Entrepreneurs build nations. Name any country, be it an economic power or amongst the developed countries, their economies were built by entrepreneurs, and in the past decade, Pakistan too has seen entrepreneurs emerge. However, in order to uplift our economy to where it ought to be, we need entrepreneurs to be at the forefront, and although the past seven years have seen a rise in the number of start-ups, our journey began two decades ago.
Phase One – The dot com boom:Entrepreneurship in Pakistan took its first steps in the early 2000s when the dot com boom started to disrupt industries across the world. Start-ups such as PakWheels, Zameen.com and Rozee.pk, came into existence laying the foundation of Pakistan’s start-up landscape. Their founders disrupted traditional markets and introduced a new way of doing business – online marketplaces, something unheard of before in Pakistan.
PakWheels: In 2003, Suneel Munj disrupted the traditional marketplace for classified ads for cars by bringing together buyers and sellers on a single online automobile trading platform. In 2014, PakWheels became one of the first few start-ups to raise investment – $3.5 million – one of the largest deals closed by a Pakistani start-up at the time. It was through this start-up that for the first time Pakistanis experienced the power of the internet in bringing convenience to their lives. To date, PakWheels stands as the undisputed king of automobile trading.
Zameen.com: In 2006, two brothers, Zeeshan Ali Khan and Imran Ali Khan, disrupted the real estate industry by becoming the first online marketplace for property buyers and sellers. What started off in a small room by two entrepreneurs is now the largest online real estate portal, with clients spread across the globe. The start-up raised its first round of investment in 2014 and to date has raised four rounds of investment, equivalent to a total of more than $130 million, and employing more than 3,000 Pakistanis.
Rozee.pk: In 2007, Monis Rahman founded Pakistan’s first online portal that connected job seekers with employers. Shortly after its inception, Rozee.pk raised two million dollars and which helped to further scale it. Rated among Pakistan’s top job portals, today more than 95,000 employers post openings on Rozee.pk, with more than six million professionals registered on it across the country.
Phase Two – Rise of the incubators:Although with the emergence of PakWheels, Zameen and Rozee, start-ups began to take off, an ‘ecosystem’ that nurtured and supported passionate individuals with a flair for entrepreneurship, did not exist, and it was only in 2012, with the advent of Plan9 (Pakistan’s first tech incubator) that entrepreneurship took a leap forward. From 2012 to 2015, incubators such as The Nest I/O and NIC and accelerators like PlanX started emerging and energies were channelled into acquainting youngsters in the metropolitan cities with entrepreneurship. While incubators and accelerators were going through a formative phase, efforts were put into replicating the Plan9 model in universities across Pakistan. Young people and their families now started to see entrepreneurship as an acceptable career option, an alternative to conventional career paths or joining the family business.
Then came the years 2016 and 2017. This was when Pakistan started seeing a mushroom growth in incubators nationwide, with start-up founders coming from not only the metropolitan cities of Karachi, Lahore and Islamabad, but the tier-two cities as well. By this time, as the inclination among the young towards start-ups was increasing fast, the lack of funding to scale them became the underlying challenge faced by Pakistani entrepreneurs.
While seed investments in start-ups started taking place by 2016 (MangoBaaz for example), it was still not institutionalised and a VC culture was almost non-existent. For the ecosystem to expand and strengthen, start-ups had to scale, and accessing funding became a necessity. It’s not that Pakistan did not have individuals with the capacity to invest in start-ups, but they had to be convinced to invest their money into early-stage start-ups. As a result, a major gap between entrepreneurs and investors needed to be bridged. As it turned out, this was the right time to bring the two together on one platform and Idea Croron Ka – Pakistan’s first business reality show – was launched. For the first, time start-ups appeared on mainstream mass media and entrepreneurship ceased to be the domain of the privileged; it had reached the public at large. On a mission to ‘redefine heroes’, Idea Croron Ka gave youngsters a level playing field and access to investors regardless of their background, financial standing or network – and the start-up culture was born; one that made entrepreneurship a household concept.
Phase Three – Influx of Funds:Fast-forwarded to 2019, foreign venture capitalists were drawn to Pakistan and began investing in home-grown start-ups – Kleiner Perkins, Tiger Global, Firstminute Capital, First Round Capital, 20VC and Hustle Fund, to name a few. Aatif Awan, founder of Indus Valley Capital, played a significant role in attracting foreign VC networks to Pakistan. Start-ups like Airlift, Bazaar and Tajir came into the limelight with hundreds of millions of dollars raised collectively. How successful they were in pulling off the VC funds is altogether another debate; what is important was the recognition that the Pakistani start-up landscape received on a global stage, and the confidence to dream big that was infused among aspiring entrepreneurs. As a consequence of foreign VCs injecting funds into Pakistani start-ups, the local VC ecosystem began to take shape. Zayn Capital, Fatima Gobi Ventures, Sarmayacar, 47 Ventures, Deosai Ventures, HBL Ventures, Karavan, i2i Ventures, Virtual Force and Walled City Co., are a reflection of this progression. The years 2021 and 2022 saw the boom of VC funding in Pakistan.
Where is the Pakistani start-up ecosystem headed?The evolution of Pakistan’s start-up ecosystem is a depiction of the trend seen in any emerging economy – taking off from e-commerce verticals, followed by fintech, moving on to edtech and healthtech start-ups – and now the wave is headed towards AI. Pakistan’s rapidly developing technological and entrepreneurial landscape is qualified to become the next tech hub and innovation centre in Asia. However, this will be largely dependent on how fast start-ups scale horizontally across different verticals. The challenge is that, apart from the tech sector, industry dynamics in Pakistan still largely operate on conventional models and methods, making digital transformation the need of the hour, if start-ups are to disrupt local industries. Innovation is the keyword here. The future of Pakistan’s entrepreneurial ecosystem is meshed in innovating, disrupting barriers and changing who you work with. As large corporations seek to increase their competitiveness globally, the missing link is to scale and come up with innovative ways to capture new markets at lower costs. This is where the role of start-ups comes into play.
Start-ups need to work closely with corporations and leverage their learnings to offer innovative and viable solutions, while organisations need to display openness in moving away from traditional ways of working and incorporating start-ups in their systems. Start-up’s innovative ways of doing things paired with the experience of organisations is the ingenious disruptive combination that will bring unmatched value addition to the economy, benefiting players at all three ends – companies, start-ups and the public.
Pakistan’s strength lies in a young population brimming with ideas and who can alter the way things are done. As a developing country, Pakistan has its fair share of challenges, but if seen from the lens of an ‘entrepreneur’, challenges are nothing but opportunities waiting to be explored.
Nabeel Qadeer is Deputy Group CEO, BenchMatrix and President, TiE Lahore. email@example.com