If you ever wanted to read one report that would educate you about the latest essentials of the start-up culture end ecosystem in Pakistan, Invest2Innovate’s (i2i) recently launched “Pakistan Startup Ecosystem Report 2014” is what you are looking for. The report lists all the major players around the country working in this space, as well as identifying the major gaps and challenges that this industry is facing. The intentions, in the words of i2i’s CEO and Founder, Kalsoom Lakhani, are:
“We hope this study can be used as a resource for players looking to understand the nuances of Pakistan’s growing entrepreneurship ecosystem.”
The report was commissioned by CGAP at the World Bank. Invest2Innovate (i2i) looked at Pakistan’s entrepreneurial landscape through the lenses of the Aspen Network of Development Entrepreneurs (ANDE) Entrepreneurial Diagnostic Toolkit. The methodology used includes a survey, interviews and past reports with a similar angle on Pakistan.
The ecosystem is mapped out in relation to life cycle of a business/start-up from the “Idea Stage” to the “Early Stage” to the “Growth Stage”. An interactive illustration of the life cycle is available here.
Idea Stage
At the “Idea Stage”, idea forums and competitions as well as university incubators provide the necessary environment that encourages idea generation as well as converting abstract business ideas into proper business plans and strategies. The report lists the biggest events such as Startup Weekend, Code For Pakistan and Startup Grind, as well as the biggest university incubators in each of the main centers of entrepreneurship in the country: Karachi, Lahore and Islamabad.
Early Stage
At the “Early Stage”, incubators/co-working spaces, angels, venture capitalists, foundations and governments are listed as the four sets of institutions contributing to the ecosystem. The short lists and some indirect links are representative of a young ecosystem with the major players being start-ups in their own way. The government’s significant and commendable efforts in this space are highlighted by identifying Punjab Information Technology Board (PITB) as an institution behind the largest incubator in the country (Plan 9) as well as a supporter of the start-up culture in Lahore.
Growth Stage
In the “Growth Stage”, private equity firms as well as bigger competitions with prospects of receiving growth capital in the end are seen as the major players. Here the links are more indirect, especially with the PE firms. This is an area that definitely needs to be beefed up in the future as the start-ups of today become booming businesses of tomorrow.
Support v. Finance
The report has a great approach towards understanding the ecosystem in terms of players that provide financial support and others who contribute to the development of this system in a non-financial manner. In addition to attempting to be a comprehensive list of the main players in this space, i2i has also tried to summarize their major observations and suggestion. They highlight the lack of foundations, venture capital and private equity firms focusing on developing the startup industry in the country.
This report will give a good visibility to the included institutions and firms in terms of identifying the relevant people and events to anyone who’s interested in finding out more, start their business or invest in the sector.
Policy focus
Interestingly, while identifying the role of the government in encouraging the start-up environment in the country, the report is quite heavy on its focus on policy as a major challenge to the future of this ecosystem. This represents the general sentiments of the experts interviewed for this report, and also the eternal complaint of the entire business community.
The report successfully points out the provisions of this regulatory environment that are directly relevant to the entrepreneurship space. Issues with the business environment exogenous to the regulatory challenges were also identified such as the lack of good data or the low levels of governance and transparency in private businesses in the country.
Taking Stock
This report fills the function of taking stock of this new yet growing industry in Pakistan. Spread all around the country, all sorts of supporting players are growing with the industry and learning to contribute in a more positive manner. The hope is that the reports of the future will also feature start-up stories that stand out and provide great examples and encouragement to everyone involved.
About Invest2Innovate
Invest2Innovate supports impact-oriented enterprises in developing markets. We have been working in Pakistan since 2011, and plan to scale to other countries in 2015. i2i finds, vets and selects young entrepreneurs for the i2i Accelerator, a four month program that provides business support, mentorship and access to i2i Angels, our angel investor community. By supporting entrepreneurs, engaging mentors & investors, and partnering with local stakeholders, we are working to build a strong entrepreneurial ecosystem in Pakistan to foster economic growth and positive social change in the country.
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