Thursday, February 20, 2020

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.

Related Links:

Haq's Musings

South Asia Investor Review

Pakistani-American VC Asad Jamal Invested Early in Baidu

Pakistani Students Win First Place in Stanford Design Contest

Pakistanis Win AI Family Challenge in Silicon Valley

Pakistani Gamer Wins ESPN E-sports Player of the Year Award

Pakistan's Expected Demographic Dividend

Pakistan's Research Output Growing Fastest in the World

AI Research at NED University Funded By Silicon Valley NEDians

Pakistan Hi-Tech Exports Exceed A Billion US Dollars in 2018 

Pakistan Becomes CERN Member

Pakistani Tech Unicorns

Rising College Enrollment in Pakistan

Pakistani Universities Listed Among Asia's Top 500 Jump From 16 to 23 in One Year

Pakistani Students Win Genetic Engineering Competition

Human Capital Growth in Pakistan

Pakistan Joins 3D Print Revolution

Pakistan Human Development in Musharraf Years

7 comments:

Monis R. said...

Hi Riaz,

I noticed that the funding in your writeup is missing very notable deals and we may be underplaying investor interest.

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)

I think a full funding history should be definitively put on the record for al Pakistani startups... we're seeing very fragmented and partial data.

Monis R. said...

The good news is several new funds have invested or about to invest in Pakistan for the first time (in companies like Zameen, Rozee, Finja, Bykea, Airlift, Tez, Pakwheels, etc) and several local funds have emerged (Sarmayacar, Fatima/Gobi, Lakson, 47 Ventures, etc). Govt should certainly deploy capital in to this ecosystem to help catalyze. The pace at which the ecosystem is heating up is encouraging.

Riaz Haq said...

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-by-digital-economy-in-pakistan/


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.

Riaz Haq said...

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=IwAR1xyiifK4AHtn-TDC86cQTYOZnt7fbmBO0CMpnlSptEOUpOH2UX6Cdw41c

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.

Riaz Haq said...

Telenor Accelerator launches #EdTech Innovation program in #Pakistan. It provides curriculum and skill-based #education for school, college and university students, as well as additional courses incl personal development modules, #digital skills & #STEM https://www.telecompaper.com/news/telenor-velocity-launches-edtech-innovation-programme-in-pakistan--1339472#.XsgMksKQ1Mc.twitter

Telenor Velocity, the digital startup accelerator by Telenor Pakistan, has introduced its EdTech Innovation programme, to forge alliances with EdTech startups/scaleups. This initiative is launched in response to the closure of educational institutions and offices due to the coronavirus outbreak, Telenor said.
The programme provides curriculum and skill-based education for school, college and university students, as well as additional courses including personal development modules, digital skills, and STEAM (Science, technology, engineering, arts and mathematics) with a special focus on Robotics.

The Telenor Velocity EdTech Cohort has stepped forward to help students shift to online access and added a number of partners for this purpose including K-5 SABAQ Muse, a learning service based on videos, games and ebooks in multiple languages for early grades. The Edaksa service supports STEAM education and helps Pakistani high school students prepare and pass their standardized government exams; while the EDTechWorx content creation and collaborative delivery platform connects learner, educators and the overall industry. The Skills First online academy aims to allow users to develop their skills; while LearnObots aims to develop makers and creators of tomorrow, with a practical learning approach in the domain of Educational Robotics.

Riaz Haq said...

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-help-mom-and-pop-stores-source-inventory-in-pakistan/

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.

Riaz Haq said...

South Korea’s Eximbank plans to finance Pakistan’s large-scale IT project. #Korea to offer a $76 million-plus loan to #Pakistan for IT-related projects including electronic intelligence. #tech #informationtechnology

http://www.koreaherald.com/view.php?ud=20200707000143

South Korea’s state-run policy lender Export-Import Bank of Korea plans to offer a $76 million-plus loan to Pakistan for IT-related projects including electronic intelligence, a top official told The Korea Herald on Monday.

Eximbank established the Economic Development Cooperation Fund in 1987 to support industrialization and economic growth in developing countries as well as promote bilateral economic exchanges.

“The size of the loan and project is expected to be larger than the IT Park construction project in 2017,” said the official, who requested anonymity.

The project is aimed to support Pakistan’s small-and medium-sized IT firms and bolster technology cooperation between South Korea and the South Asian country.

“But there have been discussions about expanding IT cooperation between the two countries beyond infrastructure, which led to the project taking shape,” the official added.

The project is still in its early stages due to the coronavirus pandemic, the official stressed. Key details, such as the master plan and the exact size of the loan are yet to be discussed.

Eximbank is also planning to delay debt repayment of seven loans extended to Pakistan via EDCF that face maturity this year -- there are a total of 13 of such loans extended to the country so far.

This is in line with the government’s decision, announced in April, to provide more than $400 million to developing countries for virus-related programs and delay repayment of debt from 27 developing nations.

“The debt repayment issue is being discussed via the Paris Club,” the official explained, pointing to a group of major creditor nations who seek to find solutions for payment problems that debtor economies face.