Thursday May 23, 2024

Govt committed to improving business environment: Alvi

By Jawwad Rizvi
September 10, 2021

LAHORE: President Arif Alvi has said the government is committed to improving business environment, introducing liberal monetary policies, investing in infrastructure and bringing in conducive regulations to encourage investors to consider Pakistan as their investment destination.

Addressing the virtual launching ceremony of the “Pakistani Startups – The Next Big Thing” by the Paklaunch on Thursday, he said Pakistanis proved their mettle in every sector and every geography around the world pertaining to business, medicine, engineering and technology.

The success stories of Pakistanis speak of themselves. He appreciated the efforts of the Paklaunch for developing linkages between local and international stakeholders in COVID times. The government of Pakistan is focused on entrepreneurship development and youth empowerment. The Kamyab Jawan Programme is a practical depiction of the commitment. The government has given Rs 20 billion loans without collaterals to the youth coming with new ideas and in the next year, it has planned to increase the disbursement of loans to the tune of Rs 100 billion, he added. Alvi hoped the Paklaunch will be helpful in nurturing entrepreneurship, and the international investors and mentors will support the local startups. The Paklaunch will establish goodwill between Pakistani startups and international investors and mentors.

Governor State Bank of Pakistan (SBP) Dr Reza Baqir said it is necessary to facilitate financial sector and make it attractive for investment in Pakistan. The SBP has made progress in three key areas. In June 2019, the SBP and the IMF jointly started a comprehensive economic reforms programme to stabilize the economy. The second area is to make the investment easy in Pakistan for which foreign exchange regulations are being changed to make investment in Pakistan easy. The SBP allowed the startups to raise capital through holding companies abroad for investment in Pakistan to make the investors legally comfortable. The SBP has been working on an ambitious agenda of digitization of the financial sector to reduce the cost of doing business, he added.

Chairman Special Technology Zone Authority (STZA) Amer Hashmi said the government is giving tax incentives, special relief on income and duty free imports and other incentives for tech entrepreneur system in Pakistan. He termed the Paklaunch a critical step in the right direction at a time when the federal government is focused on giving a licence to STZs across the country.

CEO Pakistan Stock Exchange Farrukh H Khan said Pakistan is the best opportunity market in the region and the world. He said Pakistan is the 5th largest country of the world, which focused on demand-driven investments. He suggested to international investors to understand the Pakistani startups and opportunities existing in Pakistan.

Ambassador at Large for Foreign Investment in the US Ali Jehangir Siddique said there are many success stories of Pakistani tech companies during the last two decades. Now the new global investors are putting their investment in the Pakistani startups or are looking for opportunities. The Pakistani tech startups are not only doing innovation by taking existing work model and replicating and improving them but are also shining in the critical work areas of block chain, AI, and data science. He invited the international investors to the journey of exploring the Pakistani tech as they have a great potential to surprise the world.

Founder Indus Valley Capital Atif Awan said Pakistan is the 5th largest population of the world with a strong middle-class group which is growing and by 2025, it will be the largest after China and India. The big middle class is pushing the consumer income and by 2027, it will be increased to $360 billion. This is the opportunity which is attractive for the venture capitals and the startups should not be missed. Further, Pakistan has proved resilience during the COVID-19 pandemic. Similarly, the death ratio from COVID-19 is 113 per one million which is much lower than Bangladesh (154), India (315) and the US (1899). Further, the access of cheaper internet at the mass scale attracts the startups and venture capitals to the country. The tech talent is in abundance in the country and around 30 incubators are operational to nurture the talent. There is almost over 400,000 software developers in Pakistan and every year, almost 20,000 IT graduates are passing out from universities. The Pakistani internet startups flywheel is spinning faster than Indonesia and India due to high smartphone adoption rate. In 2019, the Pakistani startups ecosystem looked like that of Indonesia in 2009. It means Pakistan had a journey in two years which Indonesia completed in five years.

Co-founder i2i Ventures Kulsoom Lakhani said the Pakistani startups ecosystem is shaping quickly with tremendous velocity and innovation. In 2012, there were only two incubators in Pakistan and no co-working space while now there are more than 25 incubators, over 80 co-working spaces, and more than 20 formal funders for the startups. Additionally, the regulatory environment for the startups improved as the State Bank of Pakistan and the Security and Exchange Commission of Pakistan (SECP) reduced barriers and restrictions with a progressive regulatory regime. This resulted in more funds raised by the startups in 2021, which is now amounting to $233.2 million against $445.4 million in 2015-2021. The Fintech development also witnessed an upward trend with the development of ecommerce in Pakistan. Various Global Venture Capital partners shared their experiences of investment in the Pakistani startups.

Founding Partner of Shorooq Partners Shane Shin said they are looking for areas of collaboration with Pakistani startups. Pakistan is an emerging market having great potential in the regional countries.

Founding Partner Gobi Partner Thomas Taso said the Gobi Partner started investing in Pakistani startups in 2018 and so far invested in 6 companies. Further, the company has made eight investments in Pakistan but it is yet to be made public. In total, the Gobi Partner made 15 investments in Pakistan along with the Fatima Venture which made it the most active early venture investors in Pakistan.

Manager Partner Wavemaker Paul Santos disclosed that they already made two investments in Pakistani startups one in the agro-based Ricult and the other in FMCG 7000+ Karyana stores. In Ricult, the company invested in combination of machine learning, satellite imagery, agronomic models and weather data. This helps small farmers improve their productivity and profitability.

Two panel discussions were organized in which local startups raised money from local and international venture capitalists and became the torchbearers for the ecommerce ecosystem of Pakistan. They discussed issues, challenges and the way forward. Panellists of the first discussion were Qasid Shahid, Hamza Jawaid, Dr Sara, Ahmed Khan, Mehr Farrukh and Mahlaqa Shaukat. Panellists of the second discussion were Rabeel Warraich, founder/CEO Sarmayacar, Ali Mukhtar, founder/GP of Fatima Gobi Ventures, Khurram Zafar, founder/director 47 Ventures, and Misbah Naqvi, founder/GP i2i Ventures.