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

3 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.