Last year, over 83 Pakistani startups fetched $350 million worth of investment according to a report by Invest2Innovate, a startup community supporter. This year, the figure of total global capital is already promising with investment reaching to $136 million by the end of February.
With this lucrative boom happening within the startup ecosystem of Pakistan, industry experts might wonder “if this momentum is sustainable?”
Kulsoom Lakhani, the founder of Invest2Innovate addresses this question in an Al-Jazeera interview saying, “building health overall is really important”. By saying this, Lakhani refers to the efforts of businesses and investors in tapping the right talent pool, and improving policy and regulatory framework.
Digital Startups fetched highest investments
Pakistani entrepreneurs have reportedly introduced digital products to serve customer needs in quarantine and lockdown during COVID-19. The pandemic led Pakistan’s startup landscape to fetch investments rising from $65 million in 2020 to $350 million by the end of 2021.
“there were 184 million cellphone users at the end of 2021” reports Al-Jazeera. These ginormous users of smart phones combined with low cost and widely available telecommunication supported internet-based services. These services include ride booking, food and grocery delivery, and online shopping.
An early investment firm, i2iVentures featured a report on startup landscape of Pakistan revealing 2021’s five highest pitched startups. These include Airlift ($85m), Bazaar ($30m), Tajir ($17m), Qisstpay ($15m), and TAG ($12m).
Future’s bright and needs support
Experts in the startup ecosystem of Pakistan see bright prospects of the businesses which are currently growing at an increasing pace. One such investment body, Zayn Capital estimates an increase in startup-worth to $50 billion by 2030.
CEO Zayn Capital, Faisal Aftab told Al-Aljazeera that if you count Daraz and Food Panda, the current market stands at $3 to $4 billion. This evaluates to a 10x increase in startups-worth by 2030. Narrating the success story of Daraz, that’s a Pakistani based e-commerce platform which now offers services to various parts of the world, as a proof of Paki startups’ capability.
But great things come with great responsibility, and in the scenario of tapping the powerful and opportunity-rich startup landscape of Pakistan, challenges remain. There’s much need for reforms in a number of areas highlighted in the i2i ventures report. These include infrastructure building, ease-of-doing business legislation, developing skill sets, and enforcing a diverse and inclusive work environment.
For example, the report highlighted an area of improvement in Pakistan’s legislative framework for business growth. And it’s the lack of effective reforms in foreign companies buying shares in Pakistani firms.
There’s an opportunity for you
Entrepreneurs create innovative solutions that solve great problems of society. With ‘digital’ as the new solution platform of the world especially after 2019, there’s opportunity for you to use technology support to enable digital solutions in your area of interest.
There are two ends that you could choose to stand in order to extract lucrative value from the startup ecosystem of Pakistan.
Creating your own Startups
At the startup end, an individual (or a team) has an idea presented in a business model that meets certain need of a customer segment. This idea is a product or service that creates value for your target customers and for which your customer is willing to pay.
A business model is the systematic process of presenting detailed business concepts demonstrating the importance of the product. It also highlights the financial investment and returns on your business. It includes contents such as: business objectives, current market analysis, target customer segments, pricing, advertising, and financial projections etc.,
Maturing startups don’t just start at the business model stage, they need resources, and a supportive ecosystem to successfully take off as a business. There are three stages a startup needs to pass in order to grow at an ideal level.
Entrepreneurs at the pre-seed stage pitch their business model to investor capitalists- VCs. The purpose is to gain financial capital they need to kick-start their product for a smaller customer base. If the startup has successfully tested its product and has shown potential for success, now there’s seed stage where the startup now aims for their first official investment in order to reach out to more customers by scaling up their operations.
As an example, in Pakistan, in the mid of March, an AI based startup Metric raised $9 million at the pre-seed stage for its intriguing solution of automated accounting. The solution enables founders of small and medium sized businesses to access intelligent accounting insights.
Seed funding supports startups to become fully developed businesses by attracting quality customer base, and positive financial returns. Series A, B, and C are the subsequent funding stages that further improves the business model.
Invest in Worthy Startups
At the investment end, you don’t need to create your own idea to earn lucrative benefits. Instead you might want to look for a worthy startup where you can invest and create a deal for a handsome return down the line.
As listed above, the pre-seed, seed and series A, B, and C all require high net worth individuals or teams who financially back the startups to support in their development.
Trainings and skills
Now that you have an idea of how Pakistan is the current and future emerging market for tech startups, you know there’s a lot of untapped market potential right now. This might be an opportunity for you to acquaint yourself with the landscape of the Pakistani startup market and start gaining the benefits.
Taking a free course online on entrepreneurship will help you to know exactly how you can innovate an idea or support an idea into a running business that creates massive opportunities of wealth by enabling a solution-oriented approach.
