Entrepreneurs woo investors with $1b as 021Disrupt kicks off

November 10, 2018

Institutional investors with a cumulative one billion dollars fund size have flown to Karachi to attend 021Disrupt 2018 Conference, Pakistan’s largest startup event that connects local entrepreneurs seeking funds, mentorship and networking opportunities with global investors and mentors.

Dubbed as the pulse of innovation, 021Disrupt is bigger as 750 people and companies from the tech industry registered this time, up from last year’s tally of 650. Many investors attended the event for the first time as more countries were included in the guests’ list this year.

Almost 300 startups from across Pakistan are attending the two-day conference with half of them securing office hours slots with investors and mentors from Germany, USA, UK, Japan, Malaysia, Singapore, Korea, Hong Kong, and UAE.

Related: Ease of Doing Business: Pakistan jumps 11 spots in World Bank’s latest report

“The investors’ roundtable is much bigger this year as 50 investors have registered for it,” said Jehan Ara, the organiser and head of Nest I/O, a technology incubator run by Pakistan Software Houses Association (P@SHA) for IT and IT-enabled services.

These investors will meet startups one-on-one and give them exclusive 15 minutes each on the sidelines of the conference, said Jehan Ara, who is also the President of P@SHA. This year participation from local investors and mentors was particularly notable, she said. Besides Karachi, people from Islamabad, Lahore, Peshawar, and Sukkur have also flown in to attend the conference.

Access to capital is one of the biggest challenges facing Pakistan as local investors prefer conventional avenues for investment, such as real estate and the stock market. Access to mentors and networking with venture capitalist firms is another challenge. It is not surprising that Pakistan has yet to produce its first unicorn, a billion dollar startup while Indonesia, a country of similar size, has four.

“It is surprising that Pakistan doesn’t have a billion dollar company despite being a big market,” said Paul Papadimitriou, founder of Intelligencr, a global innovation scouting firm based out of London.

Related: Faisalabad-based maker of Nike socks plans Pakistan’s biggest private sector listing

Paul, who provides consultancy services in emerging technologies, told Samaa Digital the startup ecosystem in Pakistan is very young and not matured yet. It won’t mature in a day. However, he added some VCs are taking interest in the country and new money is flowing in. This will change things because it takes a big investment to create mass scale services, he said. Pakistanis living abroad are now returning with experience and ideas, he said, adding that it is a process that takes time.

“Having a unicorn is only a matter of time now,” Paul said and added events like 021Disrupt are a step in that direction.

Experts believe the event is much more than just investments. It provides network opportunities with global investors and a learning platform where some of the world’s most successful startup founders and VC firms come and share their experiences and ideas with Pakistani aspiring entrepreneurs.

Three startups were able to secure funds as a direct result of their participation in the inaugural edition. These include ModulusTech, which creates flat pack housing; Dreamnode, which makes gaming apps; and SmartChoice, a financial services provider.

These companies met investors during the event and their conversation continued for a few months before the closed investment.

“It takes a few months before you secure funding,” said Jehan Ara. She, however, insisted if conversation begins at this platform, there are chances that the funding will come at some stage later. “Startups should come and pitch ideas to these investors. Even if they don’t get any deal, they will form a relationship with them, which will help them enter different markets,” she said.

The P@SHA president said Pakistan’s landscape has changed as many professionals have also entered this arena. “Some tech-focused funds have opened in Pakistan,” she said, particularly mentioning Sarmayacar, 47 Ventures and I2I.

Related: Pakistan among top three countries with high upward mobility 

Sarmayacar has just closed $30 million fund, while 47 Ventures has $10 million in its kitty. Similarly, I2I ventures just closed $1 million and they plan to take it to $10 million, she said.

Other venture capitals that participated in the event include Lumia Capital, Middle East Venture Partners, Alter Global, Fatima Ventures, Valhalla Capital, Wamda Capital, GOBI VC, and Lakson Investments Venture Capital.

In this year’s conference, GOBI Partners has announced investment in ‘Sasta Ticket’, a Pakistani startup. Lamsa, a children’s edutainment app company with over 12 million downloads, also announced that it will be launching an Urdu version of the app for the Pakistani audience.

One foreign investor has already partnered with a local startup and they are going to announce a partnership during the event, Jehan Ara said without name any party. She, however, emphasised that many startups in Pakistan are already generating revenue and may not even need investment if they could get some advice that will help them scale their business or take a new direction.

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