Report: Right time to bet money on startups in Pakistan

Published: July 7, 2014
SHARES
Email
An insight to Pakistan’s startup culture, the report highlights the country’s potential as the next possible destination for serial entrepreneurs and investors. CREATIVE COMMONS

An insight to Pakistan’s startup culture, the report highlights the country’s potential as the next possible destination for serial entrepreneurs and investors. CREATIVE COMMONS

KARACHI: 

“Pakistan will grow; the only uncertainty is the speed at which it does,” Pakistan Startup Report concludes while noting “now is a very interesting time” for both entrepreneurs and investors to bet their money on startups in the world’s sixth largest population base.

An encyclopedia of the country’s startup culture, the document, along with its wiki, has been compiled by the World Startup Report, a Silicon Valley-based organisation that builds community-driven entrepreneurial guides for every part of the world.

The World Startup Wiki – a World Startup Report’s project that maps out business opportunities worldwide – has released its Pakistan chapter on its website.

The project will go live from Monday, July 7, as the officials provide the latest updates on Pakistan’s startup ecosystem. This is an ongoing work-in-progress as the data and insights are continuously subject to change, they say about the Pakistan Startup Wiki.

The World Startup Wiki was launched by Bowei Gai, SV-based serial entrepreneur and founder of CardMunch that was acquired by LinkedIn in 2011. The Pakistan chapter was co-authored by Gai and Adam Dawood of DYL Ventures Pakistan with contributions from the country’s startup community.

The purpose of the report is to document Pakistan’s startup ecosystem as a chapter of the World Startup Report through detailed analyses and reports based on the local culture, trends, key players and challenges, the document says. “We wish to share this report pro bono to encourage investors to take advantage of current opportunities.”

An insight to Pakistan’s startup culture, the report – which is loaded with statistics about the country’s Information Communication Technology sector and demographic details – highlights the country’s potential as the next possible destination for serial entrepreneurs and investors.

There are 12,500 Pakistanis working in Silicon Valley, the report says, and many Pakistanis who have studied and worked abroad are returning to start their own ventures.

“Recent investments are testament to the increasing interest and confidence of investors in local startups. Investors can see beyond the short-term issues in Pakistan and have foresight to capitalise on the long-term future potential,” the report said, quoting an official that went by @Kayzafar.

With its 180 million plus people – of whom 60% are between 15 and 45 years of age – Pakistan is the world’s sixth most populous country and the fourth largest middle class population in absolute numbers in Developing Asia, according to the report.

Despite a 16% internet penetration, about half of its 30 million internet users access internet through mobile phones – the country’s mobile penetration stands at 74% or 136.5 million subscriptions.

With the recent introduction of third-generation (3G) mobile technology, the country’s broadband user base is expected to be somewhere between 25 to 45 million by 2020. With most of its internet subscribers being active users of social media, the country is home to 14.4 million Facebook users (as of June 2014).

Pakistan lays claim to some of the world’s best IT engineers and designers many of whom choose to go into freelancing. There are approximately 1 million freelancers working online in the country, the report says.

Besides data and statistics, the report also highlights the country’s pro-investor policies. Pakistan has one of the most liberal policies in the region, it says. For example, foreign investors are allowed to hold 100% equity and full repatriation of capital.

It is impossible to quantify number of startups in the country, said Dawood who is also a frequent contributor of TechinAsia – an online technology media company based across Asia and the US. The report, however, mentions some successful startups originating from Pakistan.

The list includes Mindstorm Studios, Pakwheels.com, Cricout, Rozee.pk, Sofizar, Symbios.pk, Solotech, Groopic, Homeshopping.pk, Convo, Zameen.com and EatOye to name a few.

The report also mentions several international players that have already invested in the country to build a startup ecosystem – Rocket internet and Naspers for example.

The challenges

The report would have been incomplete had it not mentioned the challenges entrepreneurs are likely to face in the country.

“Due to the sensitive nature of certain religious and cultural issues social media channels such as  Facebook and Twitter have been banned at various points in the last five years,” it said, adding, “YouTube is still offline, and recently Twitter has been blocking certain tweets.”

Lack of basic infrastructure is another challenge facing Pakistani startups. “Low penetration of credit and debit cards means most orders are via Cash-on-Delivery,” it said – Pakistan is also the second highest country for credit card fraud. Beside this, poor transport infrastructure makes logistics suffer at times while power outages add to cost of business.

However, despite these challenges the authors are optimistic about the country’s growth and advise investors accordingly.

Published in The Express Tribune, July 7th, 2014.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.

Facebook Conversations

Reader Comments (24)

  • sree
    Jul 7, 2014 - 4:32AM

    1 million freelancers? Must be a mistake. There aren’t that many freelancers here.

    IT equals Income Tax in Pakistan and ICT equals Islamabad Capital Territory. That should tell you about where we stand as far as Information Technology goes. Parents actively discourage their children from going into this field. Why? Because they are ignorant and choose to remain so.

    There is a reason why most of the startups are getting funding from abroad. Pakistanis are averse to technology so we don’t invest in them. Foreigners already own all our cellcos. They will lord over our budding ecommerce sector too.

    Recommend

  • Jul 7, 2014 - 6:47AM

    Impressive, indeed!

    Recommend

  • PakBrit
    Jul 7, 2014 - 7:03AM

    Side point, but still relevant: Nawaz shareef/Shehbaz needs to stop handing out expensive laptops with Microsoft/Windows OS/software loaded on them.

    Start dishing out raspberry pi’s, or something similar which run purely on open source software.

    Push to create an open source culture. It wont cost as much as current programs, and it will pay massive dividends down the line in all sectors of technology. Then you shall see real innovation when it comes to technology. Also, Its not all about web apps, and trying to build the ebay of Pakistan. Whats more important than that, is giving access to technology to the maximum amount of people possible. When you do that, then the startup culture has a real base to build off, with original ideas being at the forefront of that culture.

    Recommend

  • Shuaib
    Jul 7, 2014 - 8:22AM

    Our nation will get a 10x better start up scene if there is less beaurocracy and no loadshedding.

    Recommend

  • Humza
    Jul 7, 2014 - 9:22AM

    @Shuaib: Isn’t that exactly what the current government is doing? Why do you think western analysts are more positive on the Pakistani economy in the 1 year the new government has come into power? They are seen as business friendly.

    Recommend

  • Saud
    Jul 7, 2014 - 9:31AM

    A lot of great work jas been done by Umar Saif, Chairman Punjab Information Technology board under the banner of Plan 9. Still a lot of room for improvement. Resolution of some basic issues by the govt will help make the scene more attractive for foreign investment.

    Recommend

  • Jibran
    Jul 7, 2014 - 9:37AM

    Doubt it. Even in the US, mere 2-3% of the startups ever break even. In Pakistan, with little indigenous market, I doubt the success rate would be any better, especially if the west remains the customer base. Remember, east Europe, India, China, Turkey are already entrenched, and Pakistan would struggle a lot for a market share in the west.

    Recommend

  • Blunt
    Jul 7, 2014 - 9:49AM

    Good news for Pakistanis, after a long time.

    Recommend

  • Jul 7, 2014 - 9:50AM

    given competent leadership & abolishing corruption , we can start up in 1-2 yearsRecommend

  • Random Passerby
    Jul 7, 2014 - 10:22AM

    @sree: Yes, there are plenty of freelancers here and No, parents do not actively discourage their children from going into this field.

    Recommend

  • Ali Jilani
    Jul 7, 2014 - 10:29AM

    We are doing petty things like phone app development, internet marketing and web development. Isnt that a disgrace to the cause called software engineering? Someone said it right. Pakistan only produces IT mazdoors (laborers).

    Recommend

  • OldWine
    Jul 7, 2014 - 11:01AM

    OMG! Illusion of grandeur has turned into delusion !!

    Recommend

  • Adam
    Jul 7, 2014 - 11:56AM
  • N.Sid
    Jul 7, 2014 - 2:25PM

    @sree:
    Just in one site they numbers more than 2.5 lacs. If you ad the other dozens of freelancers site available it can easily cross the 1 million figure.

    http://tribune.com.pk/story/516239/pakistan-3rd-highest-user-of-freelancer-as-self-employment-rises/

    Recommend

  • N.Sid
    Jul 7, 2014 - 2:39PM

    This ought to be the ‘Pakistan’s best kept secret’.

    Recommend

  • Moiz Omar
    Jul 7, 2014 - 3:02PM

    Great!Recommend

  • H.A. Khan
    Jul 7, 2014 - 4:10PM

    One of the hottest Silicon Valley sponsored start-up in Pakistan is CARBONATED TV (www.carbonated.tv). It is very professionally run and has very bright future

    Recommend

  • Kamran
    Jul 7, 2014 - 4:38PM

    @sree do some research dude! Pakistan is one of the top performing countries on freelancing websites. Pakistani freelancers are preferred over others because of higher quality of service, much better English speaking skills and competitive pricing. If you are lazy to do your own research, here is a quote from a story published earlier by Express Tribune:

    Matt Cooper, vice president of international enterprise for oDesk said: “The quality of projects delivered by Pakistani freelancers is at par with our top freelancer countries from around the globe. Pakistan ranks fifth on that list because Pakistani freelancers are regularly delivering quality work in a timely fashion on projects ranging from web design to blog and art jobs.” (Source: http://tribune.com.pk/story/588823/odesk-more-than-half-of-online-freelancers-are-pakistani/)

    “Pakistan ranks number 3, after US (#1) and India (#2), in terms of freelancers doing outsourced IT work on contract. Bangladesh ranks fourth, according to data from four biggest online outsourcing sites: Elance.com, oDesk.com, Freelancer.com, and Guru.com.”
    Source: http://www.riazhaq.com/2013/03/pakistan-third-most-popular-online.html)Recommend

  • Had enough
    Jul 7, 2014 - 6:40PM

    The potential in Pakistan is incredible – it can be right up there.

    We need to avoid taking short cuts, start paying taxes, and abiding by our laws (even if its traffic laws, not litter).

    We also need to kick the crazy mullahs and TTP out once and for all and focus on our economy and education sector, interact more with the outside world.

    Foreigners should be able to come to Pakistan and enjoy our great hospitality – not be bombed, kindapped or beheaded by the savages.

    Recommend

  • Hamad
    Jul 7, 2014 - 8:47PM

    If I know over a hundred freelancers in my personal circle, I don’t think 1 million freelancers is an over-estimation!

    Recommend

  • Jul 7, 2014 - 11:29PM

    Freelancing means not tax to government

    Recommend

  • Jul 8, 2014 - 2:40AM

    Yes, I 100% agree with the writer. I started my career as freelancer on odesk, and worked as full time freelancer for few years. Then stepped into local market and registered my software house and now I have a team of developers and designer and Alhdumdulilah we are going good, we are developing our own products and marketing.

    Recommend

  • Had enough
    Jul 8, 2014 - 7:07AM

    @Abdul Basit:
    Well done. Wish you all success.

    Recommend

  • Xeno.Indian
    Jul 8, 2014 - 2:53PM

    OMG.. I didn’t know thee are so many Pakistanis in the IT field which runs into millions. One million Pakistanis are working as freelancers are news to me. I have the delusion that Pakistan was an impoverished and backward state.

    Recommend

More in Business