conference will be Cybersecurity Gets Smart, AI & National Governance, Impact of AI in the Fintech Space and Optimisation of BizOps through AI.

It will also feature workshops on the latest AI tech and showcase products and prototype demos by emerging AI startups.

Syeda Sana Hussain, senior director, people and programmes at 10Pearls, said the summit “provides a platform to share knowledge, power discourse on cognitive technologies, showcase AI-based innovations, and enable a network of like-minded peers and mentors”.

 

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10Pearls to host Artificial Intelligence summit in Islamabad​

Dawn.com
February 21, 2023

Digital technology company 10Pearls announced on Tuesday that registrations have now opened for its Artificial Intelligence conference set to be held at the Pak-China Friendship Centre in Islamabad on Feb 25.

The AI summit, which was first held in 2019, aims to share the latest developments in AI, recognise innovations by emerging entrepreneurs and have conversations with leading international and local experts, the company said in a press release.

More than 30 speakers are participating in this year’s summit which will include panel discussions and workshops.

The company said entrance will be free, and interested people can register for the conference on its website.

The AI summit will feature three panel discussions — AI Disruption in the Startup Ecosystem, Explainable AI & Healthcare 5.0 and GPT-3: Navigating the Crossroads of Technology and Humanity.

Some of the talks held at the conference will be Cybersecurity Gets Smart, AI & National Governance, Impact of AI in the Fintech Space and Optimisation of BizOps through AI.

It will also feature workshops on the latest AI tech and showcase products and prototype demos by emerging AI startups.

Syeda Sana Hussain, senior director, people and programmes at 10Pearls, said the summit “provides a platform to share knowledge, power discourse on cognitive technologies, showcase AI-based innovations, and enable a network of like-minded peers and mentors”.

This year will be horrible for our startups. Let's pray that they will be able to survive this year.

 

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Pakistani fintech startup Trukkr raises $6.4m, gets lending licence​

Reuters
March 7, 2023

Trukkr, a fintech platform for Pakistan’s trucking industry, said on Tuesday it had raised $6.4 million in a funding round and also received a non-banking financial company (NBFC) licence.

Trukkr offers small and medium-sized trucking companies a transport management system and supply chain solutions, and is unique in providing fintech to digitise the largely unbanked and undocumented industry.

The seed funding round was led by US-based Accion Venture Lab and London-based Sturgeon Capital. Haitou Global, Al Zayani Venture Capital and investor Peter Findley also participated in the round, Trukkr said in a statement.

The company’s business model is similar to Kargo in Indonesia, Solvento in Mexico and Kobo 360 in Africa, but has been adapted to the local market.

Trukkr said less than five per cent of trucking companies using its platform have access to financial services, often having to wait up to 90 days for payments and leaving them unable to cover expenses such as fuel, tolls and truck maintenance.

Sheryar Bawany, Trukkr CEO and co-founder, told Reuters that it was looking to launch financial products at a “reasonable risk-adjusted spread” to the benchmark Karachi Interbank Offered Rate (KIBOR).

Co-founder Mishal Adamjee said there are some 20,000 drivers on Trukkr’s platform, servicing 100 of the biggest companies in the country, including Shan Foods, Artistic Milliners, International Industries Limited and Lucky Cement.

Adamjee told Reuters that Pakistan’s $35-billion-a-year trucking industry is growing at 10pc annually despite limited rail and water freight infrastructure.

Investor Accion Venture Lab said the Covid pandemic had shown how much the world relied on global supply chains.

“We want to bet on a company striving to tackle inefficiencies in a market filled with opportunities,” it said in the statement.

According to the Board of Investment, projected demand for freight transport will double by 2025 and increase six-fold by 2050 to 600bn freight tonnes-kilometre, particularly as the China-Pakistan Economic Corridor kicks in.

Other freight marketplace startups in the country include Truck It In, BridgeLinx and Freightix.

 

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Pakistan’s financial platform Abhi raises Rs2bn Sukuk bond, a ‘first in MENAP’​

• Demand for bond exceeded expectations, says Abhi

BR
May 12, 2023

Pakistan’s financial platform Abhi raised the first-ever Sukuk bond for a fintech in the Middle East, Africa and Pakistan (MENAP) region, it announced on Friday. The bond worth Rs2 billion ($7.1 million) potentially opens a new funding line for startups that have struggled to attract funds in recent months.

The Karachi-based startup, which allows salaried employees to access funds before their payday, said demand for the Sukuk exceeded expectations, with subscriptions reaching twice the anticipated amount due to the company’s strong credit ratings, creditworthiness and profitability.

“We are honored to have the support of Pakistan Credit Rating Agency (PACRA) and all the investors to launch this first-of-a-kind Sukuk,” Omair Ansari, CEO and co-founder of Abhi, was quoted as saying in the statement.

“With this new funding, we can help ease the financial burden on struggling companies and provide much-needed relief through working capital financing during these challenging times,” Ansari added.

Abhi’s platform enables employees of its partners to withdraw salary advances based on their accrued wages at any time. The fintech funds these advances, and hence, it has no effect on partner employer’s balance sheets and repayments are deducted from the employee’s salary.

In 2022, PACRA assigned a long-term instrument rating of ‘AA’ and a short-term rating of ‘A1+’ to Abhi, which enabled the fintech to issue the Islamic bonds.

Abhi said the successful issuance of Sukuk, a financial instrument complying with Islamic law, is a significant achievement for the company, and the broader financial industry in Pakistan.

“It represents a new era of financial innovation in the country and is expected to have a positive impact on the economy,” it said.

The startup said the bond issuance immediately follows its qualification for the international selection panel (ISP) by Endeavor, and its selection by Hub71 to boost expansion into the Middle East, where Abhi is partnering with companies to financially empower them and their employees.

Last year, Abhi said it secured $17 million in a Series A fund-raising round led by international venture capital (VC) firm Speedinvest and supported by Global Ventures, VentureSouq, VEF, Sturgeon Capital, Rallycap and FJ Labs.

In June 2021, the company raised $2 million as seed investment, led by Vostok Emerging Finance. Later, in November, it said it had raised funds again, this time at a $40-million valuation, just months after introducing its business. The amount of funds raised in this round was not disclosed.

 

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Pakistan’s Neem secures $4mn credit facility from DNI Group​

BR Web Desk
November 5, 2024

Neem, an embedded finance platform in Pakistan, has secured an additional $4 million credit facility from South Africa-based DNI Group, a global investment firm operating in 32 countries and an existing partner/investor in Neem.

According to a statement on Tuesday, the credit facility will facilitate Neem, a Karachi-based startup, to expand Paymenow, its earned wage access solution, across Pakistan.

“This partnership marks a pivotal step in advancing financial wellness for Pakistan’s salaried workforce,” it added.

Neem said that with over 60 million employed workforce in Pakistan, many working in essential sectors face substantial financial pressure between paydays with limited financial tools available to assist.

The startup believes that Paymenow offers a Shariah-compliant alternative. “By enabling employees to access up to 50% of their salary when they need it most, Neem Paymenow provides a debt-free service to bridge financial gaps before payday,” it said.

“Our investment in Neem Paymenow aligns with our core principles of financial inclusion and impactful support to drive meaningful change,” Ziyaad Manie, Chief Strategy Officer of DNI Group, was quoted as saying.

“We’re thrilled to back Neem in scaling this unique solution that directly benefits people.”

Neem believed that amid a slowdown in investment flows over the past year in Pakistan, the latest funding signals renewed confidence of foreign investors in Pakistan’s market.

“The partnership and investment from the DNI Group, a team of seasoned operators with global expertise, serve as a powerful testament to our market potential,” said Naeem Zamindar, co-founder of Neem.

“It showcases their confidence in the Neem Paymenow team’s strong execution capabilities, and, above all, our shared vision of empowering financial wellness for businesses and people in Pakistan,” he added.

The startup said that “this strategic investment not only supports Neem’s mission of financial wellness for all but also signals to the market the growing importance of ethical and inclusive financial solutions for underserved segments”.

In June 2023, DNI Group invested $1 million in Neem as part of a strategic partnership, with the aim of “fostering innovation and growth in the embedded finance space” and “transforming the financial landscape in Pakistan”.