Investment in country’s startups at this point a smart bet. STOCK IMAGE
Be it social networking giant, Facebook, video chat and voice calls application, Skype or mobile game developer, Supercell, all have one thing in common: once tiny startups, they are worth billions of dollars today.
One great idea – Facebook, for example – has literally changed the way today’s businesses market their products and reach customers. That’s how technology can affect our lives – not to mention Mark Zuckerberg, the entrepreneur behind the social networking giant, is now worth well over $30 billion.
Can a similar idea emerge out of Pakistan? Can the country produce the next billion-dollar startup? Maybe, it can.
Industry experts, such as Lahore University of Management Sciences Center for Entrepreneurship’s Executive Director Khurram Zafar, believe some Pakistani startups have the potential to join the Billion-Dollar Startup Club – companies that are valued by venture capitalists (VCs) at $1 billion or more as described by The Wall Street Journal.
One of the founding board members of Plan9 – a technology incubator of the Punjab Information Technology Board, Zafar says technology entrepreneurship ecosystem in Pakistan is at a tipping point and investment in the country’s startups at this point will be a smart bet.
Despite lack of access to capital, the single largest hurdle facing Pakistani startups, many entrepreneurs have already earned rave reviews in the technology world. This young pool of talent reflects the country’s potential in the field of information technology.
Take for example, Convo Founder and CEO Faizan Buzdar, a multi-platform social network enterprise. The company raised $5 million from a top-tier VC firm, Morgenthaler Ventures, in 2013 and earned a lot of appreciation from technology focused publications. President of the United States Barack Obama also praised Buzdar, stating people like him could help promote innovation in America’s technology industry.
Farhan Masood, Founder of SoloMetrics, is another talented entrepreneur that earned international recognition for producing the world’s fastest retina and face scanner algorithm. In 2014, Masood signed a joint venture with Mace Security International, an American company that manufactures personal defence, safety and security products.
Lahore’s Mindstorm Studios, according to experts, is another startup that has the potential to make it big. In 2010, its gaming app Whacksy Taxi hit the top spot on App Store in more than 25 countries. The company had developed the official game for 2011 Cricket World Cup, which was previously made by leading game developers Electronic Arts United States and Codemasters of the UK.
Its latest app, War Inc: Nations Fury already has installs ranging between 500,000 and 1 million – one of its users spends up to $5,000 a month on the games, indicating the potential the company has.
With access to capital, Zafar says they can market their games on a big scale and become a global player like Supercell – the Finnish mobile gaming company, which earns Rs46 billion in profits before tax and was founded in a country that has half the population of Lahore, according to Zafar.
When it comes to discussing the country’s IT workforce, one can’t rule out Rafay Baloch. The 21-year-old computer science student of Bahria University was recognised as the world’s top security researcher in 2014.
Baloch, who aspires to run his own information security company, clearly reflects the kind of talent and potential the country produces.
These are only a handful of examples of the large pool of talented IT workforce that is shaping the future of Pakistan’s small IT industry ($2 to $3 billion). Almost all of these entrepreneurs have made the headlines well before the recent wave of technology incubators and other startup support initiatives.
Plan9 was the only technology incubator for local entrepreneurs that had some kind of official backing but it was limited to Lahore only. However, more programmes have been launched recently to boost the country’s startup ecosystem. For example, The Founder Institute, a leading entrepreneur training and startup launch programme, recently launched its Karachi chapter. It promises to create a Silicon Valley-like startup ecosystem in Pakistan and launch over 30 meaningful and enduring technology companies per year in the city.
The Nest I/O, a technology incubator of Pakistan Software Houses Association, is the latest addition to this growing segment. Given this incubator has the official backing of the country’s IT industry and partners with over 30 startup hubs around the world, it can certainly provide a much-needed platform for the country to produce the next billion-dollar startup.
The writer is a staff correspondent
Published in The Express Tribune, January 26th, 2015.
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COMMENTS (36)
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@ gp65
Your point of view is usually finding fault with anything positive about Pakistan. I have never seen you doing the other way round. . These companies grow from nothing to millions and from millions to billions. That is why people with less money go for online business (they wouldn't even afford a grocery shop in real life). . I remember your reasoning that Waar was a flop movie. While you should have appreciated that a Pakistani film is doing business in such big numbers in the history of Pakistan. Even breaking all previous records was not enough because it was something positive about Pakistan.
@N.Sid: The url you have attached relates to 2012. The url attached by Vishnu Reddy talks about market capitalization today. As he has indicated, there is just one company which has a valuation over a billion dollars. There are 4 other companies on KSE with valuation aove $700 million. So his comment is loical.
Even if you read the article, it appears that a company with a $5 million valuation is considered to be in line for a billion dollars valuation. That is illogical.
@Vishnu Reddy: Here is the billion dollar club, and going strong.
http://tribune.com.pk/story/483448/rising-tide-consumer-centric-companies-dominate-the-near-billion-dollar-club/
@Hamiduallah: I refer you to the following post by optimist :- India is far ahead but we only started this seriously in 2002/3 under Musharraf and the figure $2.9 billion was mentioned in 2009 for the first time. . Firgure is still small but it is growing by 30% and with current developments, is expected to grow even more. . So Mr. Doubting Thomas with 30% growth per Annum Pakistani IT will reach a Figure of US$ 120 Billion. If the Growth is over 30% than Pakistan I T Industry will most definitely overtake the Indian I T Industry. . You cannot argue with that! Cheers
We IT professionals need Support from Government for payment solutions, SBP should accept Paypal and other fund transfer companies in Pakistan so that we can grow at more higher pace than ever before, currently most of the IT professionals are not able to bring the foreign exchange to Pakistan because of these restrictions.
@Syed Rehan: Perhaps you should find out more about TCS, Infosys, Wipro HCL....etc. Or perhaps research center of HP. Texas Instruments, ZTE (Surprised?), Microsoft, and yes GOOGLE here in Bangalore. And BTW what's wrong with call centre jobs? So long as anybody doing an honest day's work and earns his living deserve respect. Do not demean people who earn their living putting in hard work.
@Syed Rehan.
Spoken like one who thinks IT stands for Islamic Terrorism rather than Information Technology.
@usman: Regardless of some individuals, this is the narrative most Indians want to hear from Pakistan..
@Naresh: do you actually call indian sweatshops an IT industry. Indians are only famous for cheap labour and crappy code copied from internet. Also my friends 'call center' operations for Telstra or Dodo doesn't mean IT...
The sarcasm from Indians is just repulsive and cringe worthy.
@optimist: Pakistanis can do whatever Indians can do. At least, I don't have any doubts about that. All that you need to do is be focused.
Good luck.
Nice to hear Nice News from Pakistan ... Keep it coming
Nice to hear Nice News from Pakistan
Tradekey is also worth to mention based from karachi, a good internet business example.
Very impressive growth in Pakistan's tech scene. One of our first venture funded tech startups was ROZEE.PK which has now gone on to buy other global competitors and create a global Made In Pakistan brand. Hope to see more of this.
@Naresh:
Lets not be so sarcastic. Giving to the differences in GDP of India and Pakistan owing to their respective population sizes its very competitive. $2 to $3 billion stands 1.3 percent of its GDP. Indian IT sector also had grown from similar figures in past 20 years from 1.2 percent to 7.5 percent of its GDP. We must also consider the fact that major international IT firms are investing in India in view of its market share based on Population size not immediate demand. The internet penetration in South Asia is pretty low compare to the rest of the world. Only 20 percent of Indian population uses internet half of the world average which is 42 percent. (Figures for Pakistan are much lower only 15 percent). Pakistan on the other hand have to struggle and compete on its own. It is the same difference that exist in nuclear technology, India was comfortably assisted by Russian block to develop and maintained many of its reactors and research programs and is now being assisted by European block as well. Pakistan had to struggle the opposition, today it has shown its talent in that sector. Sometimes opposition motivates more than abetting. Its flying against the winds but Pakistan do have enormous talent though small but very aggressive to move beyond its proportionate share of the world market. It outshines other nationalities in many market always more than its proportional representation. I am confident it will do the same in IT. (unfortunately it does the same in negative stuff too, well talent works in all directions)
@Naresh: I believe you are making fun of us. Well maybe you can as we are quite small compared to any other major country. But then attitude like yours provides me relief because with your senseless attitude and your obsession with Pakistan indicates that you will lag behind others in the future. If you keep concentrating on your own country, you can touch great heights, but alas your obsession with us !!!
I think we have some problems but the solutions resides with in so work hard and make our own way.
due to power failures and poor Internet connectivity, zuckerberg in Pakistan would have set himself on fire at D chok..........:P
Make no mistake, there is no shortage of exceptional talent in this country - it's just that most of it moves abroad where their talents will be appreciated (the vast number of white-collar Pakistani professionals in North America and Europe are proof of that). Here what will happen is that the govt will try to mooch off of any billion-dollar startup under the guise of 'corporate taxes' and force them to move elsewhere, worsening the brain drain.
I am an IT professional working in Germany, Pakistan has potential of being on the Top in IT. We have examples live Arfa Karim, other children who have done Microsoft Certification under the age of 10 years. The only thing we miss is the resources and appreciation from out government and still lack of interest of out top leadership in this field. Pakistan is working as it should be in the most dynamic and most worth field of te World which is IT.
I have been trying to find out more about the IT scene in Pakistan for some time now, but reliable up to date d ata is kind of hard to get. Is a USD $1 billion valuation for a IT startup in Pakistan a possibility in the near future? How many listed businesses on the KSE have such a valuation?
A breakthrough idea is always a possible, but is the enabling environment present?
. Let us know when you reach 20b. Then again, CII may declare infotech as 'haraam'. Who knows?
@Corrector, I believe he was referring to the net worth of Mark Zuckerberg, not the value of Facebook as a company.
@Corrector: Pakistan GDP is worth 240 billion USD on nominal basis, and 840 billion USD on purchasing power basis.
http://en.wikipedia.org/wiki/EconomyofPakistan
The IT industry worth was USD 2.8 billion in the year 2011-12, now it must be larger, and if you look into the undocumented and informal economy which is about 45 percent of the documented economy, the actual size must be more, just like the GDP which is more than the actual official figure
Facebook worth more than $215 billion - far bigger than Pakistan's GDP. Get your facts right.
@Pessimist:
You speak as if you have conquered a million planets thus far.
Farooq, thanks for an inspiring article. Feel so proud of our tech talent. Pessimist and Leela4fun, even if Pakistan's GDP per capita hits $3000, tax base increases to 2 million people, honest elections are held, Pakistan becomes a 5-7% contributor to global textiles, joblessness eliminates, people like you will continue to whine and moan. But well, people like those mentioned in this article always need naysayers like you to prove wrong!
The water kit car has the potential for revolutionizing the world. That would be a multi-billion dollar entrepreneurial venture.
West pioneered logistics, shipping, manufacture in the nineteenth century; today, they are leaders in the tech game. While the West now plans to go in space, Pakistanis like Zafar are in touch with the "take my picture" business.
Plan 9 and Khurram Zafar are nothing but flashy attire and environment; LUMS can only accommodate six business at a time; clearly you have no idea that Mark's net worth is "paper money."
@ Naresh,
India is far ahead but we only started this seriously in 2002/3 under Musharraf and the figure $2.9 billion was mentioned in 2009 for the first time. . Firgure is still small but it is growing by 30% and with current developments, is expected to grow even more.
Major banks should encorage people to invest in their funds that promote these entrepreneurs. Imagine even if 10% of the ventures are successful, the returns could be thousand times more than what you earn in interest. Banks basically spread the proportion of customer investments in various projects in order to reduce risks.
WOW! Pakistan’s IT industry is Worth $2 to $3 billion!! Superb. Well Done Pakistan's IT Industry. Soon you will overtake the Indian I T Industry. Cheers