Ignite: Pakistan Federal Government Fund to Promote Tech R&D
Guest Post by Yusuf Husain
CEO, Ignite
The mandate of Ignite, formerly National ICT R&D Fund, a Government owned non profit company, affiliated with the Ministry of IT, Government of Pakistan, is to fund innovative projects that solve local problems or target global opportunities. Since early 2017 we are focusing on startups based on 4th Industrial Wave technology – like AI, IoT, Robotics and AR – whose technology risk is beyond the appetite of private sector investors, with the expectation that investors and corporates will participate in subsequent rounds or else purchase or license the technology. With about ten deals a quarter, with average size of one hundred and fifty thousand dollars, we also fund academia and industry projects with strong, well-articulated commercial potential and intent. This year projects include a smart stent, which detects slippage, clotting and re-stenosis, an IoT based water management system that detects moisture in the air and fluid in the ground, an AR remedial system that improves motor, cognitive and functional skills in neurologically challenged children, and AI based bovine disease diagnostic that improves dairy production and life of cows.
Startups are the building blocks of the knowledge economy, and Ignite is funding world-class incubators across the country. National Incubators in Islamabad, Lahore and Peshawer are operational, with Karachi and Quetta expected to launch in early 2018. Together, these incubators will cover a hundred thousand feet, including Makerspaces and design labs, and incubate a couple of hundred startups every year. Human resource development is the key driver of economic and job growth. Ignite will be launching an ambitious plan to train one million people in marketable digital skills, also in early 2018. Designed like a startup, and driven by data based AI decision-making, the program is expected to iterate to match supply with demand and achieve high completion rates on training courses. Included is a learn-by-doing soft skills component that will develop aptitude in communication, meeting commitments, initiative, and perseverance.
Many countries in the world from USA and UK to Israel and India support innovation and entrepreneurship through the award of Government projects, funding, incubators, and incentives. Agile regulation and targeted incentives are essential to unleashing the power of innovation and entrepreneurship. Through studies and engagement with experts in industry and academia, Ignite seeks to develop the thought leadership required to support the Government in designing such regulation and incentive packages. A three-year tax break and credit for Startups was introduced last year. More incentives for startups, incubators, VC, Angels and Corporate Innovation are on the anvil.
Waves of innovation have changed the course of history, elevating innovative societies and marginalizing laggards. Through its outreach program, Ignite seeks to inform key stakeholders and change agents in media, government, academia, corporates, the entrepreneurial ecosystem and the professional community about Ignite initiatives, and the opportunities, threats and tradeoffs offered by the 4th Industrial Wave innovation.
Related Links:
Haq's Musings
Tech Investing Opportunities in Pakistan
Pakistani Tech Unicorns
Promoting Culture of Innovation in Pakistan
IT Jobs Moving From India to Pakistan
E-Commerce in Pakistan: The Party Has Started
Pakistan Mobile Broadband Speed Fastest in South Asia
Data Usage Soaring in Pakistan
Fiber Connectivity in Pakistan
Mobile Apps in Pakistan Public Sector
Armed Drones Outrage and Inspire Pakistanis
CEO, Ignite
The mandate of Ignite, formerly National ICT R&D Fund, a Government owned non profit company, affiliated with the Ministry of IT, Government of Pakistan, is to fund innovative projects that solve local problems or target global opportunities. Since early 2017 we are focusing on startups based on 4th Industrial Wave technology – like AI, IoT, Robotics and AR – whose technology risk is beyond the appetite of private sector investors, with the expectation that investors and corporates will participate in subsequent rounds or else purchase or license the technology. With about ten deals a quarter, with average size of one hundred and fifty thousand dollars, we also fund academia and industry projects with strong, well-articulated commercial potential and intent. This year projects include a smart stent, which detects slippage, clotting and re-stenosis, an IoT based water management system that detects moisture in the air and fluid in the ground, an AR remedial system that improves motor, cognitive and functional skills in neurologically challenged children, and AI based bovine disease diagnostic that improves dairy production and life of cows.
Many countries in the world from USA and UK to Israel and India support innovation and entrepreneurship through the award of Government projects, funding, incubators, and incentives. Agile regulation and targeted incentives are essential to unleashing the power of innovation and entrepreneurship. Through studies and engagement with experts in industry and academia, Ignite seeks to develop the thought leadership required to support the Government in designing such regulation and incentive packages. A three-year tax break and credit for Startups was introduced last year. More incentives for startups, incubators, VC, Angels and Corporate Innovation are on the anvil.
Waves of innovation have changed the course of history, elevating innovative societies and marginalizing laggards. Through its outreach program, Ignite seeks to inform key stakeholders and change agents in media, government, academia, corporates, the entrepreneurial ecosystem and the professional community about Ignite initiatives, and the opportunities, threats and tradeoffs offered by the 4th Industrial Wave innovation.
Related Links:
Haq's Musings
Tech Investing Opportunities in Pakistan
Pakistani Tech Unicorns
Promoting Culture of Innovation in Pakistan
IT Jobs Moving From India to Pakistan
E-Commerce in Pakistan: The Party Has Started
Pakistan Mobile Broadband Speed Fastest in South Asia
Data Usage Soaring in Pakistan
Fiber Connectivity in Pakistan
Mobile Apps in Pakistan Public Sector
Armed Drones Outrage and Inspire Pakistanis
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https://www.techjuice.pk/national-incubation-center-karachi-inaugurated-at-ned-university-by-pm/
Prime Minister of Pakistan, Shahid Khaqan Abbasi has inaugurated the National Incubation Center (NIC) Karachi at the launch ceremony held at NED University of Engineering & Technology on 11th May.
The event kicked off with a panel discussion moderated by Murtaza Zaidi, Director NIC Peshawar. The panelists included Jehan Ara – President at P@SHA, Faisal Sherjan – Program Director at NIC Lahore, Neelam Azman – Innovation Intervention Specialist at Pakistan Poverty Alleviation Fund (PPAF), and Adnan Shahid, Chief Commercial Officer at PTCL. The panel discussion explored the potential of NICs to ignite and strengthen the local entrepreneurial ecosystem of the country.
Jehan Ara believes that successful exit stories will help attract investors to inject more finance in the local entrepreneurial ecosystem. While sharing success stories of their respective incubators, Jehan and Sherjan identified that Pakistani millennials are passionate to solve social problems with entrepreneurship. Be it education, healthcare or social inclusion, young entrepreneurs of the country relate to grassroots problems and are driven to solve them.
With incubators being the guiding force, these startups are smart enough to figure out the right way. Sherjan highlighted that it is essential to expose “Generation Z” to the driving factors behind fourth industrial revolution such as machine learning and AI. Summer programs launched by NIC Lahore and The Nest I/O are putting rigorous efforts to provide that tech entrepreneurial exposure to teenagers.
Nabeel Qadeer
Pakistan’s entrepreneurial ecosystem has made immense strides, but this is only the beginning, writes Nabeel Qadeer.
https://aurora.dawn.com/news/1143296/pakistani-start-ups-the-next-innovation-district
The evolution of the entrepreneurial ecosystem in Pakistan has been impressive to say the least. It has grown from a state of non-existence 15 years ago to a multi-stakeholder industry that is fast being validated globally.
The ecosystem – a snapshot
A 2017 report by Planet N and supported by Karandaaz Pakistan and the Lahore University of Management Sciences examined the challenges of the start-up ecosystem. It estimated that the number of start-ups launched after 2010 increased to 723, with 68 raising funding, of which six secured an investment greater than $500,000. An accumulated $20 million was raised by start-ups and $49 million by mid-stage companies. This growth has been supported both by infrastructural and policy measures. Over the past six years, start-up facilitation centres, including business incubators, accelerators and co-working spaces, have emerged across Pakistan, some backed by the Federal Government’s National R&D Fund. International business competitions are held all year round, thereby providing young entrepreneurs with the opportunity to have their business idea validated at an early stage. The year-round activity of the industry culminates into two large-scale international platforms, 021Disrupt and Momentum. Not only do they bring the entire ecosystem together, the sector is pitched in a holistic manner on a global level.
Policy and the ecosystem
On the policy front, measures have been taken by the Government to promote high-growth firms, thereby strengthening the ecosystem. As a result of the orientation towards one-window operations for legal paperwork, Pakistan now stands at 136 on the World Bank’s Ease of Doing Business Index, a jump of 11 places from last year. This compares to India’s 77th position and Bangladesh’s 176. To tackle the issue of seed capital, an entrepreneurial loan scheme for young people was launched by the Federal Government in 2014. This provided subsidised financing on an eight percent annual service charge basis. In the FY18-19, it is expected to benefit 2,800 applicants with Rs 3.7 billion. (A similar policy, Arabuma, was launched in Sri Lanka under the ‘Enterprise Sri Lanka’ programme in which a tax exemption was introduced for start-ups in 2017, acting as a financial incentive to scale; in Pakistan, start-ups are still struggling for such exemptions). The National IT Policy was launched in Pakistan in 2016 and if implemented in its true spirit, it will further level the playing field for start-ups. The digital policy presented by the incoming government makes mention of creating Knowledge Economy Authorities across Pakistan, ensuring standardisation of enterprise systems to improve governance, with an emphasis on ensuring the integrity and security of national databases.
As a result of the orientation towards one-window operations for legal paperwork, Pakistan now stands at 136 on the World Bank’s Ease of Doing Business Index, a jump of 11 places from last year. This compares to India’s 77th position and Bangladesh’s 176.
Although the Government aspires to create special economic zones (SEZs) to increase the ease of doing business, the focus should rather be on building IT parks and innovation cities like those created in China and Malaysia for example. This will create massive opportunities for start-ups to grow into SMEs (traditional SMEs in Pakistan create over 80% of the jobs in Pakistan).
So are we there yet? Nurturing infrastructure and supporting policies are in place for entrepreneurship to thrive and the private sector is contributing to the ecosystem as well. The numbers are showing an encouraging trend. However, there is still a lot that needs to be done.
https://nation.com.pk/01-Aug-2019/ifc-to-invest-2-5m-to-support-tech-startups-in-pakistan
The International Finance Corporation (IFC), a member of the World Bank Group, will invest $2.5 million in Sarmayacar, one of the first early-stage venture capital funds supporting tech-driven startups in Pakistan, to help boost entrepreneurship and spur economic growth. Of the total amount, $2 million is equity commitments from Startup Catalyst, IFC’s global programme that backs accelerators and seed funds in emerging markets, said IFC press statement, adding that through this initiative, the corporation supports startups that provide innovative solutions to development problems and create quality jobs. The remaining $500,000 is from the Women Entrepreneurship Finance Initiative (We-Fi), a partnership among governments, multilateral development banks and other public and private sector stakeholders, hosted by the World Bank Group. We-Fi supports women entrepreneurs in developing countries by building their capacity, scaling up access to financial products and services, and providing links with domestic and global markets. “Pakistan offers a unique opportunity with its improving stability, large, young population, rising middle class, fast-growing internet and smartphone penetration, and a dearth of venture capital in the ecosystem,” said Rabeel Warraich, Founder of Sarmayacar. Rabeel said that the IFC’s goal at Sarmayacar was to provide value-add early-stage funding to entrepreneurs who are building scalable, market-transforming consumer and enterprise technology businesses in Pakistan. “This marks the first such investment from the World Bank Group in Pakistan and will enable us to back more startups in the country, while also providing access to a global network, new markets and domain expertise to our portfolio companies,” said Rabeel Warraich added.
The last three years have seen a significant rise in venture financing and investments. The most recent are Airlift, TelloTalk and SastaTicket.pk (which raised $1.5 million in Series A funding by Gobi Partners). Airlift, a decentralised mass transit system, has raised $12 million Series A funding, the largest by any start-up from Pakistan and one of the largest in the South Asian region this year. The funding round was led by Round Capital, a US-based VC that has previously invested in start-ups including Uber and Square. Earlier this year, Airlift secured seed financing amount of $2.2 million from Indus Valley Capital and Fatima Gobi Ventures and TelloTalk, a local instant messaging application, raised $1.6 million from i2i Ventures.
This brings us to the other side of the table – investors. i2i is a Pakistan-based early-stage investment fund with Kalsoom Lakhani and Misbah Naqvi as partners. Other examples are Sarmayacar and Fatima Gobi Ventures. Zamindar Capital has also made investments via Idea Croron Ka, a business reality TV show that over a series of four seasons has connected 100+ start-ups with 25 potential investors, resulting in Rs 510 million committed investments. Oman Technology Fund has invested in six start-ups – including $100,000 each in Smartchoice, a financial comparison platform, and Queno, an edtech offering ERP solutions for schools – in a short span of 18 months. Most recently, SparkLabs Global Ventures, the world’s third-biggest early-stage investment firm, has announced the launch of SparkLabs Pakistan in this year.
Sarmayacar, for example, has been set up with an initial $30 million and will invest $100,000 to two million into companies in technology and technology-enabled sectors. So far it has made investments in Bykea, with a funding amount of $5.7 million that was co-led by investors from South Asia. (Bykea, Zameen.com and PakWheels are set to be unicorns from Pakistan.) Bykea is scalable, local yet replicable and has a forward-looking team of co-founders. Add Jonas Eichhorst’s experience on the board, and you will not find an element stopping them from growing as a million dollar unicorn.
Muneeb Maayr, founder and CEO of Bykea, was previously a co-founder at Rocket Internet’s Daraz, the largest e-commerce setup in Pakistan and the largest in South Asia after the Indian market. The acquisition of Daraz by Ali Baba presents multiple facets; firstly, the entrance of an e-commerce giant in the local market is promising and a positive sign for other large companies and start-ups to enter and secondly, setting the scene for other, early stage start-ups by showing a possible trajectory.
There is another perspective too. Atoms, a New York based footwear brand, traces itself to Markhor and HomeTown of 2011-2012. Atom’s journey was not easy – it required passion, dedication and self-belief. Sidra Qasim and Waqas Ali, the co-founders, have all three. Persistence has been key and multiple pivots later, they landed a position at Y-Combinator, one of the top business accelerators in the world. Atoms have successfully raised $8.1 million in Series A rounds led by Initialized Capital, along with other investors including Acumen CEO Jacqueline Novograts, LinkedIn CEO Jeff Weiner and TED curator Chris Anderson. A completely home-grown startup has set an overarching way for others to acquire global exposure and rebase internationally.