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.” 


Pakistanis gather to watch India clash on big screen

Updated 23 February 2025
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Pakistanis gather to watch India clash on big screen

  • Encounters between the two countries bear the scars of four wars and rank among the most-watched sporting events
  • Those watching in Karachi expressed disappointment because the game was originally meant to be played in Pakistan

KARACHI: On a sandy tract of land along Karachi’s coastline, hundreds of Pakistani cricket fans gathered in front of a big screen to watch their cricket team battle arch-rivals India in the Champions Trophy on Sunday.
Encounters between the two countries bear the scars of four wars and rank among the most-watched sporting events in the world.
Those watching in Karachi expressed disappointment because the game was originally meant to be played in Pakistan until India refused to travel across the border, citing government advice.
“My dad is a fan of cricket. He’s obsessed... ever since he found out he said he wanted to watch so I found this screen,” said Awal Khan, 40, who works as a cook and paid nearly $2 to travel to the venue, a high cost for most Pakistanis.
“I don’t like that India didn’t come... I’ve never been to the stadium but if India comes to Pakistan I will definitely go.”
For more than a decade, Pakistan and India have played only in multi-team events because of a strained political relationship. Pakistan went to India for the 2023 ODI Cup and expected India to return the favor by touring for the Champions Trophy.
Their once closely contested rivalry has grown more one-sided over the years. India have prevailed in seven of the eight completed ODIs in the last decade against Pakistan, with their last loss coming in the final of the previous Champions Trophy in 2017.
“We’re excited about the Champions Trophy but double excited for the Pakistan-India match,” said Raheel Sayeed, a 28-year-old engineer.
“I don’t think I’ll see Pakistan versus India in Pakistan any time soon. Both governments don’t want peace, especially India.”
Along another stretch of the Arabian Sea on an upscale promenade, hundreds more were slowly growing dejected as India took control of the match.
“If Pakistan loses I’ll be sad. But we have to have hope and we have to pray. But prayers aren’t enough,” said Zakira Bilal, 26, who came to watch the broadcast with her three young children.
“On our way here in the rickshaw, we discussed how Pakistan shouldn’t go to India to play when they don’t come here. Self-respect should be there.”


Islamabad sends 100 tons of relief supplies for war-affected Palestinians

Updated 23 February 2025
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Islamabad sends 100 tons of relief supplies for war-affected Palestinians

  • This is the 14th humanitarian relief consignment for Palestine, reinforcing Pakistan’s support for the people of Gaza
  • Israel’s war on Gaza, which began after Oct. 2023 attacks by Hamas, has killed over 48,000 people, injured thousands more

ISLAMABAD: Pakistan’s National Disaster Management Authority (NDMA) has sent another aid consignment for Palestinians that carried 100 tons of essential supplies, the Pakistani government said on Sunday.

This is the 14th humanitarian relief consignment for Palestine, which reinforces Pakistan’s unwavering support for the people of Gaza, according to Pakistan’s Press Information Department (PID).

This shipment is part of Pakistan’s ongoing humanitarian efforts and marks the 25th overall relief consignment sent to people affected by Israeli military actions in the Middle East.

The latest consignment comprised essential relief supplies, including bell tents, winterized tents, tarpaulin sheets and medical tools.

“The aid was transported via a chartered flight from Jinnah International Airport, Karachi, to El Arish International Airport, Egypt, for onward delivery to Gaza,” the PID said.

Israel’s war on Gaza, which began after Oct. 2023 attacks by Hamas, has killed over 48,000 people, injured thousands more and displaced almost all of the 2 million population of the territory.

Pakistan has so far dispatched a total of 1,478 tons of relief aid exclusively for Palestine, demonstrating the country’s continued commitment to supporting the people of Gaza in these difficult times, according to the PID.

Overall, the South Asian country has dispatched 1,961 tons of humanitarian aid, including 372 tons for Lebanon and 111 tons for Syria.

“The Government of Pakistan remains steadfast in its commitment to standing with the people of Palestine and will continue to provide humanitarian assistance based on the evolving needs of those affected by the ongoing crisis,” the PID said.

Pakistan does not recognize nor have diplomatic relations with Israel and calls for an independent Palestinian state based on “internationally agreed parameters.”

The South Asian country has also called on Israel to withdraw from Lebanese and Syrian territories, including Golan Heights, and allow United Nations (UN) peacekeepers to freely operate in the region to ensure compliance with international agreements.


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

Updated 23 February 2025
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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 23 February 2025
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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.