As there are millions of dollars influx in Pakistan, due to startups like Dastgyr, Finja, and all of that, but should we start to celebrate that now? What is the reason behind the hotfoot of Pakistani startups?
Let’s deconstruct that a little bit, if we look closely Pakistani startups are playing in mainly two domains digitizing the retail industry and fintech, the main chunk of that $244 million which is raised in 2021, is consumed by startups playing in these domains. That’s all because of the Careem mafia, we have to give credit to Careem for the boom of startups in Pakistan because one of its co-founders is Pakistani, and he gave that successful startup model nationwide. Mudassir Sheikha built those tech headquarters in Pakistan and attracted young and booming talent. The Careem mafia has acted like an academy for the young minds of Pakistan, and most of the Careem exes have launched ride-hailing startups. They know how to transport people, and further, they have diversified it into transporting goods.
As there was none other than less, digitizing in Pakistan and it has the need to target the huge market, yet they decided to target the retail industry. They gave them a clear value proposition and helped them to uplift the scale of their business. The presence of the Kiriana store online is what none of us imagined if we go back 10 years.
On the other hand, microfinance like Easypaisa and JazzCash has also brought down the concept of sending and receiving digital payments at some scale. Due to this the word “Fintech” which is an upgraded version of microfinance is now used all over Pakistan and startups like Finja, Sadapay, etc have started to grow. Initially, they don’t have a big market right now in Pakistan, but they are working to create the demand in it.
It all has to start somewhere, and as we know the percentage of young population in Pakistan is around 63%, and the boom of 4G and 5G is picking up the pace these all points just add more confluences on why the mushroom growth of startups is beginning to happen.
Therefore, Big investors are popping into the startup industry of Pakistan, and many startups have raised funding and the millions are written in their valuation book. All of this is happening but that’s exactly what leads us to my second question “is this is the time to celebrate?” I don’t think so. I agree that the tables are turning around, and with no doubt, they are giving money because of the potential it holds but we have to deliver what we promised the investors. The whole world is now looking at Pakistani startups, not just one or two in isolation but the whole ecosystem. Pakistani startups ecosystem as a whole should deliver and generate those sparkly ROIs for the investors to let this industry grow exponentially.
My cautious optimism came from a point that the graph of Pakistani startups is straight bullish, and as fast the graph goes up it has more chance of going down at the same pace. If we fail to generate that kind of value, for those millions of dollars we in the future will have major difficulty in getting back into this space. The common opinion will propel that “Pakistan is a difficult place to do business”.
In conclusion, having startups and getting those big bucks is great but as we all have watched spiderman “With great power comes great responsibility.”