Pakistan Tech Summit 2020 at Draper University in San Francisco Bay Area

Hundreds of Pakistanis and Pakistani-Americans attended Pakistan Tech Summit 2020 at Draper University in San Mateo, California on February 15, 2020. It was organized by Arzish Azam of Ejad Labs with sponsorships from JS Bank, Netsol, VisionX, Pakistan IT ministry, Pakistan National IT Board and Pakistan Software Exports Board. This event came after a recent report in Germany's Deutsche Welle (DW) by Miriam Partington who wrote in a story titled "Pakistan: The next big Asian market for tech startups?" that "Pakistan's young and tech-savvy population, market of over 220 million people and increasing levels of local capital are creating opportunities for tech entrepreneurs".

Pakistan Tech Summit:

At this conference, I was really encouraged by the presence of many young Pakistan entrepreneurs eager to realize the vision of Digital Pakistan. Enthusiasm is necessary but not sufficient. What is missing is serious attention to attract more risk capital to support these young enthusiastic entrepreneurs.  Unfortunately, I did not see any known Silicon Valley venture capitalists (VC) at the event. Recent McKinsey report on Pakistani startup ecosystem noted that per capita venture capital is just 6 cents, lower than 7 cents in Bangladesh and only a third of 18 cents in Nigeria. What Pakistan needs is a venture capital initiative along with digitization initiative.

Founders or cofounders of several Pakistani startups pitched their companies hoping to attract venture investors. Among the attendees were many young enthusiastic techies.

Najeeb Ghauri, Chairman of Netsol Technologies, made a pitch that focused on the opportunities presented to investors by Pakistan's growing young enthusiastic talent pool and large aspirational middle class population. JS Bank's Noman Azhar talked about his bank's fund that invests in Pakistani startups taking advantage of the government's Digital Pakistan Initiative. An example of their investment is e-challan systems in Islamabad and Peshawar.

Morning keynote speaker was Farrukh Mahboob of VisionX which offers custom-built digital products and mobile applications for businesses. Their digital solutions are tailored to clients’ needs and are powered by emerging technologies including artificial intelligence (AI), augmented and virtual reality (AR, VR).  VisionX clients includes Fortune 500 companies.

A number of startup pitches followed. Founders or co-founders of DontPort, Integry, Kumlaudi, SafePay, JoyCo and Social Pie pitched their ideas.

Examples of VC Funded Startups:

McKinsey report "Starting up: Unlocking entrepreneurship in Pakistan" has cited Daraz, Zameen, PakWheels, Tez Financial, Patari, AugmentCare and Sastaticket.  Monis Rahman, CEO of Rozee.pk, says this is an incomplete list. He personally knows about funds raised by the following companies that are missing from the McKinsey list:

Rozee.pk -- $9 Million across 3 rounds 

Finja -- $4.5 Million seed + bridge (working on $15 Million round) 

Airlift -- $12 Million Series A (working on $20 Million round)

Examples of VC Funded Pakistani Startups. Source: McKinsey

Lack of Venture Capital:

It was great to see many young Pakistan entrepreneurs eager to realize the vision of Digital Pakistan. Enthusiasm is necessary but not sufficient. What is missing is an enabling environment for startups to attract more risk capital to support these young enthusiastic entrepreneurs.  Unfortunately, I did not see any known Silicon Valley venture capitalists (VC) at the event. Recent McKinsey report on Pakistani startup ecosystem noted that per capita venture capital is just 6 cents, lower than 7 cents in Bangladesh and only a third of 18 cents in Nigeria. India's level of per capita is at $3.72 and UAE's $40 per capita VC investment is more than 10X India's.

Venture Capital Per Capita. Source: McKinsey


Need For Venture Investment Initiative:

Pakistan needs to have a venture capital initiative to ensure that Pakistani startups fully participate in  Digital Pakistan Initiative. Part of the venture capital initiative should create legal and policy framework to protect investors and facilitate their exit strategies. Pakistan government should invite  venture capitalists and offer to participate as a significant investor in professionally VC funds that invest in Pakistani startups. Experienced Pakistani VCs and entrepreneurs like Asad Jamal and Monis Rahman can be used as a resource to establish this venture investment initiative.

Enabling Startup Ecosystem. Source: McKinsey

Summary:

Recent "Pakistan Tech Summit 2020" at Draper University in San Francisco Bay Area attracted dozens of enthusiastic tech savvy young men and women ready with their startup pitches. It confirmed what Deutsche Welle's Miriam Partington recently reported in a story titled "Pakistan: The next big Asian market for tech startups?" in which she wrote: "Pakistan's young and tech-savvy population, market of over 220 million people and increasing levels of local capital are creating opportunities for tech entrepreneurs". Unfortunately, I did not see any known Silicon Valley venture capitalists (VC) at the event. Recent McKinsey report on Pakistani startup ecosystem noted that per capita venture capital is just 6 cents, lower than 7 cents in Bangladesh and only a third of 18 cents in Nigeria. India's level of per capita is at $3.72 and UAE's $40 per capita VC investment is more than 10X India's. Pakistan needs to have a venture capital initiative to ensure that Pakistani startups fully participate in  Digital Pakistan Initiative. Part of the venture capital initiative should create legal and policy framework to protect investors and facilitate their exit strategies. Pakistan government should invite  venture capitalists and offer to participate as a significant investor in professionally managed VC funds that invest in Pakistani startups. Experienced Pakistani VCs and entrepreneurs like Asad Jamal and Monis Rahman can be used as a resource to establish this venture investment initiative.

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Comment by Riaz Haq on February 29, 2020 at 11:22am

A high-profile panel discussion on Pakistan’s digital future attended by prominent players in the local digital industry was hosted by Serena hotels as part of its public diplomacy initiative called ‘Raabta’.


https://dailytimes.com.pk/567091/moot-highlights-challenges-faced-b...


The event titled ‘Re imagine our Digital Future – Preparing to Thrive or Survive?’ was hosted by raabta curator and prominent journalist Sidra Iqbal.


A lively and thought-provoking discussion was held about the challenges facing the local digital economy in face of its rapid expansion, and the challenges and opportunities this brings in terms of innovation, governance, job market, cyber risks, regulation and ease of doing business.

“The focus of the event is to discuss the potential benefits and costs arising from global digital technology changes and, importantly, anticipate public policy solutions to emerging problems that will shape the future of society and the economy for generations to come,” said Sidra Iqbal. “Change can come within a generation if managed properly, rather than waiting for millennia. We are asking if the policymakers going to be reactive to the digital revolution or take the bull by the horn and prepare an environment for the digital economy to thrive?”



The keynote speaker at the event was ‘Digital Pakistan’ initiative chief Tania Aidrus, who spoke about the five pillars that form the cornerstone of the government’s digital policy, which include access and connectivity, digital infrastructure, e Government and digital skilling. Tania said the response to the PM’s digital initiative was overwhelmingly good and it felt like a movement already. She said a lot is happening in the digital arena but it’s important to keep an end view in sight and take a strategic approach. She said the efforts at provincial and federal levels have to be synchronized to achieve the objectives on a broader scale. She said the internet is a democratizing force and digital allows equitable access to knowledge provided the affordability of digital infrastructure was enabled and commodities like the internet are not taxed as a luxury item.

The panel included prominent figures of the local digital landscape including GM of Careem Zeeshan Hasib Baig, MD Daraz.pk Ehsan Saya, CEO Foodpanda Nauman Sikandar Mirza, Chief Corporate and Enterprise Officer Jazz Ali Naseer, MD KPITB Dr Shahbaz Khan and Chief Business Support Officer U Microfinance Bank Sharmeen Niaz.



Zeeshan Hasib Baig said that Careem has enabled 500,000 jobs which shows that going digital will not take away jobs as some fear, however it will change the way we work and make it more efficient so the focus can be on better quality leading to productivity gains. He said digital companies like Careem are improving livelihoods, moreover they are allowing females much better mobility for work and leisure.

Ali Naseer from Jazz said “we need to change the lens of how we look at things and there needs to be a paradigm shift in our traditional processes to allow for digital to be effective lest we become redundant.” “Whilst we have 3G/4G broadband license since 2014 but less than 40% of the population is connected on broadband currently which is a travesty.”

Nauman Sikander Mirza of food delivery service Foodpanda Pakistan said that Pakistan’s digital economy was in very early stages with no e-commerce companies operating in the country and very few government entities using automation.

MD of online selling platform Daraz.pk Ehsan Saya spoke about digitization boosting the trade industry like never before despite the fact that the majority of the population is not accustomed to buying online. He said the e-commerce will pick up eventually when the government improves regulation.

Comment by Riaz Haq on April 28, 2020 at 1:25pm

Bayut (#Dubai) & Zameen (#Pakistan) parent EMPG #emergingmarket #realestate business group raises $150 million at a valuation of over $1 billion, announces merger with OLX in a few markets, including Pakistan


https://www.menabytes.com/empg-olx-150-million/?fbclid=IwAR1xyiifK4...

Dubai-based Emerging Markets Property Group (EMPG) that runs property portals in different emerging markets across the world including Bayut in Dubai, Zameen in Pakistan, and Mubawab in North Africa, has become a unicorn after raising a $150 million round led by OLX Group and its existing shareholders, the company announced in a statement to MENAbytes today.

EMPG did not disclose the exact valuation but said the deal values the company at over $1 billion post-transaction.

The deal includes merger of OLX Group’s classifieds business with Emerging Markets Property Group (EMPG) in Pakistan, Egypt, Lebanon, and the United Arab Emirates.

OLX Group with the deal has become the single largest shareholder of EMPG, owning 39 percent of the company. The $150 million investment is fresh cash injection and will be used by the company to develop a range of new services, creating a more seamless user experience, enhancing data transparency, and deepening market intelligence for both consumers and business users.

According to the statement, EMPG will operate existing OLX platforms in Egypt & Lebanon, and roll out new services for the real estate community. EMPG before the deal did not have any presence in Egypt & Lebanon.

In Pakistan & United Arab Emirates, the platform of both the groups which apparently include EMPG’s Zameen & Bayut and OLX Groups’ OLX and Dubizzle, will be operated EMPG.

EMPG will also operate OLX’s platforms in Saudi Arabia, Bahrain, Kuwait, Qatar, and Oman after this deal.

The statement notes that the aggregated value of properties sold in these markets is estimated at $90 billion, providing a commission pool for real estate agencies of over US $2 billion per annum, “This presents a great opportunity for EMPG to enhance their real estate services in these markets.”

Imran Ali Khan, the co-founder, and CEO of EMPG, said, “EMPG has grown at a tremendous pace since its inception. Our unique ability to scale using our proprietary tech has aided and enabled this expansion. This deal puts us one step further in our journey towards providing solutions in multiple markets to over a billion consumers around the world, expanding our classifieds offering significantly.”

Martin Scheepbouwer, CEO of OLX Group, says “I’m proud of what we have built in these four markets. Our brands are household names, and currently help tens of millions of people to exchange goods and services every month. The next phase is an exciting one, with EMPG’s real estate industry expertise helping deepen the customer experience. As EMPG’s largest shareholder, we’ll have a front seat to explore how we can scale their services model further – taking our ambition to shape the future of classifieds into its next stage.”

Haider Ali Khan, Head of EMPG – MENA on this collaboration: “We, at Bayut and EMPG, are very excited about the future of the UAE real estate industry and the prospects of real estate in the MENA region. This merger of EMPG and OLX will allow us to better serve our customers, given that both operate brands with a strong following and will allow us to leverage existing tech and data to paint a more accurate picture of the state of affairs in the real estate industry across the region.”

“At the same time, we will be making significant technology investments to provide more value to all users of property, automotive and other segments of the Dubizzle and OLX platforms. I look forward to a bright and prosperous future for the group,” he added.

EMPG is currently present in the GCC region with Bayut, Pakistan with Zameen, Bangladesh with Bproperty, Morocco and Tunisia with Mubawab, and Thailand with Kaidee.

Comment by Riaz Haq on June 5, 2020 at 9:08pm

Y-Combinator backed #Lahore-based #Pakistan #startup Tajir raises $1.8M to help mom-and-pop stores source inventory. It is led by Pioneer Fund, Golden Gate Ventures, Fatima Gobi Ventures, Karavan, and VentureSouq. | TechCrunch

https://techcrunch.com/2020/06/05/yc-backed-tajir-raises-1-8m-to-he...

But slowly, global investors who arrived in India and other Asian markets in the last decade are beginning to look at Pakistan and bet on startups that are solving similar challenges.

Tajir, a Lahore-headquartered startup, today serves more than 15,000 neighborhood stores, locally known in the region as kirana, across Pakistan.

The two-year-old startup, the first startup from the nation to be backed by Y Combinator, said on Friday that it has closed a new financing round.

Pioneer Fund, Golden Gate Ventures, Fatima Gobi Ventures, Karavan, and VentureSouq led the round, with participation from a clutch of angel investors, Tajir co-founders Babar Khan and Ismail Khan told TechCrunch in an interview.



Tajir offers full transparency on the prices of various products, addressing a challenge that store owners confront offline each day, and sells and delivers inventories to the stores, said the Khan brothers, whose father ran an FMCG retail distribution business for three decades.

“We help store owners save money on inventory and help them boost their sales,” said Ismail.

Like in India, offline retail drives the vast majority of sales in Pakistan. “The retail is even more unorganized here compared to neighboring nations,” they said. There’s no Amazon or any major giant running an e-commerce business for consumers in Pakistan today.

For Babar and Ismail, that’s a big opportunity as they scale. According to official government data, there are about 2 million neighborhood stores in Pakistan.

Tajir is gaining ground in the country today mostly through word-of-mouth endorsement from existing partners, though the startup also maintains a sales team to educate more store owners about their platform.

It plans to use the capital to expand its offering and develop more services that stores need to grow their business, the brothers said. These offerings could include a wider catalog of inventory, and access to financial services, they said.

“We want to offer an essential service to every single mom-and-pop store in Pakistan,” said Babar.

Tajir today does not have any major competitor, which is good news as a lot is riding on its founders’ shoulders who are among the early batch of entrepreneurs in the country. In many ways, their success will determine the perception of the Pakistani market to investors worldwide.

Comment by Riaz Haq on September 30, 2020 at 8:02am

Prosus Ventures leads $13 million series B #investment in #Pakistan's ride-hailing #startup Bykea. Current investors Middle East Venture Partners & Sarmayacar also invested in the round, bringing total to-date raised to $22 million. #tech https://tcrn.ch/3iddjcF via @techcrunch

The startup has been able to out compete firms like Careem and Uber in Pakistan by offering localized solutions. It remains one of the few internet businesses in the country that supports Urdu language in its app, for instance.

“Our brand is now widely used as a verb for bike taxi and 30 minute deliveries, and the fresh capital allows us to expand our network to solidify our leading position,” he said.

--------------

Bykea, which leads the ride-hailing market in Pakistan, has raised $13 million in a new financing round as the five-year-old startup looks to deepen its penetration in the South Asian country and become a “super app.”

The startup’s new financing round, a Series B, was led by storied investment firm Prosus Ventures . It’s the first time Prosus Ventures has invested in a Pakistani startup. Bykea’s existing investors Middle East Venture Partners and Sarmayacar also invested in the round, which brings its total to-date raise to $22 million.

Bykea leads the two-wheeler ride-hailing market in Pakistan and also operates logistics delivery business and financial services business. The startup has partnered with banks to allow customers to pay phone bills and get cash delivered to them, Muneeb Maayr, founder and chief executive of Bykea, told TechCrunch in an interview.

Fahd Beg, Chief Investment Officer at Prosus Ventures, said firms like Bykea are helping transform big societal needs like transportation, logistics and payments through a technology-enabled platform in Pakistan. “Bykea has already seen impressive traction in the country and with our investment will be able to execute further on their vision to become Pakistan’s ‘super-app,” he said in a statement.


Bykea works with over 30,000 drivers who operate in Karachi, Rawalpindi and Lahore. (Two-wheelers are more popular in Pakistan. There are about 17 million two-wheeler vehicles on the road in the country today, compared to fewer than 4 million cars.)

The new investment comes at a time when Bykea restores the losses incurred by the coronavirus outbreak. Like several nations, Pakistan enforced a months-long lockdown to curtail the spread of the virus in March.

As with most other startups in travel business globally, this meant bad news for Bykea. Maayr said the startup did not eliminate jobs and instead cut several other expenses to navigate through the tough time.

One of those cuts was curtailing the startup’s reliance on Google Maps. Maayr said during the lockdown time Bykea built its own mapping navigation system with the help of its drivers. The startup, which was paying Google about $60,000 a month for using Maps, now pays less than a tenth of it, he said.

Starting August, the startup’s operations have largely recovered and it is looking to further expand its financial services business, said Maayr, who previously worked for Rocket Internet, helping the giant run fashion e-commerce platform Daraz in the country.

Comment by Riaz Haq on February 10, 2021 at 5:34pm

#SBP modernizes FX regulations to a) attract foreign investment in fintechs and startups thru holding companies; b) support exporters to establish presence abroad to promote Pakistani products; and c) allow residents to acquire sweat equity; and more:

https://www.sbp.org.pk/press/2021/Pr-10-Feb-21.pdf

SBP Modernizes Foreign Exchange Regulations to facilitate Start-ups, Fintechs and Exports
State Bank of Pakistan (SBP) has notified revisions in chapter 20 of the Foreign Exchange Manual to
facilitate Start-ups, Fintechs and Exports. The new policy for equity investment abroad will attract
foreign direct investment through the establishment of holding companies by Pakistani fintechs and
startups; support exports by facilitating exporters to establish subsidiaries or branch offices outside
Pakistan; and, allow resident Pakistanis to acquire sweat equity, amongst other changes to the Foreign
Exchange (FX) regulations. Further changes in the foreign exchange regulations will facilitate portfolio
investment in the country including mutual funds, Exchange Traded Funds (ETF) and Real Estate
Investment Trust (REIT) Funds through Pak rupee based Roshan Digital Account (RDA) and Special
Convertible Rupee Account (SCRA).
SBP, after approval of the Federal Government, has introduced three new categories of investment
abroad under its revised policy governing equity investment abroad and banks have been authorized
to allow remittances under newly introduced categories.
i. Establishment of Holding Company abroad by residents for raising capital from
abroad: Pakistan’s investment regime is quite liberal that allows full freedom to repatriate profit,
dividend and capital; however, some international investors prefer to invest indirectly through
holding company established abroad specially in the Fintech and Startup firms. SBP’s revised
policy will enable the Pakistani Fintech and startup companies to channelize foreign direct
investment in the country by establishing a holding company abroad against remittance of up to
USD 10,000 and subsequent swapping of shares to mirror the shareholding of local company in
the holding company.
ii. Establishment of subsidiary/branch office abroad by export oriented companies/ firms for
promoting exports: The policy will enable the export oriented companies to establish subsidiary/
branch office abroad against remittance of 10% of their average annual export earnings of last
three calendar years, or USD 100,000 whichever is higher. This will facilitate exploring new and
non-traditional markets and capturing more export orders, as international buyers prefer dealing
with subsidiaries/ representative offices of foreign companies present in their
country. Accordingly, the proposed policy would help in growth of export-oriented companies and
boost the exports of the country.
ii. Investment abroad by Resident Individuals: The policy will allow the resident Individuals of
Pakistan to acquire equity stake in international firms through share option plans or investment in
listed securities subject to observance of annual ceiling of foreign exchange defined in the policy.
In case of sweat equity a person can acquire upto twenty percent shareholding in a foreign
company. These policy provisions will provide opportunities to individuals to earn foreign
exchange for the country in the form of repatriation of dividend/ capital gains to Pakistan.

Investment in Mutual/Private Funds in Pakistan by Non-Residents:
With an objective to attract investment in the country, SBP has allowed the trading of units of funds
quoted at Stock Exchange, including Exchange Traded Funds (ETF), Real Estate Investment Trust (REIT)


https://www.sbp.org.pk/epd/2021/FECL1.htm
https://www.sbp.org.pk/epd/2021/FEC1.htm

Comment by Riaz Haq on February 11, 2021 at 10:20am

SBP, after approval of the Federal Government, has introduced three new categories of investment abroad under its revised policy governing equity investment abroad and banks have been authorized to allow remittances under newly introduced categories.

https://propakistani.pk/2021/02/10/sbp-modernizes-foreign-exchange-...


1. Establishment of Holding Company abroad by residents for raising capital from abroad: Pakistan’s investment regime is quite liberal that allows full freedom to repatriate profit, dividend, and capital. However, some international investors prefer to invest indirectly through a holding company established abroad specially in the Fintech and Startup firms. SBP’s revised policy will enable the Pakistani Fintech and startup companies to channelize foreign direct investment in the country by establishing a holding company abroad against remittance of up to USD 10,000 and subsequent swapping of shares to mirror the shareholding of a local company in the holding company.

2. Establishment of subsidiary/branch office abroad by export-oriented companies/firms for promoting exports: The policy will enable the export-oriented companies to establish subsidiary/branch office abroad against remittance of 10 percent of their average annual export earnings of last three calendar years, or USD 100,000 whichever is higher. This will facilitate exploring new and non-traditional markets and capturing more export orders, as international buyers prefer dealing with subsidiaries/representative offices of foreign companies present in their country. Accordingly, the proposed policy would help in the growth of export-oriented companies and boost the exports of the country.


3. Investment abroad by Resident Individuals: The policy will allow the Resident Individuals of Pakistan to acquire an equity stake in international firms through share option plans or investment in listed securities subject to observance of the annual ceiling of foreign exchange defined in the policy. In the case of sweat equity, a person can acquire up to twenty percent shareholding in a foreign company. These policy provisions will provide opportunities to individuals to earn foreign exchange for the country in the form of repatriation of dividend/ capital gains to Pakistan.

Comment by Riaz Haq on April 23, 2021 at 8:10am

Pakistan launches growth funds for startups

https://www.thenews.com.pk/print/787584-pakistan-launches-growth-fu....


The (IT) minister (Aminul Haq) said the overall environment in the country is improving. Bykea, one of the startups accelerated at NIC Karachi, has raised $21 million of Series B Funding.

Altogether, 122 deals worth $178 million were made from 2015-2020 in Pakistani startups including another 19 deals with amounts that were undisclosed. This brings the total deals count up 141.

-----------------

Asim Shahryar Husain, CEO of Ignite said 272 startups have graduated from Ignite’s National Incubation Centers with a total investment commitment of Rs8 billion and cumulative revenue of Rs3 billion. These nascent companies have created more than 100,000 new jobs and these numbers quantify the achievements of our five incubators in a short span of time. Ignite is planning vertical incubators and accelerators in future to boost the startup ecosystem of Pakistan.

Husain said the platform will be the first of its kind in and will aim to bridge the gap between entrepreneurs and national and international investors of all types including commercial and impact investors, donors and philanthropists.

The ministry and Ignite will invite various investors, donors and other investment/financial institutions to participate in the platform to consider business opportunities for financing, investments, supply chain commitments and networking. “It will be open to qualifying startups from all NICs and AP incubated and accelerated businesses across Pakistan. Under PakImpactInvest, first grand national pitching session of top 25-30 startups selected from all NICs and AP accelerated companies will be held in the last week of March 2021.”

Comment by Riaz Haq on April 23, 2021 at 6:47pm

In 2012, Pakistan’s start-up ecosystem had only two major
business incubators and accelerators – it has quickly evolved
since then.
By 2019, the country had 24 incubators and
accelerators and around 20 key investors
with many funds
catering to early stage start-ups.

https://twitter.com/bilalgilani/status/1385738041575227396?s=20

Comment by Riaz Haq on May 27, 2021 at 11:38am

The era of VCs and boom of start-ups
Fatima S AttarwalaPublished March 8, 2021


https://www.dawn.com/news/1611254


“I have never seen as much genuine interest in writing cheques as I have in the last year,” says Kalsoom Lakhani, co-founder of the $15 million venture capital fund i2i Ventures. “There are so many international funds in Silicon Valley, East Asia, Middle East and other places that are realising that Pakistan is one of the most exciting places to come.”

Despite the pandemic, venture capitalist (VC) activities increased by 37 per cent to $65.6m in 2020 in Pakistan, explains Misbah Naqvi, co-founder of i2i Ventures. The fund is a sister concern of Invest2Innovate that was formed to support frontier markets in 2011 and acts as a pipeline of start-ups for i2i Ventures.

The lockdown speeded up sectors such as e-grocery, e-food delivery, fintech and edtech. International funds that have invested in similar companies in other markets have a much higher appetite to come into Pakistan as they already know what that model looks like, they explain.

In the last five years, over $200m has been raised by startups of which only about 3pc was towards female-founded or co-founded companies

They give the example TelloTalk, Pakistan’s first messaging platform in English, Urdu and regional languages. With close to 1.5m downloads and continuing to grow, the company has grown four times in terms of active user growth since i2i Ventures’ investment in 2019.


Understanding the VC model
In a traditional business model, the bottom line indicates the returns investors receive. In a VC model, investors make money when they sell their stake and exit the business. The exit can be in the form of an initial public offering, an acquisition, or it could be that the company is growing so fast, such as in the case of Careem and Uber, that more and more investors come in at later stages and buy the stake of initial investors.

“The whole idea of VC is to look at making 10x returns on your investments. The way VC works is that there will be a couple of unicorns that go on to become hundred-million-dollar companies, a few that will do pretty well and offer 3x to 5x returns, some that will just recoup the investment and then there will be those that will go bust,” outlines Ms Naqvi.

“It is a very high-risk asset class, especially in Pakistan where it is unproven,” says Ms Lakhani. “Since the space is really new, and exits require a five- to ten-year timeframe at least, it is too early to assess exits.”

A more mature market
There are several rounds of investments for startups. The first is when capital is raised by friends and family, followed by a pre-seed round that has angels and institutions involved. The seed level is when one starts seeing traction, after which the founders can raise either pre-seeds, Series A, up to Series A1. The Series A round of funding is when the company has figured out its product market and wants to, for example, grow to a few more cities. Series B and beyond is like putting fuel into the engine, explains Ms Naqvi.

“Considering the continuum, you can appreciate that a few years ago we were mostly seeing seed-stage deals. However, in the last year, we have had more series A deals in tandem with higher valuations of these companies.”

Criteria for funding
“We typically finance $100,000-200,000 in each investment,” they explain. Their process can take anywhere between four weeks to a few months, depending on how investment-ready the founders are.

The most important factor for the investing duo is the strength of the founding team. Secondly, they analyse the market opportunity — for example, a business in the organic food niche may be great but the opportunity would not be as large as say e-groceries. The third factor is traction — the partners don’t invest in a company that is just an idea.

Comment by Riaz Haq on July 5, 2021 at 7:15am

#Karachi-based startup Trukkr raises $600,000 seed for its trucking marketplace in #Pakistan. It helps businesses transport their goods across Pakistan using its network of vetted transporters who match users' needs. #transport #freight https://www.menabytes.com/trukkr-seed/ via @MENAbytes


Karachi-headquartered trucking marketplace Trukkr has raised $600,000 in seed funding led by Peter Findley, it told MENAbytes today. The investor is a General Partner at Anchorless, a New York-headquartered VC focused on Bangladesh. The deal also included participation from Pakistan-focused investor Kinnow VC, Kargo Technologies’ founder and CEO Tiger Fang, and executives from Cue Health. In addition to the equity investment, the startup has also raised an undisclosed amount of money in debt financing.

Founded in 2020 by Sheryar Bawany, Waqas Khatri, Ali Haji, Mishal Adamjee, and Kasra Zunnaiyer, Trukkr helps businesses transport their goods across Pakistan using its network of transporters. Its marketplace features vetted transporters and truck drivers and matches loads in real-time, with transparent (and fair) pricing for both the parties. Since its launch, the startup claims to have served 20,000 trucking movements for different businesses in Pakistan including leading large corporations like Artistic Milliners, Ittehad Chemicals, and Master Group.

Trukkr has also built a dedicated logistics management platform that can be used by companies to manage their fleet, clients, and transporters. The platform is completely free-to-use for Trukkr’s customers.

There are at least ten local and regional online trucking marketplaces operating in Pakistan. Speaking about how they’re different, Trukkr’s co-founder Waqas Khatri told MENAbytes that their tech is world-class and is being used by some of the largest corporations in the country, “They’re not only using our marketplace to move their goods all over Pakistan but our online software as well to manage their entire logistics operations.”

Peter Findley seems to agree with the bit about tech, “Trukkr’s technology is top in a category not just in Pakistan but also in global markets. Its management team has a great understanding of how to implement the freight solution. Their knowledge of graph theory allows them to understand routes in a manner that minimizes waste. This leads to an ability to improve the carbon footprint of the trucking industry and also their partners.”

Prior to starting Trukkr, its co-founder Sheryar Bawany used to lead a logistics company in Karachi. After doing that for ten years, he teamed up with his co-founders to solve the inefficiencies in the local trucking industry using tech, “With an experienced operations team led by the founders, and a strong, comprehensive and localized tech platform built in house, we have completed more than 20,000 trips since we started operations in 2020, and the positive response from our customers has been overwhelming,” he stated in a conversation with MENAbytes.

Faaez Ul Haq from Kinnow VC said, “We are thrilled to invest in Trukkr as they take on the massive opportunity that the Pakistani freight market represents. We looked at several players in this space, and the Trukkr team stood out for their deep expertise, ability to quickly execute, and a rich product offering.”

The startup plans to use the latest funds to further enhance its technology and expand its operations.

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    Blog Posts

    AUKUS: An Anglo Alliance Against China?

    In the recently announced AUKUS alliance, the US has joined the United Kingdom to arm Australia with nuclear-powered submarines to check China's rise. This announcement has not only upset the Chinese but it has also enraged France. The French are angry because AUKUS has scuttled Australia's earlier agreement to purchase diesel-powered submarines from France. …

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    Posted by Riaz Haq on September 18, 2021 at 11:00am — 8 Comments

    Karachi-Born US Senator Van Hollen Stands Up For Pakistan During Afghanistan Hearing

    Maryland Democrat Chis Van Hollen, a key US senator who was born in Karachi, said it was the Trump administration that asked Pakistan to release the top three Taliban leaders for US-Taliban peace talks in Doha Qatar. He was speaking at a recent US Senate hearing on the fall of Kabul to the Taliban and the chaotic US withdrawal that followed the Afghan Army collapse. …

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    Posted by Riaz Haq on September 16, 2021 at 9:30am — 3 Comments

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