The real impetus for any economy is stipulated by its mid tier and small scale enterprises which fuels its economic activities among the masses. It is imperative that these entrepreneurs are given complete support and a level playing field for them to prosper. Accelerators are such entities which provide absolute support to these start ups by giving office space, mentorship, counseling, opportunities for networking and most importantly funds. In turn, they take a small pie of the equity from the newly emerged entity.
Their means of operation may vary depending on the industry type and its norms but primarily their job is to arrange things which can make the entity run at least for a short period of time. In short it creates a skeleton for the start up.
Recently, Pakistani accelerators have brought laurels for the nation by securing 3 positions among the top 20 list of most active accelerators and incubators in the Asian and Oceania region. This list has been finalized and issued by Gust and Fundacity in their Annual Asian and Oceanian Accelerator Report 2015.
Three accelerators from Pakistan have been the lucky ones who accelerated most start ups in the preceding year. LUMS center for Entrepreneurship, PlanX and Invest2Innovate made it to the list.
This report has highlighted some important insights into understanding how this industry works, what are its dynamics and which factors have contributed for its massive growth in the recent past. This is basically a followup study primarily conducted to infer how the accelerator industry is funded and their means of making money for themselves. In order to finalize a list of 20 companies, 125 organizations were studied with a fine tooth comb to determine which ones should qualify to be actual accelerators.
This region attracted a total investment of USD 16.8 million with Australia, India, South Korea and China securing investments in this very order. India however, made a mark by accelerating 568 start ups single handedly. But again countries need to strike a balance between quantity versus quality of start ups being launched in their economies. Same goes for top 3 Pakistani accelerators which have given a boost to 54 enterprises in the same period.
Looking at the industry wise breakup of entrepreneurs it is clearly visible that only a handful of industries have attracted most of the capital with Fintech, internet of things, Health and Education being the most wanted areas by majority of these accelerators in the Asian region.
If we analyze the quantum of investment raised by 54 Pakistani start ups it is equal to the amount raised by only 13 start ups in China. Hence the pressing need is to bring investments in other lucrative sectors in order to attract foreign investors.
Finally the report also highlighted the revenue generating mechanism of most of these accelerators. In Asia and Oceania region, majority of these accelerators receive public and private funding but generate revenue by investing a small chunk in incoming start ups and in turn take up a small share in their equity.
The concept of accelerators though still in its infancy stage in Pakistan but despite its initial stage its offering excellent opportunities for young entrepreneurs to go out there and make a mark with their innovative ideas. Lets see how many of us push our luck and grab a chunk from this endless pool of possibilities!