Comment by Riaz Haq on August 30, 2022 at 11:30am

Faseeh Mangi
@FaseehMangi
* Pakistani startup PostEx has acquired a logistics company to make it the nation's largest e-commerce delivery firm
* It started in 2019 by going door-to-door to small shops for business
* The combined entity will handle 50,000 orders a day https://www.bloomberg.com/news/articles/2022-08-30/postex-buys-riva...

https://twitter.com/FaseehMangi/status/1564496822860668938?s=20&...

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Pakistani startup PostEx, a provider of courier and financing services to online merchants, acquired logistics company Call Courier in a deal that makes it the nation’s largest e-commerce delivery firm, according to its founder.

The combined entity will be handling about 50,000 orders a day, a scale that makes it profitable, founder Muhammad Omer Khan said without disclosing a value for the deal. The acquisition gives PostEx delivery operations in 500 Pakistani cities, compared with its previous base that consisted of just the three main ones.


“While others are going on the backfoot and slowing down, we plan to become even more aggressive,” Khan, who is PostEx’s chief executive officer, said in an interview in the southern city of Karachi.

Pakistan, whose population of about 230 million makes it the world’s fifth-largest nation, is attracting interest from global investors as its online businesses gain users. The country’s startups raised more than $350 million in 2021, a record, with several global venture funds investing for the first time. PostEx raised $8.6 million last year in one of Pakistan’s largest early-stage funding rounds.

More than 90% of e-commerce deliveries in the South Asian nation are paid for in cash, resulting in long delays before the merchants receive the proceeds for the sale. PostEx offers these businesses upfront payments before deliveries are made, giving them liquidity. The financing services help PostEx stand out from the region’s other delivery companies, Khan said.


Pakistan’s e-commerce industry has lured the most investment in the recent funding rush. The majority of the population still hasn’t switched to online shopping, providing room for the sector to grow and transactions to reach $10 billion before 2025 from about $6 billion now, Khan estimates.

Khan started PostEx in 2019 with a friend, going door-to-door to small shops to convince them to allow the company to handle their deliveries. The acquisition more than triples its number of employees to 2,400.

Comment by Riaz Haq on September 6, 2022 at 9:10am

#Pakistan #PropTech #Startup Scene a Standout Among #EmergingMarkets.A huge, young/growing population needs #housing & other #realestate services.The country’s only #unicorn — EMPG, the Emerging Power Market Property Group — came out of the proptech sector https://commercialobserver.com/2022/09/pakistan-proptech-companies/...

Because Pakistan’s black market is three times the size of the nation’s legitimate economy, real estate is the only industry outperforming other asset classes, said Arif.
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A country of 230 million people with a median age of 23, Pakistan is embracing proptech innovation as a means to more efficiently increase housing availability and other real estate services. The proptech industry in turn is providing new job opportunities for Pakistan’s growing number of highly educated young people.

Atif Bin Arif, founder and CEO of Karachi-based MyGhar, a coliving startup that provides furnished private and shared rooms with all-inclusive billing, said his decision to start the company was based on his trying to rent an apartment in Islamabad, the country’s capital. He found that Pakistan’s residential culture was a problem for a young bachelor looking to rent.

“You know, we live with our parents over here,” said Arif, who was raised in Toronto and moved back to Pakistan 10 years ago to take over his family’s travel and hospitality business. “It’s just a cultural norm that families live together and move out when they get married.”

However, Arif wasn’t married as he looked for an apartment.

“That was the first time I moved between cities as a temporary move,” he said. “As a single male, that was one of the most daunting tasks I have ever come across. If you visited 10 properties, 10 out of 10 landlords would say no to bachelors because they would think they’re going to come and ruin the place. So, culturally, that was a problem.”

It took Arif nearly two months to find a place.

“Also, it was expensive,” he added. “They would ask for three months’ deposit, three months advance rent, and one month of broker fees. It was a completely offline process. I would be going on classified websites, visiting properties, and physically exhausted. That’s where the Eureka moment happened: I am someone with resources and it’s taking me this long and it’s this daunting of a task? Imagine the average individual.”

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“Funds cannot be parked anywhere except [in real estate],” he said. “I realized that’s where I wanted to be. There was no dedicated housing solution. And I thought that if I can create furnished spaces that are move-in ready that people can book on a monthly basis, completely flexible and digital, we might be solving one of the most pressing needs in the housing industry in Pakistan. That’s what we’re out to build.”

The market is huge and growing. About 500,000 Pakistanis graduate college annually, and one-fifth of those move to city centers, Arif said.

Pakistan’s foreign direct investment in June 2022 was $271 million, according to CEIC. The country’s only unicorn — EMPG, the Emerging Power Market Property Group — came out of the proptech sector.

Given Pakistan’s vast market potential, its housing challenge is not the only area where proptech startups are looking to provide solutions. The workplace is being disrupted and digitized, as well.

“We provide flexible workspace solutions across coworking enterprise offices,” said Omar Shah, co-founder and CEO of Colabs, a Lahore-based proptech firm founded in 2019.

Comment by Riaz Haq on September 6, 2022 at 9:10am

#Pakistan #PropTech #Startup Scene a Standout Among #EmergingMarkets.A huge, young/growing population needs #housing & other #realestate services.The country’s only #unicorn — EMPG, the Emerging Power Market Property Group — came out of the proptech sector https://commercialobserver.com/2022/09/pakistan-proptech-companies/...


Having seen the traditional Pakistan real estate market that has existed for decades — one he characterized as grossly inefficient and expensive — Shah realized it was ripe for digital disruption.

“I did this because it was the sharing economy,” he said. “The whole concept of the sharing economy is that the same spaces are used by multiple people. And as we move towards a more flexible world, people realize that these solutions are more organized and better fitted in terms of what we’re all doing.”

Colabs bills itself as the fastest-growing flexible workspace in Pakistan. It provides back-office services; HR payroll accounting, for which it is developing a SaaS platform; and an entrepreneurial division for events, workshops and training that acts as an accelerator for other startups.

Similar to MyGhar’s Arif, Shah sees great opportunity and growth for Pakistan proptech.

“I am a former investment banker and investor,” said Shah. “I spent nine years doing private equity venture capital in London and across emerging markets, including Dubai, Latin America, Turkey and Africa. I moved back three years ago to start COLABS. Today we are the top company in the country in terms of speed of growth. We are managing about 1,200 seats across multiple locations. In the next 12 months we hope to get up to 3,000 seats.”

In March, Colabs raised a $3 million seed round from venture capital firms in Pakistan and internationally, said Shah. “Our investors include Fatima Gobi Ventures, Indus Valley Capital, Shorooq Partners, Kinnow Capital, Zayn Capital, as well as angel investors.”

Also, like MyGhar, COLABS is part of a Singapore-based holding company, said Shah. “It’s very common in Pakistan to have your holding company in Singapore, or the Cayman Islands, or Delaware,” he said. “The holding company makes it easier for investors to raise money at the seed or series level by having a foreign audit.”

Although U.S. investment in Pakistan-based proptech startups remains rare, interest in the market is growing, said Zach Aarons, co-founder and partner at MetaProp, a Manhattan-based early-stage proptech startup investment firm.

“A few reasons why I’m excited about the proptech ecosystem in Pakistan is that it’s such a large and young country,” said Aarons. “It has a favorable regulatory environment for fintech and an inefficient current real estate market. Plus, it has high mobile phone penetration and very quickly growing internet access.”

In fact, over the last 18 months, U.S.-based general technology venture capital firms such as Tiger Global Management and Kleiner Perkins have begun slowly to invest in Pakistan proptech startups, said COLABS’ Shah. However, he admits that Pakistan still trails far behind other emerging proptech markets such as India, Indonesia, Singapore and Vietnam.

As a Pakistan-born immigrant to the U.S., Farhan Masood, president and CTO of Soloinsight, a leading workflow automation and security proptech company founded in 2018 and based in Chicago, has a unique perspective on what’s happening in his homeland.

“I think things are changing now,” Masood said of Pakistan. “Things have drastically changed. If you look at the amount of investments that are coming to Pakistan, proptech is the most [exciting]. Ask any Pakistani, ‘What’s your dream?’ The dream is to own a house.”

In such a huge population, home buyers and renters are met with major inefficiencies due to a lack of product as well as no established financing, government support or conventional mortgage systems, he said. “You don’t have any of that support, so the market isn’t right for a huge amount of business.”

Comment by Riaz Haq on September 6, 2022 at 9:11am

#Pakistan #PropTech #Startup Scene a Standout Among #EmergingMarkets.A huge, young/growing population needs #housing & other #realestate services.The country’s only #unicorn — EMPG, the Emerging Power Market Property Group — came out of the proptech sector https://commercialobserver.com/2022/09/pakistan-proptech-companies/...


In such a huge population, home buyers and renters are met with major inefficiencies due to a lack of product as well as no established financing, government support or conventional mortgage systems, he said. “You don’t have any of that support, so the market isn’t right for a huge amount of business.”

As for Soloinsight, it is a somewhat rare Pakistan-U.S. proptech startup, Masood said.

“We started in Pakistan and moved to the United States and now focus on some of the most iconic buildings and Fortune 500 customers,” said Masood, who received the so-called “genius visa” after attending the MIT Business Acceleration Program.

“I’m actually a dropout, but I have a lot of contributions and patents around authentication, facial recognition technology, machine vision and data analytics. I’ve worked with national databases for identity management,” Masood said of his more than 23 years of working to make building infrastructures secure.

Soloinsight has 114 employees, 104 of whom are based in Lahore, with the other 10 in Chicago. The company’s leading product, CloudGate, is a visitor identity and access management (VIAM) platform that delivers security and an intuitive guest and host experience at multiple locations via the cloud. The startup has integrated its product with access control and visitor identity firms, such as Honeywell, Johnson Controls and LenelS2.

Despite the various types and degrees of ongoing chaos in Pakistan — including a parliamentary no-confidence vote in April that ousted Prime Minister Imran Khan and recent catastrophic flooding — MyGhar’s Arif is bullish on the country’s proptech potential.

“It’s a huge opportunity,” he said. “I think the fact that there’s less competition here is the opportunity, which is why we’re all here. It’s why we work day in and night out, regardless of the economic and political turmoil.”

Philip Russo can be reached at prusso@commercialobserver.com.

Comment by Riaz Haq on September 14, 2022 at 7:34am

Pakistan’s embedded finance platform Neem has raised $2.5 million in a seed funding round as it works to support underbanked communities in the country.

https://techcrunch.com/2022/09/13/pakistan-embedded-financial-platf...

The Karachi-based startup targets communities across sectors including agriculture, MSMEs, e-commerce, logistics, healthcare and others. It offers a lending platform that its partners use to provide tailored lending products to consumers and MSMEs. Neem is also working on a banking-as-a-service (BaaS) platform, which will go live in December, that will onboard partners to embed wallets and payments and offer financial products such as insurance and savings customized to specific community’s needs.

Three-year-old Neem was founded by Nadeem Shaikh, Vladimira Briestenska and Naeem Zamindar, who previously worked as fintech entrepreneurs, operators and VCs.


“Most of the [existing] players are providing a B2C solution; we are a B2B2C solution. If you look at the embedded finance space, it is a $167 billion opportunity,” Shaikh said in an interview with TechCrunch.

Owing to COVID, the strong growth in digitization has helped Neem embed its finance services across private and public sectors.

Citing industry figures, Shaikh said about 53 million people in Pakistan are currently underbanked. Over time, the startup plans to go beyond Pakistan and support underbanked communities in other developing markets.

The seed funding, which the startup aims to use to expand its existing team of 20 people, roll out the BaaS platform and capitalize licenses, was led by Hong Kong-based SparkLabs Fintech. The funding round also saw the participation of Pakistan’s investment banking firm Arif Habib, Cordoba Logistics and Ventures, Taarah Ventures, My Asia VC, Concept Vines and Building Capital. Additionally, partners at Outrun Ventures, the founding partner at Mentors Fund and fintech veteran and ex-CEO of Seccl also participated in the seed round.

“We have strong conviction about Neem’s mission to enable financial wellness for underbanked communities, and have full confidence in the Neem leadership team to realise this vision amidst macro challenges across the globe,” said William Chu, managing partner, SparkLabs Fintech, in a prepared statement.


The startup was bootstraped before receiving the seed funding.

Comment by Riaz Haq on October 3, 2022 at 10:53am

Pakistan sees growing culture of innovation amid tech startup boom
By Hamna Tariq and Uzair Younus

https://www.atlanticcouncil.org/in-depth-research-reports/report/pa...


Pakistan’s startups and technology sector witnessed unprecedented growth during the COVID-19 pandemic. 2021 was a record-breaking year, with technology startups raising $350 million, while over $227 million was raised in the first half of 2022; Pakistani startups have raised $322 million in 2022 so far. Additionally, Pakistan’s information technology (IT) services sector has emerged as the largest net services exporter in the country, with IT exports more than doubling from $1.19 billion in fiscal year (FY) 2019 to $2.62 billion in FY 2022.

Another key component of the country’s technology sector is freelance work, where individuals provide technology services to global clients through platforms such as Upwork and Fiverr. This talent pool has experienced a tremendous increase in their earnings during the pandemic. While exact data for cumulative freelance earnings is not available, Pakistan is ranked as one of the largest freelance markets in the world. The national government has set a target of earning over $3 billion from this sector by 2024.

However, a tightening global macro environment coupled with increasing domestic political instability is a cause of concern for the sector, especially the domestic startup economy. To understand the risks and opportunities facing the technology ecosystem, the Atlantic Council’s Pakistan Initiative interviewed several experts within and outside Pakistan. The analysis below highlights the current state of the ecosystem and the impact of ongoing economic and political instability in Pakistan. It also outlines recommendations for key stakeholders including policymakers seeking to further globalize Pakistan’s technology sector to unlock both export earnings and foreign investment opportunities.

Comment by Riaz Haq on October 25, 2022 at 10:16am

Pakistani startups raise $328m in first 9 months of Calendar Year 2022
Despite investor scepticism, amount raised equals 87% of total funding in 2021

https://tribune.com.pk/story/2380002/pakistani-startups-raise-328m

In spite of heightened investor scepticism stemming from geopolitical tensions and mounting fear of a global recession, the total funds raised by Pakistani startups, in the nine months of 2022, stood at $328 million. This amounts to 87% of the total funding in 2021, as per Alpha Beta Core’s Deal Tracker.

“The third quarter of 2022 has had more early-stage deals with total seed and pre-seed level rounds accounting for 90% of the total deals. The average deal size in the third quarter of 2022 clocked in at $60 million versus $7.3 million last quarter,” said Khurram Schehzad, CEO of Alpha Beta Core (ABCore).

Speaking to the Express Tribune, startup Investment Specialist, Kapeel Kumar said, “The more room for failure we leave, the more we also create room for success in its wake.”

“The one reason Pakistan is witnessing the boom is because the country is, after all, one of the few untapped frontier markets,” he noted.

“Most investments are within B2B or B2C e-commerce, fintech and logistics. This is a trend that can be observed in a lot of emerging markets as the ecosystem starts to grow,” he added.

“The total deal value in the third quarter was recorded at $48.6 million with a total of 11 deals,” said ABCore CEO Schehzad.

“The top deals closed were DBank at $17.6 million, OneLoad at $11 million, PriceOye at $7.9 million and DealCart at $4.5 million. Other notable deals this quarter were Neem and SnappRetail at $2.5 million each and Mahaana at $2.1 million,” he added.

Explaining the impact of startups shutting operations in Pakistan, Kumar said, “The closing of tech-startups in the last six months is alarming. In Pakistan, this will weigh heavily on the entire startup ecosystem, which is unfair to the many startups performing and creating employment.”

“The success of some startups is being fueled by the country’s growing human capital and rising investments in technology startups,” he added.

“We look forward to a better closing of 2022 as compared to that in 2021. Pakistani startups still have much better survival rates (both in terms of size and numbers) than the rest of the region or the world,” Kumar commented.

“Owing to our massive population, we have an incredible potential of growth within us,” said Noman Ahmed, CEO of SI Global Solutions.

He highlighted that “Fintech and e-commerce alike have brought in a significant chunk of this funding. The need of the hour is to create consistency and compliance, and support may be needed in order to sail through this passage to enable startups to continually thrive ahead. With this new found funding, we must collectively focus on bringing Pakistan at par with the Western world. There’s absolutely no doubt that Pakistan is positively brimming with talent.”

“As leading professionals in the tech world, it is upto us to revolutionise Pakistan’s technological landscape by nurturing, guiding and shaping this pool of talent. It is imperative that this work begins at the university level. Final projects and thesis submissions should focus on creativity and new ideas that may be brought to life with support from the startups on ground. We must rise to the challenge and work on expanding our horizons within the tech world,” urged the SI Global CEO.

Comment by Riaz Haq on October 25, 2022 at 10:26am

Kalsoom Lakhani
@kalsoom82
1/It's the end of Q3, so u know what that means -- time for the
@Invest2Innovate
deal flow roundup! In Q3 2022, startups in #Pakistan raised $65.5M via 15 deals, bringing our YTD total to $340M. In Q3 2021 in comp, startups raised $177M via 22 deals, so *yes* the slowdown is/


https://insightsi2i.substack.com/p/4-q3-2022-roundup

Comment by Riaz Haq on November 4, 2022 at 11:39am

Pakistan’s Digital Lending Revolution
Not only is increased digital lending the need of the hour, it is also a very attractive business proposition.

https://aurora.dawn.com/news/1144545/pakistans-digital-lending-revo...

The cruel spiral of poverty plagues generations once it takes grip. It takes money to make money. This is especially true of emerging and undocumented economies like ours. It takes money to educate one’s children, without which income prospects greatly diminish for the next generation. It also takes money for a small business owner to invest in stock or supplies. Without this, no income is generated from the business which feeds a disproportionate number of people downstream. Often, health issues can devastate families and their fortunes because a head of household was not able to afford medical treatment.

Poverty is not new. However, we have, for the first time in history, witnessed such a massive and rapid deliberate reduction in the world’s poverty. China systematically lifted 800 million people out of its poverty spiral over a relatively short 40-year period. There are many lessons in this for Pakistan, the biggest of which is that it is indeed possible to turn the corner for our people.

China relied heavily on digital technologies that financially included a significant portion of its population, and also connected them for commerce with each other. Mobile smartphone penetration, online connectivity, digital payments, and online commerce became key catalysts of income mobility. The ensuing digital footprints paved the way to provide credit to people who were previously undocumented and thus un-lendable. There is no debate now that access to credit is one of the most effective ways to reduce poverty. And today, digital access to credit can reduce poverty at scales and speeds previously unimaginable.

Pakistan has recently undergone its digital revolution. Today 80% of adults in Pakistan have access to internet-connected smartphones. About a third have made digital payments. Seventy percent of new bank accounts over the last five years were contributed by mobile wallets. Our chowkidars, mazdoors and corner store owners are all on WhatsApp and avidly consuming TikToks. E-commerce, although still relatively small with a market size of about six billion dollars annually, has shown one of the fastest growths globally. Key catalysts of income mobility are now present for us to take advantage of.

So why do less than two percent of our population receive loans from formal financial institutions? Because formal financial institutions employ traditional ways of establishing creditworthiness, by collecting documents. The size of our undocumented economy is at least as large as our formal economy and comprises the vast majority of our population. With no signals of creditworthiness, money is not lent. With poor signals of creditworthiness, money is lent but de-risked by pledging tangible assets, which are uncommon among the poor.

The scarcity of credit given by banks to consumers and small businesses is further compounded by the fact that it is hard work to give small loans with cumbersome and expensive physical processes. There is little incentive to serve these key segments, especially compared to the easy, safe and large lending appetite of our government. Nearly three-quarters of all the money deposited across banks is given to the government in the form of loans or investments by banks. This voracious appetite and easy profit from the government has crowded out private sector needs.

Comment by Riaz Haq on November 4, 2022 at 11:40am

Pakistan’s Digital Lending Revolution
Not only is increased digital lending the need of the hour, it is also a very attractive business proposition.

https://aurora.dawn.com/news/1144545/pakistans-digital-lending-revo...


The good news is that the recent influx of venture capital into start-ups has led to the emergence of many new innovative financial technology (fintech) companies to solve these problems. Signals such as salary information, sales receipts and supply purchase data are being digitised and leveraged to establish creditworthiness with great success. Pakistani innovators benefit from the learnings from other emerging markets that previously cracked these problems with great success, including China, Indonesia, Africa and others. It should be no surprise that digital lending has started to make great progress in Pakistan.


For digital lending to truly take off in Pakistan, three key pieces of the ecosystem need to come together in a symbiotic manner: banks or money suppliers, fintechs and digital data-generating platforms. Banks are flush with cheap deposits from zero mark-up current accounts and therefore have the capital to lend. Fintechs, whose licences are governed under progressive lighter weight regulations, efficiently package small business and consume uncollateralised loans by acquiring and scoring them digitally. And finally, the platforms that collect the digital footprints of small businesses and consumers through transactional workflows, provide reliable signals for lending. They also embed financial services from fintechs into their platforms. The good news is that there are already several examples of all three stakeholders collaborating to lend in Pakistan with stellar results.

Pakistan’s five million micro and small businesses are stuck in a stagnant cash flow-starved hand-to-mouth status quo. Yet, they constitute 40% of our GDP and employ almost 80% of our non-agricultural workforce. Small and medium-sized enterprises (SME) lending data from fintechs shows that access to capital increases SME income by an average of 30%. Digital lending at scale to small businesses will have a tremendous impact on our economy, employment and standard of living. Similarly, less than 0.35% of people have received housing loans and consequently, home ownership remains dismally low. It is clearly in the country’s interest for responsible digital lending to take off.

Not only is increased digital lending the need of the hour, but it is also a very attractive business proposition. We have seen the entry of several well-funded foreign lending apps that have sprayed thousands of loans using sparse scoring data. As a result, their first cycle loan losses are exceptionally high, requiring expensive pricing to cover defaults. Many of these apps are unlicenced and engage in predatory practices. Customers are misled through claims of reasonably priced loans while hidden fees result in expensive triple-digit markup rates. Furthermore, the address books of customers are often harvested and their contacts are harassed if loans are not repaid on time. Most people who take loans from these apps are first-time borrowers with little financial literacy and can easily become over-indebted. Access to affordable credit with dignity is an important measure of a society’s evolution.

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