I live in the San Francisco Bay Area, a.k.a Silicon Valley. Last month, the Embassy of Pakistan, Washington D.C., hosted Invest in Pakistan Summit in the Bay Area.
Due to work, I had to pick when to attend this 1-day summit. My interest is in following the money, and I leaned towards attending an afternoon session that discussed Venture Capital in Pakistan.
Ali Mukhtar, CEO of Fatima Ventures, and Aatif Awan, the Founder and Managing Partner at Indus Valley Capital, conducted the session.
In collaboration with China-based Gobi Ventures, Fatima Ventures has created Fatima Gobi Ventures — a $20 million fund that invests in Pakistani startups. Indus Valley Capital is a Silicon Valley-based venture fund.
- There’s about $100 million in capital available for startups in Pakistan.
- Apart from being acquired, there are no other exit opportunities.
- There’s a rush to fund startups in e-commerce and transportation space due to acquisitions of local players such as Daraz (Germany) and Careem (UAE).
- All venture capital funds, except (Lakson), are registered outside of Pakistan due to regulatory hurdles.
- VCs are interested in funding startups with strong teams, work experience, and a large total addressable market (TAM).
The talk was informative as it offered a primer on the startup funding landscape in Pakistan and the opportunities that exist. However, a deep dive and a more robust case for investing in Pakistani startups would have benefited many in the audience.
As an asset class, VC funds have a longer life span. Given that the payout is sometimes not in sight, it is vital to highlight success stories that indicate upside potential if the investor is willing to be patient. However, the nascency of the startup ecosystem creates a chicken or an egg problem.
Lack of significant success stories, besides the validation of the market in the case of Careem acquisition, is a hump that potential investors will not get over. On top of that, just a handful of startups merit attention.
It’s fair to say that capital is abundant, but a shortage of startups.
Coverage of the event: Forbes