Comment by Riaz Haq on May 24, 2022 at 10:03pm

ZoodPay, a Switzerland-headquartered buy now pay later platform that operates in different Middle Eastern and Central Asian markets has acquired Pakistani consumer lending fintech Tez, it announced in a statement today. The financial details of transaction were not disclosed but the statement noted that it is the first M&A deal in Pakistan’s young fintech space.

https://www.menabytes.com/zoodpay-tez/

Founded in 2016 by Naureen Hyat and Humza Hussain, Tez offers nano-loans to unbanked and underbanked population across Pakistan through its digital platform. According to its website, it offers personal loans of up to PKR 10,000 ($50) that the users can pay back in installments. Tez has a fixed one-time fee for these loans, ranging between 10 to 20 percent depending on the loan amount and customer profile.

Backed by Accion, Flourish Ventures (Omidyar Network), Planet N, the startup had become the first licensed Non-Bank Financial Company (NBFC) in Pakistan in 2018, it said in a statement. It had raised over $1 million to date in financing. The Karachi-headquartered fintech had also won $100,000 in Visa Everywhere Initiative for Women competition, in 2019.

Commenting on the acqusition, co-founders of Tez said, “We started Tez with an ambition to make access to finance for the masses as easy as access to a mobile phone. We are humbled and thrilled by the confidence shown in our business model by larger regional players and look forward to the next level of development for Tez where our learnings in crafting the digital lending journey and managing risk can serve as a foundation for delivering consumer-centric lending solutions at scale, while creating credit histories for the masses.”

ZoodPay which currently operates in Joran, Iraq, Lebanon, Uzbekistan, and Kazakhstan has raised close to $50 million from Zain Ventures and Sturgeon Capital. With the acquisition of Tez, ZoodPay would expand its offerings to Pakistan.

“The company’s lending strategy is fortified by three integral elements of digital infrastructure including, (i) Acquisition of consumers and merchants via its diverse distribution channels including its own e-commerce marketplace and network of retailers and partners, (ii) Deriving rich transactional data from its internal universe of fintech, e-commerce marketplace and logistics, and (iii) Leveraging its proprietary credit scoring algorithms to assess credit risk and extend credit to both consumers and merchants,” stated the fintech in a statement.

It is not immediately clear if ZoodPay plans to launch its BNPL product in Pakistan.

Michael Khoi, CEO of ZoodPay said, “Pakistan is a market brimming with potential given the number of people seeking access to credit facilities. We’re confident that by combining ZoodPay’s unique ecosystem and experience operating in frontier markets with Tez’s local know-how, strong team and ecosystem partnerships, we’ll be able to positively impact the life of Pakistani people and empower them by giving them access to easy, affordable and reliable digital financial services.”

Nadeem Hussain, Chairman of Tez said, “The Pakistani startup ecosystem has hit its inflection point. In addition to sizable fundraises, acquisitions of local players by international players are starting to take place. This further validates the global value Pakistani startups are creating. Planet N was one of the first in the market to invest in startups. We are now seeing the first-mover advantage.”

Comment by Riaz Haq on May 31, 2022 at 7:23am

What Special Technology Zones Mean For Pakistan’s Tech Industry

https://www.forbes.com/sites/forbestechcouncil/2022/05/31/what-spec...

Pakistan’s tech industry is changing. Government-sponsored initiatives have allowed for the creation of special technology zones, which aim to boose the IT economy of the country.

The goal is simple: Incentivize tech companies to open their operations within the country through the use of tax-exempt programs.

Pakistan’s tech industry was already thriving. As stated by STZA, Pakistan is the second-highest rated country in South Asia for the ease of doing business, places in the top top 10 for accelerated business climate reform, and boasts a 70% increase in IT exports over the last three years. The inclusion of special technology zones only serves to increase interest further.

What are special technology zones?

Pakistan’s tech industry was already a booming entity. Special technology zones aim to capitalize on this growth, accelerating the speed of development throughout Pakistan’s IT sector.

Pakistan’s Tech Industry

Pakistan is already a host to a number of goliath IT companies. Big names such as NETSOL Technologies, System Limited, TechAbout and TRG Pakistan have already contributed enormously to Pakistan’s fast-growing industry IT economy.

Alongside this, its blossoming e-commerce industry, worth $1 billion, has attracted investment contributions from companies such as Amazon, Alibaba and Rocket Internet due to the unprecedented growth Pakistan has been host to.

The Projected Future Of Pakistan’s Tech Industry

While special technology zones will undoubtedly encourage massive growth rates within the tech industry, the level of growth seen before the implementation of the zones was already something to behold.

It’s an understatement to say that Pakistan wasn’t already an up-and-coming challenger to the global tech industry. There has been a multitude of similar projects in Pakistan’s past, such as the planned $1 billion investment in technology parks. Although the planned targets for success weren’t met, the effort alone, and the interest in investing in this sector, proves Pakistan’s commitment to improving its tech economy.

Why does Pakistan’s tech industry need zones?

It’s difficult to say if these are actually a “need,” as existing evidence points toward the fact that Pakistan, in the past five years, has been continuously growing at a substantial pace.

The growth of the tech industry in Pakistan has not gone unnoticed by its own government, however. According to the STZA, Pakistan boasts:

• 300 IT/ITeS organizations.

• 13,000 registered IT companies.

• The third-largest source of digital labor.

• And a 47% growth in tech exports.

There are other accolades that point toward great economic success for the IT industry, and this was the precursor for investing further in that industry.

By capitalizing on substantial growth, they plan to further exceed this by implementing special technology zones. Comparing the current growth to five years ago, the economic status of Pakistan’s tech industry will skyrocket beyond its current regional competitors.

Comment by Riaz Haq on May 31, 2022 at 7:24am

What Special Technology Zones Mean For Pakistan’s Tech Industry

https://www.forbes.com/sites/forbestechcouncil/2022/05/31/what-spec...

The Past 5 Years

A 2019 survey from Arpanet states, “Overall business has crossed 3.3 billion in the year 2018 and 2.8 billion in the duration of 2016-2017, as per the record of Pakistan Software Export Board (PSEB).”

This shows that between 2017 and 2018, overall business increased by a total of $700 million. Before the special technology zones were even a concept, Pakistan became a global contender for exports and IT development.

Why create special technology zones if growth was already massive?

This type of growth is important in Pakistan’s strategy. The zones themselves not only encourage participation from native companies, but they’ve also set their sights on big business around the globe. The zones allow native companies to see less burden on their taxes. This means more resources to spend on internal development, employee retention and training and imports and exports.

Another reason for the zones is to nurture the younger generation of IT experts. A document published by the Pakistani government states that 10,000 students become IT graduates every year, adding to a pool of 300,000 IT experts. Furthermore, 60% of Pakistan’s population belongs to the 15 to 29 age group, meaning technology zones can encourage a higher number of jobs, along with investment in training and employee care.

As stated previously, the zone’s alternative objective is to encourage bigger businesses from the global IT market, whose presence within the country will become an even bigger authority in the overall technology industry across the world.

A Breakdown Of Special Technology Zones

The zones host many benefits and incentives, all listed on the STZA website. The two licenses available are for zone enterprises and zone developers.

The benefits for enterprises consist of tax exemptions, dividend income, capital gains and quality of life benefits, such as a forex account and no restrictions on oversea payments. The benefits for developers consist of the same, focusing on an exemption of property tax.

Combined, this opens property development incentives, from construction to ad hoc custom architecture, meaning businesses that take up residence there can exceed their potential for growth by a bigger margin than anywhere outside the zones.

Where are they located?

Currently, technology zones are located in Islamabad, Punjab, Sindh, KPK, Balochistan, GB and AJK, with some locations already being established and others in the process of being established.

Summary

Whilst it’s not possible to have control of government taxes, set up special technology zones or anything similar, there are takeaways we can use for ourselves here at home.

Pakistan’s economic growth can stand to teach us a lesson on how to operate our own businesses. Investment in youth can lead to a stronger workforce over time, meaning the capacity for future profits can be shared between all.

By having specific areas dedicated to an industry, you can nurture a workforce with skills that can be used anywhere. The true takeaway is collaboration and the opportunity to nurture your younger employees. Pakistan has shown all of us that long-term investment can indeed move a country into the big leagues. Imagine what it could do for you, on a smaller scale, in five years’ time.

Comment by Riaz Haq on June 1, 2022 at 6:44pm

New growth
Sarah Nizamani


https://www.dawn.com/news/1692241/new-growth

Evidence confirms that economic growth occurs when countries are a part of global supply and value chains. But, what defines value changes. For example, Adam Smith in The Wealth of Nations lists some of the most unproductive professions — including that of churchmen, lawyers, musicians, dancers and sportsmen. He would be surprised to know how much money there is in these professions now. For Pakistan to achieve sustained growth, it needs to create value for the goods and services in global demand. There are no easy answers for how this can be achieved, but there are ideas to debate.

For 200 years, economic growth has been linked with manufacturing, but this may no longer be valid. Several reports show that many low-income countries might have missed the boat to developing industry. As pointed out by Ejaz Ghani and Stephen O’Connell, industrialisation needs two main factors to flourish: 1) enhanced availability of electric power; 2) higher capital investment. With power shortages and an inability to attract investment, Pakistan has struggled with both. However, evidence suggests there is still a chance for developing countries to shape their development pathways which lie in the service revolution. In Pakistan, the service sector has contributed more to growth than industry since 1950 and surpassed agriculture in 1965. In 2020, it employed 36pc of labour and contributed 54pc to GDP. The level of productivity measured at purchasing power parity is also higher than in industry.

Thanks to technology, the sector is no longer exclusively driven by domestic demand and services are globally tradable. This results in increased exports of trade in services. For example, Pakistani freelancers earned $150 million in FY2019-20 (in the absence of PayPal) and Pakistan was ranked fourth in the freelancers’ market (above India and Bangladesh). This proves that manufacturing is not the only driver of growth, and that the service sector is not only sustainable but also inclusive. If Pakistan can expand and improve its service sector, it may result in faster job creation and higher household spending. This would not mean giving up on industrialisation, but divorcing protectionism in the hope of better returns.

Still, there’s a need to recognise that services are an urban phenomenon and skill-centric, and may not bring prosperity to all in equal measure. To bring rural prosperity, there’s a need for inclusive capitalism to reach farmers, which means access to formal finance, informed policymaking, investment in agro-tech and autonomy in farming decisions. Skipping manufacturing to leapfrog to services is possible, but this cannot be done without raising farm incomes.

What is suggested here is to end the factory fetish and protectionism, keep away from subsidising land, credit and power, empower small farmers, remove growth constraints in agriculture, invest in people, and change the state’s role from regulator/inhibitor to enabler/value creator — and to remember that the only failure is the failure to envision a better future.

Comment by Riaz Haq on June 2, 2022 at 8:48pm

Startups in Pakistan: The ecosystem (finally) takes off | McKinsey


https://www.mckinsey.com/industries/technology-media-and-telecommun...


Daniel Eisenberg: Based on demographics alone, Pakistan’s start-up ecosystem should already have been thriving for many years. It has, for starters, the fifth largest population in the world, approaching 230 million. And that population is both overwhelmingly young, with a median age of 22, and bi-lingual, with the fourth largest number of English speakers in the world. Add to that one of the fastest-growing middle classes, more than 100 million mobile broadband subscribers, and hundreds of thousands of tech professionals, and you have all the makings of a fertile market for new enterprises and digital services.

Yet until recently, venture or growth funding in Pakistan was barely a trickle compared to similar countries in the Middle East/North Africa region or in other parts of Asia. In the last couple of years, however, global VCs and other foreign investors have begun making significant bets on local start-ups as many regulatory and cultural barriers have started to soften.

To gain a better understanding of the changing dynamics of this start-up market, we are pleased today to be joined by two experts based in the region. Aatif Awan is the founder and managing partner of Indus Valley Capital, a Pakistan-focused venture fund he launched in his native country after working as a tech executive in Silicon Valley for several years. Abdur-Rahim Syed is a McKinsey partner based in Dubai who co-leads the firm’s start-up work in the region. Earlier in his career, he also worked in Silicon Valley.

Comment by Riaz Haq on June 2, 2022 at 8:55pm

Startups in Pakistan: The ecosystem (finally) takes off | McKinsey


https://www.mckinsey.com/industries/technology-media-and-telecommun...


Aatif, Abdur-Rahim, welcome to the podcast. Thanks so much for joining us today.

Aatif, you launched Indus Valley Capital in 2019 after working in high-ranking positions at both Microsoft and LinkedIn. What has been changing in the Pakistan start-up ecosystem in recent years that convinced you it was the right time to focus on it in this way?

Aatif Awan: The funny thing is I didn’t see myself moving back to Pakistan at all, let alone starting a Pakistan focused VC fund, until I found myself in a position where I knew I had to do it.

In 2018, after leaving LinkedIn, I decided to take a year off. I spent about half of it in Pakistan with my parents. That’s when some Pakistani founders started reaching out to me, seeking advice on growth, product, or fundraising.

It was mind-boggling that between 2016 and 2018 Pakistani start-ups were averaging about $10 million a year in VC funding, which is $0.05 per capita, or about one-third of a basis point of the G.D.P. That did not make any sense whatsoever. Next door, MENA was doing $800 million in annualized VC funding. And when you looked at the fundamentals in Pakistan, which I started looking at closely, it’s the fifth largest country with 200 million plus people. The median age is 22, which makes it the fourth largest Gen Z and younger population. It’s also the fourth largest English-speaking population and has had the fourth largest absolute increase in middle class.

So, the foundational elements were all in place, and then you had this population increasingly adopting the internet. We had more than 50 million broadband subscribers back in 2018. Now it’s 110 million. The tech talent to build those start-ups was there as well, with 300,000 plus tech professionals. I realized that it was just a matter of time, as we are at the cusp of this inflection point of a very large economy making that offline to online transition.

We’ve seen that happen in the U.S., in China, Indonesia, and India. Whenever that happens it creates massive opportunities for impact as well as financial opportunity. That made the decision obvious and quick for me. I knew if I didn’t do it, I’d regret it. I decided to move back and start Indus Valley Capital, which is a Pakistan-focused early-stage VC fund.

Daniel Eisenberg: Abdur-Rahim, you also worked in Silicon Valley early in your career. First at eBay and then at McKinsey, and you’re now based in Dubai.

For years the Middle East has far outpaced Pakistan in attracting VC funds, as Aatif pointed out. The gap now seems to be closing a bit. Why in your view did it take so long for Pakistan’s start-up ecosystem to start to take off, even though it had this foundation that Aatif was talking about?

Abdur-Rahim Syed: The gap is certainly closing, but the whole region is accelerating. If you take Saudi Arabia, the largest economy in the MENA region, they had $140 million of VC funding in 2020. In 2021, they had $548 million. That’s almost quadrupling in one year. Pakistan is on a faster trajectory, so the gap is closing.

As for why it took so long, if you look at the macroeconomy of Pakistan it’s been long dominated by agriculture, and by conglomerates that often have captive businesses. There’s not a burning platform, a driving reason to innovate, to take risks. I’ll give you one example. Take gross capital formation, which is a critical enabler of future growth. Pakistan’s gross capital formation in the last couple years has been roughly 15 percent of G.D.P, compared to 30 percent for India and 32 percent for Bangladesh. Hopefully this will change now that we have a significant acceleration in the start-up space.

Comment by Riaz Haq on June 2, 2022 at 8:56pm

Startups in Pakistan: The ecosystem (finally) takes off | McKinsey


https://www.mckinsey.com/industries/technology-media-and-telecommun...



Daniel Eisenberg: Aatif, you have a unique perspective with your investments in Pakistan right now. What sectors or horizontals are dominating as the scene emerges?

Aatif Awan: It’s been super exciting seeing this dramatic rise of Pakistani start-ups over the last couple years. In 2021, Pakistan raised close to $350 million in VC funding. That ratio of 80 to 1 relative to MENA is now at seven to one, which is in line with the G.D.P. ratios. If you break that down, a vast majority has been e-commerce start-ups. This is very typical of emerging markets. At the beginning you see founders going after the largest chunks of the economy waiting to be online. That tends to be e-commerce followed by logistics and that’s what has dominated in the Pakistani start-up ecosystem for the past couple of years. Fintech is now rising on the back of some positive regulatory changes, including the introduction of new Electronic Money Institution (EMI) and digital banking licenses. We have also started seeing a pattern in the digitization of education and the health sectors, which can have a major impact on the country.

Overall, in 2021 more than half of all funding was e-commerce start-ups, which was split between the B2C and B2B start-ups. On the B2C side it’s ranged from commerce start-ups offering quick delivery of groceries and convenience items, to online ticketing, pharmacy delivery, and fashion shopping. On the B2B side we’re seeing a rapid digitization of the informal retail sector, which is essentially mom and pop corner stores that we call kiryana stores in Pakistan.

In terms of notable examples, I’ll mention two of the most well-funded start-ups, which in full disclosure were our first two investments. Airlift is a quick commerce start-up that has raised over $100 million in funding. They offer 30-minute delivery of grocery, pharmacy and household items. They are also expanding to electronics and have some very notable investors. They’re backed by First Round Capital, which is one of the earliest investors in Uber, Square, Notion, and Roblox. They typically don’t invest much outside the U.S. Airlift also got funding from Josh Buckley and Harry Stebbings, who are some of the leading solo capitalists, as well as from founders of Twitter, DoorDash, TransferWise, and many other top start-ups in the Valley. The other one I would mention is Bazaar, which is a B2B commerce and fintech start-up. They’ve raised over $100 million in funding.

If you look at the last two years, there’s been a little over $500 million in fundings. Airlift and Bazaar consumed $200 million of that. Bazaar’s investors also include some top tier investors like Target Global, Dragoneer and Acrew. They are essentially building the operating systems for B2B commerce in Pakistan with a platform that covers the marketplace, last-mile logistics, software, and fintech offerings.

To put things into perspective, Bazaar is just two years old. What’s exciting to see is that in a large, untapped market, when these start-ups come, they can grow very, very rapidly.

Daniel Eisenberg: Abdur-Rahim, I’m not sure if it’s too early to judge, given how young these start-ups are, but how concerned are you about a disparity between early-stage capital and later stage funding. I know in some markets early-stage capital has been relatively easy to come by, but obtaining later stage funding has been more of a challenge.

Abdur-Rahim Syed: It is a concern. But it’s not an uncommon concern among similar markets. Were we to have this conversation two years ago we would be asking if there is enough capital for series A. At this point, it’s clear there is enough capital for pre-seed, for seed and for series A.

Comment by Riaz Haq on June 2, 2022 at 8:56pm

Startups in Pakistan: The ecosystem (finally) takes off | McKinsey


https://www.mckinsey.com/industries/technology-media-and-telecommun...



Daniel Eisenberg: As we come to the end, could each of you briefly give us a sense of where you hope the Pakistan start-up ecosystem will be in five to ten years?

Abdur-Rahim Syed: If you look at the core reasons why investors are excited, the facts are undeniable. The median age in Pakistan is 23 years; The U.K. by comparison is 41 years, and it will take a while for the Pakistan median age to get up there. There are almost 19 million either middle class or upper-class Pakistanis, which is bigger than all of Germany. The sheer size and the potential of the country is going to stay, which means that we are at the beginning of the journey for entrepreneurship and digitization in Pakistan. How quickly this grows is the question, not whether it grows. Will it reach similar levels as Indonesia and other pure markets? I’m sure it will. And I’m sure they’ll keep growing too, as there’s a lot of positive momentum. Many of the challenges we discussed are part and parcel of the growth journey of a digital growing, developing country.

Daniel Eisenberg: And Aatif?

Aatif Awan: In 2019 I was using Indonesia as a model to compare what’s in store for Pakistan. Pakistan looked, in terms of start-ups and VC funding activity, like Indonesia in 2009. So, there was this gap of ten years.

By contrast, today it looks more like Indonesia of 2014 and 2015. It’s very exciting that Pakistani’s start-up ecosystem is growing faster and the gap has begun to drop. The fundamental reason for that is that while Pakistan had a late start, a lot of that foundation was in place. The mobile adoption had taken place.

If you look at the $350 million of 2021, on the one hand, it’s very, very fast growth. But it’s still just 0.1 percent of Pakistan’s G.D.P. Imagine once that catches up to the ratio that countries like India have. I expect that Pakistan should be doing multiple billion dollars in VC funding every year, and given where the economy is, start-ups will become some of the biggest companies in Pakistan. In fact, these will be the major driving force for the Pakistani economy in five years, not the traditional businesses.

Daniel Eisenberg: Well, it’s going to be fascinating to watch as the growth journey continues. I want to thank both of you for taking the time to talk about this topic in such depth.

In addition to our guests, a big thank you, as always, to our entire McKinsey on Start-ups production team: Molly Karlan, Polly Noah, Sid Ramtri, Myron Shurgan, and Katie Znameroski.

And finally, thank you for listening. We hope you’ll join us again for McKinsey on Start-ups.

Comment by Riaz Haq on June 7, 2022 at 8:13pm

Farmdar, a #Pakistani #agritech #startup raises $1.3 million in seed round. It will provide data to increase farm output. #Pakistan is among the world’s top 10 producers of essential crops such as #sugarcane, #wheat & #rice, but it ranks 50th in yield

https://www.techjuice.pk/farmdar-a-pakistan-based-agritech-raises-1...


Farmdar uses deep-tech with high-res, multi-band satellite imagery to create actionable data for farmers and corporates. This data has a direct result on the efficiency and profitability of farmers and corporates.

The round has been led by Indus Valley Capital with participation by strategic investors from Pakistan, the Middle East, and US, including Deosai Ventures, Tricap Investments, United Distributors Pakistan Limited, The Community Fund VC, LMKR and K2 Global Ventures.

Launched in 2021 by childhood friends Muhammed Bukhari, Muzaffar Manghi and Ibrahim Bokhari who himself is a third-generation large farmer, the Farmdar journey began when the founders started exporting produce and discovered that Pakistani produce was considered low quality in the UK and UAE markets. The founders vowed to do something about it.

“We looked at supply chain improvements first, like cold chain, which allowed us to extend shelf life but our underlying quality was still poor. We then tried remote sensing and precision agriculture technology and it created a step change in quality and yield whilst reducing our input costs” said Ibrahim.

“Pakistan is amongst the top 10 producers in the world for essential crops such as sugarcane, wheat and rice, yet in terms of yield we rank 50th or below. It’s a massive yield gap. Farmdar is in a unique position to help increase yield and quality while reducing farming costs and minimizing waste. Pakistan is well placed to be a regional and global agricultural leader. The starting point for agricultural excellence is data and insight that can be actioned upon, accurately and quickly. That’s where Farmdar comes in.” quotes Manghi.

In light of a rapidly growing global population, the agritech’s vision is to create a food secure world and empower farmers in Pakistan with technology to gain control over their produce and its true value. Inherently, there is a human impact, and to that end many data-points for individual farmers will be free of cost, as is registration on the Farmdar web-app. Corporate farms, food processors, food companies and mills requiring more elaborate data and insight will be engaged with bespoke solutions and subscriptions.

By virtue of yield increase with waste and input reduction, Farmdar’s data also helps reduce the impact of agricultural activity on climate change. Farmdar is the only agritech in Pakistan to be a part of the Greentech Alliance.

“Simply using more land to grow more food isn’t the solution, it’s devastating for climate change” quotes the Muhammed. “Farmdar uses artificial intelligence to create data that helps optimize crop productivity by increasing yield, reducing harvest loss and input costs and monitoring diseases. We knew that this data was of immense value, but were surprised to see the widespread appetite for data both on the individual farmer and the corporate side. Accurate data at scale doesn’t really exist in Pakistan”.

Farmdar’s use of technology with remote sensing through satellites makes their growth scalable and aligns with the vision to solve a global problem of agricultural sustainability. The funding will not only enable Farmdar to scale rapidly across Pakistan and hire and develop the very best tech talent, but also apply use cases from Pakistan in foreign markets such as Thailand, Turkey, Bangladesh, Malaysia, Philippines and across the Middle East.

Comment by Riaz Haq on June 8, 2022 at 7:44am

Pakistan’s startup boom has triggered a “war for talent”
Flush with venture funding, tech companies are offering staggering salaries and perks, while recruiters struggle to hang on to candidates eager for the best deals.

https://restofworld.org/2022/pakistans-startup-boom-war-for-talent/

In the spring of 2021, Qatar-born edtech startup Stellic decided to hire a head of engineering in Pakistan. The company used LinkedIn and sought the services of two recruitment agencies to find a candidate. Ten months later, however, the role is still open. “We have been trying different channels, but we haven’t found the right candidate,” Sabih Bin Wasi, founder and CEO of Stellic, told Rest of World.

Stellic’s struggle reflects a broad trend in the Pakistani tech industry, where companies — startups as well as traditional IT firms — are struggling to attract the right talent. The tech boom in recent years has created a severe shortage of trained tech workforce in the world’s fifth most-populous country. Experts believe the industry must come up with innovative ways to overcome the shortage soon, if it wants to continue its impressive growth.

Pakistan’s IT exports increased at a compound annual growth rate of 17.8% between fiscal year 2016 (July–June) and FY 2021. The country’s tech startups raised a record $365 million in 2021 and have already banked at least $223 million in less than five months of 2022.

“There’s literally a war for talent these days,” Salman Shahid, CEO of recruitment startup Kamayi, told Rest of World. “The situation has perhaps been the worst for local software houses, who cumulatively employ some 70% of the human resource, as they train fresh graduates only to lose them to well-funded startups.”

Over 57% of the respondents in a survey of 150 Pakistani entrepreneurs in 2021 cited the availability of top managers to be a “major” challenge. “The emergence of a growing number of venture-backed startups has led to companies competing for a limited talent pool by offering salaries way above market rate, along with other perks,” Invest2Innovate, the Pakistani startup accelerator that conducted the survey, said in its report. “The technology sector witnessed one of the steepest pay increases in 2021, as companies gave higher-than-usual increments in order to retain their resources.”

After graduating from a prestigious college in Karachi in June 2019, Ali Hasan took up his first job at a salary of 20,000 rupees ($128 at the time) per month — not much higher than the minimum wage — at a small software firm in Karachi. Three days later, he quit, lured by a well-known tech company that was offering double the salary. Hasan, who asked to be identified by a pseudonym because he does not want potential future employers to doubt his intentions to commit to an offer, signed the contract with the second employer. But a day before joining, he took up another offer that would pay him three times the initial salary. Since his graduation, Hasan has appeared for “hundreds of interviews” and signed at least seven offer letters, he told Rest of World.

Only two years later, Hasan was making 50 times his original salary as a staff software engineer for a global travel tech company.

Comment

• ‹ Previous
• 1
• …
• 4
• 5
• 6
• 7
• 8
• …
• 13
• Next ›
• Page