Pakistani startups raise $85 million in 2021 with rush of foreign capital in fintechs 

This photograph taken on November 19, 2015 shows Pakistani employees of online marketplace company at work in Karachi. (AFP/File)
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Updated 13 June 2021
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Pakistani startups raise $85 million in 2021 with rush of foreign capital in fintechs 

  • Internet platforms engaged in finance have fetched around $22 million, mostly in foreign funding, since January 2021
  • Increasing mobile phone penetration and growing young population are major attractions for foreign funding in Pakistani startups

KARACHI: Venture capitalists poured over $85 million in funding in Pakistani startups in the first five months of 2021, with fintech companies riding a wave of interest by overseas investors, according to data from Invest2Innovate Ventures, which supports early-stage enterprises in untapped developing markets.

Pakistani Internet platforms engaged in finance and business, or fintech companies, have fetched around $22 million, mostly in foreign funding, since January 2021, according to Alpha Beta Core, a tech-driven boutique investment banking and financial advisory services platform. These include recent deals by TAG Innovation, KTrade and Abhi who have raised $12.1 million in total in separate rounds.

Industry experts say Pakistan’s increasing mobile phone penetration and growing young population are major attractions for foreign funding in startups. Official data shows Pakistan has 85 percent teledensity with 183 million cellular, 98 million 3G/4G and 101 million broadband subscribers. 

The decrease in global air travel during the coronavirus pandemic has also provided an unexpected advantage for startups in Pakistan, cutting out the requirement that investors visit the country as part of the due diligence process, and making them more open to discussing deals remotely over Zoom or other video conferencing platforms.

Syed Amin Ul Haque, federal minister for IT, told Arab News fintechs were “gaining traction” in Pakistan due to government measures to create an “enabling environment,” including by increasing broadband connectivity and reducing taxes on telecoms. 

“IT enabling environment has been created in Pakistan through policy measures,” Haque said. “Withholding tax was 12.5 percent and now it has been approved by the cabinet to bring it down to 10 percent, Federal excise duty on SIM cards was 17 percent and now we have reduced it to 16 percent. All these measures will be part of the financial bill in the upcoming budget, to be implemented from first of July 2021.”

He said during the last 10 months of the current fiscal year, IT exports had increased by 46 percent, the minister said. 
 
Kalsoom Lakhani, founder and partner at Invest2Innovate (I2I) Ventures, told Arab News data collected by her firm showed Pakistani startups had already raised close to $85 million in funding. 

“Which means we have surpassed the total amount, $65.6 million raised in 2020, by the middle of the [current] year,” she said. “Most of the funding has been made in e-commerce... but a high number of deals in fintechs, mainly pre-seed and seed, were made.”

Khurram Schehzad, CEO of Alpha Beta Core, said the growth of fintech in Pakistan was because of a realization that the country’s growing retail, wholesale and trade sectors required a better financial ecosystem. 

“Pakistan is a highly under-tapped market as far as financial inclusion goes — only under 25 percent of the population is banked while cash is rampant for payments,” Schehzad told Arab News. “There is a massive retail, wholesale and trade sector which needs a financial ecosystem with ease and comfort … All these pain points, with a large middle class and tech-savvy population and youngsters, there is a need for solutions at various stages of the financial ecosystem”. 

TAG, Pakistan’s first digital financial super app, last week announced it had closed $5.5 million in a pre-seed round led by Venture Capitals Quiet Capital management and Liberty City Ventures from the United States and Fatima Gobi Ventures. The funding round is the largest ever pre-seed in the Middle East, North Africa and Pakistan region. 

“The funds will be utilized to give access to Pakistan’s large unbanked population through digital accounts,” TAG co-founder and CEO Talal Ahmed Gondal told Arab News. 

Ali Farid Khwaja, chairman of Karachi-based stock brokerage KASB Securities that owns and operates stock trading app KTrade, said the company wanted to “target 10 million mobile phone users to invest in Pakistani stocks within the next four years.”

“We will be spending money to educate how to become partners in the country’s mega corporations and connecting them with financial markets,” he said.

The KTrade app, which launched in 2019 and allows investors to trade in equities at the Pakistan Stock Exchange (PSX), has raised $4.5 million in a funding round spearheaded by Hong Kong based investment firm TTB Partners and New York based VC HOF Capital. German investor Christian Angermayer also participated in the round, according to the statement issued on Monday. 

Another Pakistani fintech, Abhi, a Karachi-based salary advance platform, this week raised $2 million in a seed round led by Vostok Emerging Finance. Village Global Village Global, a US-based venture capital firm focused on early-stage startups, also participated in the round, marking its first fintech investment in Pakistan. Other participants of the round included Sarmayacar, i2i Ventures, Zayn Capital, and Portman Wills, the co-founder of Wagestream, a London-headquartered financial wellness platform. 

To be launched in July, next month, Abhi will provide employees with salary advances based on accrued wages. 

“We have been working on this idea for the past three years and our core point was financial inclusion,” Omair Ansari, co-founder of Abhi, told Arab News. “We want to address pain points in the manual payments process and allow employees to access their salary in advance when they need it.”

The startup is currently conducting a three-month pilot run involving 20 companies from the pharmaceutical, textile, and retail sectors. 

Ansari believes the Pakistani startup market is increasingly on the radar of global venture capitalists and “looking much better now.” He plans to tap the improving conditions to expand in Pakistan and then take his venture abroad.

“After focusing first in Pakistan, we plan to expand to Bangladesh, Sri Lanka, UAE and Saudi Arabia,” Ansari said. “Overseas operations are expected to commence within the next two years.” 


Pakistani security forces kill seven militants in separate encounters in volatile northwest

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Pakistani security forces kill seven militants in separate encounters in volatile northwest

  • The deceased militants belonged to Pakistani Taliban who have stepped up attacks against security forces in recent months
  • Pakistan accuses Afghanistan of sheltering militant groups behind attacks in its western regions, a charge denied by Kabul

ISLAMABAD: Pakistani security forces have killed seven militants in two separate engagements in the northwestern Khyber Pakhtunkhwa (KP) province, the Pakistani military said on Sunday, amid a surge in militant violence in the region that borders Afghanistan.

The first operation was conducted in Daraban area of KP’s Dera Ismail Khan district in which four militants were killed, according to the Inter-Services Public Relations (ISPR), the military’s media wing.

Three other militants were killed in a second encounter in Maddi area of the same district.

“Weapons and ammunition were also recovered from the khwarij [Pakistani Taliban militants], who remained actively involved in numerous terrorist activities in the area,” the ISPR said in a statement.

“Sanitization operations are being conducted to eliminate any other kharji found in the area.”

The South Asian country brands the Pakistani Taliban, or the Tehreek-e-Taliban Pakistan (TTP), fighters as “khwarij,” a historical reference to an extremist sect in early Islam known for rebelling against authority, declaring other Muslims as apostates, and justifying their killing.

Pakistan has seen a surge in militancy in KP since a fragile truce between the Pakistani Taliban and the state broke down in November 2022. The militants have stepped up attacks against police and security forces in recent months, with the military reporting deaths of 383 soldiers and 925 militants in various clashes in the country in 2024.

The latest operations came more than a week after militants killed an army officer and three soldiers in a shootout in KP’s North Waziristan district, according to the military.

Islamabad has frequently blamed the surge in militancy on Afghanistan, accusing it of sheltering and supporting militant groups that launch cross-border attacks. Afghan officials deny involvement and insist that Pakistan’s security issues are an internal matter of Islamabad.


Pakistan closes key border crossing with Afghanistan over ‘construction of trenches’ by Taliban authorities

Updated 23 February 2025
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Pakistan closes key border crossing with Afghanistan over ‘construction of trenches’ by Taliban authorities

  • The development comes at a time of strained ties between Pakistan and Afghanistan over a surge in militants attacks in Pakistan’s western provinces
  • The closure of Torkham border crossing in Pakistan’s Khyber Pakhtunkhwa has suspended movement of pedestrians as well as trucks carrying trade goods

ISLAMABAD: Pakistan has closed a key crossing on its northwestern border with Afghanistan over the “construction of trenches” near the frontier, a Pakistani police official said on Sunday, which has led to the suspension of cross-border movement.

The Torkham border crossing was closed late on Friday night, when Afghan Taliban authorities initiated “construction of trenches and other development work” along the border, according to Naheed Khan, a senior police official in Pakistan’s Khyber district that borders Afghanistan.

The closure of border crossing by Pakistani authorities has resulted in suspension of movement of pedestrians and trade between the two neighboring countries, but there were no reports of skirmishes between the two sides.

“It [Torkham crossing] is closed both for pedestrians and heavy vehicles since 12 at night on Feb. 21. No firing is reported from either side,” Khan told Arab News.

“Some families of Bacha Mina, a dusty village near the border on Pakistani side, have left the area for safer places to dodge any eventuality. Also some loaded trucks have returned to Jamrud Bazaar.”

There was no immediate comment from the Afghan side on the closure of the key border crossing.

The development comes at a time of strained ties between Pakistan and Afghanistan over a surge in militants attacks in Pakistan’s western provinces that border Afghanistan.

Islamabad has frequently accused Afghanistan of sheltering and supporting militant groups that launch cross-border attacks. Afghan officials deny involvement and insist that Pakistan’s security issues are an internal matter of Islamabad.

In the past, border clashes between Pakistani and Afghan forces have led to the closure of key crossings like Torkham and Chaman, severely disrupting trade and halting the movement of people between the two countries.

In August, the Torkham border was shut down for three days after the Afghan Taliban announced they were investigating reports of Pakistani fighter jets allegedly violating Afghan airspace in Nangarhar and Kunar provinces.

Tensions escalated again between the two countries in December, following reports of Pakistani airstrikes targeting alleged militant camps in Afghanistan. Afghan officials reported the strikes resulted in civilian casualties.


Punjab screens high-voltage India-Pakistan Champions Trophy match at 44 prisons across province

Updated 44 min 52 sec ago
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Punjab screens high-voltage India-Pakistan Champions Trophy match at 44 prisons across province

  • The South Asian heavyweights are playing at Dubai International Cricket Stadium as India refused to travel to Pakistan
  • The screening at Punjab prisons is part of Prison Reforms Policy to make inmates better citizens, home department says

ISLAMABAD: Pakistan’s Punjab province has arranged for screening of the much-anticipated India-Pakistan Champions Trophy match at 44 prisons across the province, the Punjab home department said on Sunday.

Pakistan skipper Mohammad Rizwan won the toss and elected to bat in the blockbuster clash against India in Dubai on Sunday as his side looked to stay alive in the tournament.

Defending champions Pakistan lost the tournament opener to New Zealand and another defeat will virtually end their chances of making it to the semifinals.

Punjab Home Secretary Noorul Amin Mengal had directed the provincial prison authorities to make special arrangements for the screening of the match for inmates.

“Positive activities are being promoted to make prisoners better citizens under the Punjab chief minister’s Prison Reforms Policy,” the home department said in a statement.

“Special arrangements were also made in juvenile prisons for live broadcast of cricket matches. Children dressed in Pakistani cricket team uniforms enjoyed the match.”

The arch-rivals are playing at the Dubai International Cricket Stadium after India refused to travel to Pakistan to play their matches. The last time these two sides met in the Champions Trophy was back in 2017, when Pakistan beat India in the final by 180 runs in London.

Jail superintendents and senior officials were also watching the match along with prisoners in jails across Punjab.

“Under the Prison Reforms Policy, small and big industrial units and libraries have also been established in jails across Punjab to promote education and training,” the home department added.


Islamabad says new energy policy to attract $5 billion in investment

Updated 23 February 2025
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Islamabad says new energy policy to attract $5 billion in investment

  • New policy allows exploration companies to sell 35 percent of future gas discoveries to private entities 
  • Pakistan says main objective of new policy is to encourage public-private partnership in energy sector

ISLAMABAD: Pakistan has developed a new energy policy that will help the country attract $5 billion in investment through public-private partnerships, state-run media reported on Sunday, with the move expected to help create thousands of jobs and reduce reliance on imported fuel. 

Pakistan has aggressively pursued reforms in its energy sector, which has long struggled with financial strain due to circular debt, power theft and transmission losses. These problems have led to blackouts and high electricity costs in the South Asian country. 

Pakistan’s increased reliance on imported fuel has also drained its foreign exchange reserves, bringing the country to the brink of a sovereign default in 2023 before a last-gasp $3 billion bailout by the International Monetary Fund (IMF) came to the country’s rescue. 

“A new policy has been introduced for the development and prosperity of energy sector with the support of SIFC,” state broadcaster Radio Pakistan said in a report, referring to the Special Investment Facilitation Council (SIFC) body. 

“The policy will enable the energy sector to attract up to 5 billion dollars in investment and it will pave the way for 35 percent private investment in this sector.”

The report said that the main objective of the policy is to encourage public-private partnerships in the energy sector. 

A separate video released by the SIFC said the policy allows production and exploration companies to sell 35 percent of future gas discoveries to private entities through a comparative bidding process. 

The SIFC said the policy will help create thousands of jobs in Pakistan, boost gas production, help the country rely less on expensive imported fuels and accelerate its Gross Domestic Product growth. 

Pakistan constituted the SIFC, a hybrid civil-military body in June 2023 to attract international investment in agriculture, energy, livestock, tourism, mining and minerals, and other priority sectors. 

The SIFC has targeted mainly Gulf countries and has signed agreements worth billions of dollars since it was formed in 2023. 


Indian Hindu fans pray for victory over Pakistan in Champions Trophy clash

Updated 23 February 2025
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Indian Hindu fans pray for victory over Pakistan in Champions Trophy clash

  • Fans offer ‘yajna’ and ‘aarti’ Hindu prayers in Indian cities of Kolkata and Prayagraj on Saturday 
  • India and Pakistan enjoy one of fiercest rivalries in sports due to bitter history, political tensions 

Islamabad: Indian Hindu fans were seen offering special prayers as their national cricket team locks horns with arch-rivals Pakistan in a blockbuster Champions Trophy 2025 clash in Dubai today, Sunday. 

India and Pakistan enjoy one of the fiercest rivalries in sports. The nuclear-armed neighbors have fought three wars since 1947 ever since they gained independence from the British, fueling passion and emotion in millions on both sides of the border every time the two teams meet on the cricket field. 

India’s Hindu fans were seen offering special prayers in the eastern Kolkata and northern Prayagraj cities on Saturday for their cricket team’s success against Pakistan. 

“India and Pakistan are going to play against each other, and we have prayed to mother Triveni (confluence of three rivers: Ganga, Yamuna, Saraswati) and mother Ganga (river Ganga) that tomorrow’s match turns out to be in favor of India,” Hindu devotee Pradeep Pandey told Reuters in Prayagraj on Saturday.

In Prayagraj, on the sidelines of Maha Kumbh Mela (The Great Pitcher Festival), fans and devotees performed ‘Aarti’ (flame ritually waved to deities) at the shore of the Ganges, praying for the Indian cricket team’s win. 

In Kolkata, fans and devotees were seen performing ‘yajna’ (offering to the God in front of a sacred fire) in the name of Goddess Kali.

India, who refused to travel to Pakistan for the Champions Trophy citing government advice, will be playing all their matches in Dubai. They kicked off their Group A campaign with a comfortable six-wicket victory against Bangladesh earlier this week. Pakistan’s title defense, meanwhile, looks in disarray after their comprehensive defeat to New Zealand.

India have won seven of the eight completed ODIs in the last decade against their rivals they play only in multi-team events because of a strained political relationship between the two countries.

Pakistan are the defending champions of the Champions Trophy tournament. The green shirts, under the leadership of former captain Sarfaraz Ahmed, beat India in 2017 in the final by 180 runs to win the tournament.