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


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
KHURSHID AHMED 
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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
Updated 13 June 2021
KHURSHID AHMED 

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.” 

Topics: Pakistan fintech

Baloch rights group accuses authorities of arrests, suspending Internet ahead of protest in Gwadar

Updated 6 sec ago
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Baloch rights group accuses authorities of arrests, suspending Internet ahead of protest in Gwadar

  • Baloch Yakjehti Committee has organized a gathering in Gwadar on Sunday to protest alleged rights abuses in Balochistan
  • The Pakistani state denies any wrongdoing in the southwestern province, which has been the site of a low-level insurgency
Updated 6 sec ago
SAADULLAH AKHTER

QUETTA: Baloch Yakjehti Committee (BYC), which advocates for rights of ethnic Baloch people, on Saturday accused Pakistani authorities of suspending Internet and arresting dozens of its members in Pakistan’s southwestern Balochistan province, a day before a protest in the port city of Gwadar.
Led by 31-year-old human rights activist Dr. Mahrang Baloch, the BYC summoned the ‘Baloch Raji Muchi,’ or Baloch National Gathering, in Gwadar this month to rally the masses against alleged human rights abuses and heavy deployment of security forces in the southwestern Pakistani province.
Pakistan’s Balochistan province, which borders Iran and Afghanistan, is the site of a low-level insurgency for the last two decades by separatists, who say they are fighting what they see as unfair exploitation of the province’s wealth by the federation. The Pakistani state denies the allegation.
Through social media platforms, the BYC has been mobilizing and inviting people from across Balochistan for the gathering, which is scheduled to take place on Sunday at the Gwadar Marine Drive, an important thoroughfare in the coastal city.
“The authorities have started blocking highways in Balochistan in a bid to intercept convoys of Baloch people coming to attend Baloch Raji Muchi in Gwadar and police have arrested more than 100 BYC members from various districts of Balochistan,” Baloch told Arab News.
“There has been a complete blackout of Internet in Gwadar and Kech districts since Friday evening and mobile service is likely to be suspended today. We are concerned that the government will intensify crackdown against BYC members as they have already registered four FIRs (first information reports) against our members in the Kalat and Hub districts.”
Shahid Rind, a spokesman for the Balochistan government, denied allegations of a crackdown on the BYC and Internet suspension in Gwadar.
“The Balochistan chief minister has clearly said on the floor of the provincial assembly, the constitution of Pakistan gives people the right to a peaceful gathering, but the government has the right to decide the venue for it,” he told Arab News. “No one will be allowed to hold such gatherings based on their own will.”
Arab News spoke to a number of people in Gwadar and Turbat districts, who said mobile Internet had been suspended in both districts since Friday evening.
Gwadar, situated along the Arabian Sea, lies at the heart of China-Pakistan Economic Corridor (CEPC), under which Beijing has funnelled tens of billions of dollars into massive transport, energy and infrastructure projects in Pakistan.
But the undertaking has been hit by Islamabad struggling to keep up its financial obligations as well as attacks on Chinese targets by militants in Balochistan, Pakistan’s most impoverished province, and elsewhere in the country.

Police stand guard at the Mian Ghundi area in Quetta, Pakistan on July 27, 2024, ahead of Baloch Yakjehti Committee rally. (Photo Courtesy: BYC)

In the provincial capital of Quetta, authorities have blocked all entry and exit points and imposed Section 144 of the Code of Criminal Procedure, a provision that allows the administration to prohibit assembly of four or more people.
Saad bin Asad, the Quetta deputy commissioner, said they had blocked the Luk-Pass tunnel, a key point on the Quetta-Karachi highway, to prevent people from violating Section 144 ahead of Sunday’s gathering. “At least 140 people have been arrested from different sites of Quetta and we would share the details of the detained people,” he told Arab News.
The administration’s move came after the Balochistan government described the Baloch National Gathering in Gwadar as a “conspiracy” against the second phase of CPEC in Pakistan that has witnessed a “hiatus” following the killing of five Chinese engineers in a suicide attack in Pakistan’s northwestern Khyber Pakhtunkhwa province in March.
On Friday, Balochistan Chief Minister Sarfaraz Bugti questioned the protesters’ choice of Gwadar as the venue of the rally amid Pakistan’s security assurances to the Chinese.
“Why Gwadar and why not Quetta,” Bugti questioned, during a provincial assembly session. “They planned to hold this gathering in Gwadar where we have frequent international movements and we have invited Chinese officials for the inauguration of Gwadar International Airport next month.”
Bugti informed the lawmakers that there were intelligence reports about “serious threats” of attacks on the gathering in Gwadar by a Baloch separatist group, the Balochistan Liberation Army (BLA), to malign the government and the state institutions.

Baloch Yakjehti Committee representatives talk with police in Nushki, Pakistan on July 27, 2024, ahead of their departure to Gwadar to attend Baloch Raji Muchi gathering. (Photo Courtesy: BYC)

“Despite talks with BYC members to shift the venue for this gathering, but if they are adamant, the government will take action against people challenging the writ of the state,” he added.
Sammi Deen Baloch, one of the organizers of Sunday’s gathering, said Gwadar is part of Balochistan and the port city has international significance.
“We have had held many gatherings in Quetta, Turbat and other cities of Balochistan, so why not Gwadar, where local Baloch people are deprived of basic facilities,” she said.
Responding to the government reports of threats to the gathering, Sammi said the state had power and resources, hence the state should protect the people coming to attend a peaceful gathering.
“If the state doesn’t stop Baloch people from coming to Gwadar, we have high expectations that thousands of people would attend this Baloch National Gathering,” she told Arab News.

Topics: Baloch Yakjehti Committee Balochistan province

After court intervention, police lodge case in ‘kidnapping’ of prominent Karachi businessman

Updated 23 min 15 sec ago
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After court intervention, police lodge case in ‘kidnapping’ of prominent Karachi businessman

  • Zulfiqar Ahmed, owner of Paracha Textile Mills and Mezan Group, was abducted from Karachi’s Mauripur area
  • Official says high-powered police teams formed to investigate the matter, hoping that it will be resolved soon
Updated 23 min 15 sec ago
NAIMAT KHAN

KARACHI: Police have registered a case into the “kidnapping” of a prominent Pakistani businessman in Karachi on the intervention of a high court, his lawyer said on Saturday, three days after the incident.
Zulfiqar Ahmed, managing director of Paracha Textile Mills and Mezan Group, was kidnapped from Mauripur Road on July 23 after he left his office in Sher Shah area, according to the police report. A white Toyota Surf vehicle intercepted their car and eight armed men forced Ahmed and his friend, Qaiser, into it before dropping Ahmed’s friend off a short distance away.
Ahmed’s friend informed about the kidnapping his family and the company, which submitted an application in the Kalri police station on the same day. When the police refused to register a complaint, the family requested the Sindh High Court (SHC) to intervene in the matter. Mian Ali Ashfaq, the counsel representing Ahmed and his family, said police registered a case after the court orders.
“The news [of Ahmed’s abduction] somehow gained traction on social media,” Ashfaq told Arab News on Saturday. “After social media spotlight about court order and my protest, my team of office associates went to the police station, where, after four hours, the FIR [First Information Report] was finally registered and a copy was provided to us by Friday afternoon.”
Pakistanis widely shared news about Ahmed’s abduction across social media platforms, calling on authorities to take steps for the release of the businessman, who is also widely regarded for his charity work.
Asad Raza, deputy inspector-general (DIG) of Karachi’s South district where the incident occurred, dismissed the allegations of police inaction in the case and said they had been working on it since it was first reported to them.
“It is insubstantial whether the FIR is registered instantly or after one day’s delay as long as we were working on the case when the abduction took place,” he told Arab News.
Ashfaq, counsel of the Ahmed family, said the SHC had issued notices to respondents and fixed the matter for a hearing on Tuesday. “We hope that Zulfiqar Ahmed will be recovered and reunited with the family before the next hearing,” he added.
On Friday, Karachi Police Chief Javed Alam Odho said two high-powered teams were investigating the case.
“A high-powered team, under the supervision of the DIG of the CIA [Crime Investigation Agency of police] and another under the DIG of the area, are working on it,” Odho told Arab News. “I am confident this case will be resolved soon.”

Topics: Cola Next Zulfiqar Ahmed Karachi Police

Authorities warn of floods, landslides as monsoon currents likely to penetrate parts of Pakistan

Updated 27 July 2024
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Authorities warn of floods, landslides as monsoon currents likely to penetrate parts of Pakistan

  • This year, Pakistan recorded its ‘wettest April since 1961,’ with 59.3mm rainfall and 144 deaths in thunderstorms, house collapses
  • A top UN official last month warned that an estimated 200,000 people in Pakistan could be affected by the upcoming monsoon season
Updated 27 July 2024
KASHIF IMRAN

ISLAMABAD: Pakistan’s National Disaster Management Authority (NDMA) on Saturday warned of flash floods and landslides as monsoon currents were likely to penetrate upper parts of the country over the next five days.
The monsoon currents from Arabian Sea may cause heavy rains from July 27 till July 31. Under the influence of this system, rainfall could trigger landslides, mudslides and cause boulders to fall, potentially disrupting roads, according to the NDMA.
The areas that are likely to be affected include upper parts of the Khyber Pakhtunkhwa province, Galiyat, Murree, Gilgit-Baltistan and Azad Kashmir. The rainfall can trigger hill torrents in Sulaiman and Kirthar mountain ranges as well as in DG Khan and Rajanpur regions.
“Flash floods can strike suddenly, catching people off guard,” the NDMA said in a statement. “Population at risk is advised to avoid flood waters and find a safe location away from flood-prone areas.”
The authority said it had issued instructions to all relevant departments to take necessary precautions to mitigate the possible effects of flooding and extreme weather.
“Even a mere six inches of moving water can knock you off your feet, and just one foot of moving water can sweep away a vehicle,” the NDMA noted in its advisory for the masses.
“Bridges can be hazardous during floods. Avoid crossing them if water is flowing rapidly. Avoid staying in weak structures. In case of intense rain, seek shelter in safe places such as schools, government buildings, or any concrete buildings.”
Pakistan is recognized as one of the most vulnerable countries to climate change effects in the world. This year, the South Asian country recorded its “wettest April since 1961,” with 59.3 millimeters rainfall and at least 144 deaths in thunderstorms and house collapses, mostly in Khyber Pakhtunkhwa, according to the authorities.
Last month, a UN official warned that an estimated 200,000 people in Pakistan could be affected by the upcoming monsoon season, which is expected to bring heavier rains than usual.
The United Nations, with help from local authorities, has prepared a contingency plan, with $40 million set aside to respond to any emergencies, said Mohamed Yahya, the newly appointed Resident Coordinator and Humanitarian Coordinator in Pakistan.
Unusually heavy rains in June 2022 triggered flash floods in many parts of the country, killing over 1,700 people, inflicting losses of around $30 billion, and affecting at least 30 million people.

Topics: pakistan monsoon Pakistan Floods

Pakistani religious party vows to continue sit-in in Rawalpindi despite government’s offer for talks

Updated 12 min 21 sec ago
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Pakistani religious party vows to continue sit-in in Rawalpindi despite government’s offer for talks

  • Jamaat-e-Islami supporters have been holding a sit-in at a key intersection in Rawalpindi since Friday
  • The party wants the government to address cost-of-living crisis, remove additional taxes in the budget
Updated 12 min 21 sec ago
Aamir Saeed

ISLAMABAD: Jamat-e-Islami (JI), a Pakistani religio-political party, on Saturday vowed to continue its sit-in in Rawalpindi against the rising cost of living and additional taxes imposed in the latest budget, despite the government forming a negotiation committee for talks with the protesters.
The JI, led by Hafiz Naeem-ur-Rehman, announced the sit-in in Islamabad to call for a reduction in power tariff amid soaring inflation and to review Pakistan’s agreements with independent power producers (IPPs).
The party’s caravans entered the capital from different directions as the district administration closed the capital’s Red Zone, which houses top government offices and the diplomatic enclave, with shipping containers and roads leading to parliament.
“Our dharna will continue as long as the government accepts our demands for a significant reduction in inflation and electricity prices,” Aamir Baloch, a JI spokesperson, told Arab News.
“The party chief Hafiz Naeem-ur-Rehman will be announcing a fresh strategy for the protests, dharna and engagement with the government today afternoon.”
The government has formed a three-member committee, which includes Information Minister Attaullah Tarar and two senior members of the ruling Pakistan Muslim League-Nawaz (PML-N) party, to hold talks with the JI leadership.
“We are ready for negotiations, but don’t disrupt public life,” Tarar said at a news conference on Friday. “The government’s three-member committee will talk to you. Amir Muqam, Tariq Fazal Chaudhry and I will negotiate with you. Whenever you express willingness, we are ready for the negotiations.”
But Baloch said the party would continue its protest and JI chief Rehman would join the sit-in at Zero Point — a major intersection in the city where various key roads and highways connect with each other — on Saturday.
He said thousands of JI workers had already reached the area, despite the government’s “brutalities.”
“The police have arrested dozens of our peaceful workers from D-Chowk,” he said, referring to a key spot close to the parliament building in Islamabad.
“The government wants to incite the peaceful protesters through such strong-arm tactics. It will be responsible for any law-and-order situation, if our workers are not released immediately.”
Police in the capital have deployed additional contingents, including personnel with riot gears, to prevent any untoward incident.
The Rawalpindi-Islamabad Expressway has also been closed with shipping containers near the Zero Point bridge, where the JI protesters have gathered.
Baloch said the party leadership would announce their future course of action after reaching Zero Point.
“One thing is for sure,” he said. “We are here to stay and will definitely stage a sit-in to press the government to meet our legitimate demands regarding inflation and taxes.”

Topics: jamaat e islami

Protesters in northwest Pakistan end weeklong sit-in after CM assures no military operation being launched

Updated 27 July 2024
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Protesters in northwest Pakistan end weeklong sit-in after CM assures no military operation being launched

  • Pakistan’s government last month announced a new campaign to counter a fresh surge in militancy in areas along the border with Afghanistan
  • The announcement raised fears among locals as past operations displaced hundreds of thousands of people and destroyed livelihoods in region
Updated 27 July 2024
REHMAT MEHSUD

PESHAWAR: Thousands of protesters, who had been staging a sit-in in Pakistan’s Bannu district for a week, on Friday called off their protest after Chief Minister Ali Amin Gandapur assured them that no military operation was being launched in the northwestern Khyber Pakhtunkhwa (KP) province.
Pakistan’s government last month announced a new campaign to counter a fresh surge in militancy in areas along the border with Afghanistan. Major opposition parties opposed the operation and in Bannu — where eight soldiers were killed in a suicide bombing last week — thousands held rallies to call for peace and security.
One of the key demands of the protesters in Bannu was for the government to not launch any new military operation in the province. They demanded that a spike in militant attacks in the region be tackled by empowering and better equipping civilian agencies like the police and the counter-terrorism department (CTD).
On Friday, CM Gandapur traveled to Bannu where he spoke to the protesters and announced at a rally that all their demands had been accepted in letter and spirit, lauding local elders for helping avert violence when two protesters were killed after gunfire triggered a stampede at the rally on June 19.
“I have a signed copy [of the demands]. It has been done the way you [protesters] wanted,” he told the gathering. “I’m the owner of this soil and land, no one can oppress me or coerce me. As chief minister, I declare that there will be no operation in the province.”
The announcement came a day after the provincial apex committee, which comprises civilian leaders and military commanders in the province, met to discuss the situation in Bannu. The KP government later clarified that police and the CTD would be tasked to take action against militants amid a surge in violence in the area.
The resentment for military operation stems from past displacement of hundreds of thousands of people and destruction of countless homes and businesses in successive military campaigns in KP that began in 2014. But Pakistani military spokesman Lt Gen Ahmed Sharif Chaudhry dispelled the fears this week, saying the newly proposed Azm-e-Istehkam campaign was not meant to be a full-scale military operation.
“We have offered sacrifices for our homeland and stood loyal to the country and its people. We left our homes and became nomads for our land and for the sake of peace,” Gandapur said. “We will offer sacrifices again but we will make the decisions ourselves and will not allow anyone to impose their decisions.”
The chief minister appreciated police for taking swift action against illegal armed groups in Bannu.
Provincial Minister for Public Health Engineering Pakhtunyar Khan, who hails from Bannu, said the people of the region had experienced “unspeakable hardships” for the sake of peace.
“We want peace for the entire province and we will not back down from this demand,” Khan said at the rally.
On Thursday, the apex committee said the judiciary would be requested to hold an inquiry into the Bannu shooting incident, a demand that had been put forward by protesters and Pakistan’s opposition alliance.
“Meanwhile, the government will hold its own inquiry and identify the persons responsible,” it said in a statement.

Topics: bannu protest

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