Pakistani financial technology (FinTech) Startup, Finja has raises $1 Million in seed funding from well known Swedish investment firm Vostok Emerging Finance. Finja will continue its operations as private beta. They are preparing for the launch of a customer-facing mobile wallet in collaboration with Finca Microfinance Bank.

Qasif Shahid co-founder and CEO of Finja said, the cost for cash transactions is very high and its wastes lot of money and time resources. He also said to other news sources, “We intend to create a product which will play a lead role in changing payment behavior and how people handle and manage money digitally”.

Digital Mobile Wallet – Finja

One of Finja’s executive thinks, Pakistan is already moving forward in digital world, 3G/4G enables smartphone subscribers and Finja will provide digital financial services to the country’s 200 million under-banked population. Commercial launch of Finja’s wallet will be announced soon this year.

Another co-founder of Finja, Monis Rehman was also excited to comment on this news, he said; this is game changer news for Fintech industry and Pakistan will enter into new digital payments era. This is initial seed funding, they will keep moving, it is just a beginning of the journey.

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Just a couple years back, development of entrepreneurs in Pakistan was difficult. To access mentors, business trainers and investors was not so easy for startups.

Now, however, the whole scenario has changed and startup founders have a choice to get incubation. There many Incubators and accelerators in the country making an impact on Tech industry of Pakistan.

Plan9

Punjab government Initiative, based in Lahore, Pakistan initially started in August 2012. Plan9 offer 3 month program to all startups in which it provides free office space, consultancy and mentoring. Another good thing, they don’t take any equity. Plan 9 has incubated more than 102 startups till now, and the numbers are increasing.

The Nest i/o

Based in Karachi, Associated with Pakistan Software House Association (PASHA), The Next i/o is a technology incubator launched in early 2015. The Incubator provides free office space and mentorship, while they are not taking any equity.

LUMS Center for Entrepreneurship

The LUMS Center for Entrepreneurship (LCE) is a tech incubator associated with the LUMS (Lahore University of Management Sciences), Pakistan’s topnotch university based in Lahore. The Incubator has four month program where it provides, free office space, counseling, mentoring and many other benefits.

It does take a small equity percentage for each startup accepted into the program.

i2i (invest2innovate)

Started in 2011, Based in capital city Islamabad, i2i (invest2innovate) is an accelerator for early and mid-stage startups looking to make a social impact. The program is spread over four months but it does not require startups to be present in-house. It has option of working remotely. Invest2Innovate features a total six in-person sessions spread across many cities in Pakistan. They take equity in the range of 1.5 to 3 percent from each startup accepted into the program.

PlanX

PlanX is the largest tech incubator in the country, also sister incubator of Plan9 (Initiative of PITB (Punjab Information Technology Board) Pakistan. Located in Lahore, program is six month longer but provides continuing support, free space and consultancy to mid-stage startups without taking equity.

Microsoft Innovation Center

The Microsoft Innovation Center primary concern to utilize technical skills by using Microsoft tools, It has programs in both Lahore and Karachi. Microsoft Innovation Center offers accepted startups a wide range of free Microsoft enterprise software products. And also provides coaches and mentoring to each startup.

Technology Incubation Center

The Technology Incubation Center is an initiative of the National University of Science and Technology (NUST), located in Islamabad. As its associated with technology university, most of the startups housed in the incubator have a focus on hardware, engineering, and big data.

It also offers startups free office space and mentorship, taking a small equity percentage in return.

DotZero Ventures

DotZero ventures started in August 2013. They are budding entrepreneurs and startups. It provides 24×6 space, mentoring and networking. It has raises funding for tech startups.

Its founding members recently launched an angel investment fund to encourage the growth of the investment landscape in Pakistan.

Basecamp

Basecamp operates an invite-only co-working facility based in Peshawar. There are a number of events, including Startup Weekend Peshawar and TEDx Peshawar, and it hopes to promote entrepreneurship through community-led efforts. KPK is lucky by having such kind of incubators.

Founder Institute

The Silicon Valley-based entrepreneur training and startup launch program, operating a local chapter in Karachi and Islamabad.

Founder Institute program structured over three and a half months, with startups meeting once a week. Each startup must contribute 3.5 percent equity to an “options pool” and pay a one-time fee of US$250 to be accepted.

Nspire

Founded in May 2015, A private tech incubator started by NetSol , A leading  software company in Pakistan. Recently many startups incubated in Nspire and going to be launch soon this year.

Tech Incubator

Located in Lahore, they claimed to be first privately-managed incubator in Pakistan. It functions on a rolling basis, accepting startups all year round.

The tech incubator takes a big amount of equity, though. Startups have to part with 10 percent just to use its co-working space and a lot more if they wish to get mentoring, consulting, and potential investment.

WeCreate Pakistan

WeCreate Pakistan is an entrepreneurial community center exclusively for women looking to start or expand an existing business. The program based over 15 weeks and is backed by the US Department of State.

Telenor Velocity

Velocity is Telenor Pakistan’s initiative. The digital incubator selects startups from their network partners, who are usually other incubators, and help the selected startups get access to market, distribution, payment gateways etc.

Jazz’s ‘National Incubation Center

Mobilink and TeamUp to Setup National Incubation Center in Islamabad,  under the National ICT R&D Fund and will be aligned with the government’s vision of a Digital Pakistan. The service provider Teamup will run this incubation under the direct guidance of Zouhair Khaliq and Parvez Abbasi leveraging mobilink’s connection and resources.  Mobilink has collaborated with LUMS Center for Entrepreneurship (LCE) to provide support and mentorship.

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Despite the lack of the necessary financing from banks and venture capital outfits, tech startups today are flourishing, and are on the fast-track for growth around the globe.

Nearly two dozen new and old Pakistani tech startups were able to gather funding from local venture capitals, or from overseas in 2015.

However, many industry sources claim that tech startups face difficulties in obtaining bank credit, so much so, that many don’t bother reaching out to banks. Consequently, and since venture capitals companies are low in numbers, tech startups end up reaching out to foreign entities for funding, or approach local venture capital sources.

Banks choose governments debt papers, which can lower their advance deposit ration beneath 47pc. They are unfortunately unwilling to boost even their normal private sector lending, let alone consider financing tech startups, something that is all about innovation.

However, bankers will deny that they intentionally ignore financing tech startups. One senior executive even suggested that banks are indeed involved in venture financing by developing special purpose vehicles, which is vastly different from normal, private sector lending their typically participate. His argument was that tech startups are too hasty and fail to stand up to their procedures, and that some startups require a lot more than simply money, such as more research, or development ideas.

There are a few bankers that do acknowledge the need to look at what banks do to take advantage of the potential held in the flourishing tech startup market. One senior executive of a bank asserted that it would be unwise for banks to ignore tech startups for much longer.

The tech startups able to success duly fund their projects, both new and old, include those like shopping website Daraz.pk, Careem, an app based traveling service, Rozee.com, a job portal, and the entrepreneurship program Interact, along with nineteen other startups. These funds were raised in 2015.

A brief look at where they got their finances reveals it emanated from abroad. Careem received $60 million from the UAW based Abraaj group. A few received $33 million in partial funding from regional venture capitals, like Darak.pk who received money from the Asia Pacific Internet Group

However, there have been some cases where the details of the investors are largely unknown, such as the instance of Zameen.com, which raised $9 million in foreign funds from mysterious origins.

AutoGenie with the aid of PakWheels, a local online car website, gathered $3.5 million from a Malaysian venture capital firm. Furthermore, Interacta a startup from the Lahore University of Management Science got $200,000 in seed funding via the Lahore-based Fatima ventures.

In 2013, a large group of tech startup’s fundraising came to people’s attention when four entities mobilized funds less than $10 million. Then, in 2014, ten tech startups raised nearly the same amount on their own. Finally, in 2014 twenty-four startups gathered roughly $100 million from a variety of sources, and not just in seed capital, but for outreach and capacity construction as well.

That said, borrower often refuse to divulge information concerning the amount and sources of their debt. Individual sources and websites, on the contrary, eventually receive the necessary information and keep records for the sake of their visitors.

The Securities and Exchange Commission of Pakistan (SECP) regulates venture capital firms and watches the activities of tech startups albeit not directly. Insider sources in the SECP claim the corporate “watchdog” will soon encourage input from each stakeholder to secure transparency and growth in that sector.

No one possesses, or can possess, a good idea as to how many small and large tech startups are currently raising the funds they need, but several industry sources see the rate of find mobilization being at last year’s level.

A shopping platform called Markhor that puts up hand-crafted leather shows for sale has won recognition with Y Combinatory, an incubation program in Silicon Valley. It has received $120,000 in seed capital.

Plan9, a regional venture capital of the Punjab Technology Board purports to have provided incubation training to more than one-hundred startups. However, only some of those startups have gathered funds from foreign sources, according to industry outsiders.

In some instances, tech startups are near identical to impact financing; consequently, banks and some local, venture capitals stay away from them.

But tech startups have proven their profitability, showing yearly growth rates of 100 to 400 pc, according to industry sources. The main factor in this growth is the time-efficient services these startups provide, the prevalence of smartphone use, and the internet.

Tech startups have a high chance of impacting large businesses currently being run. Look at EveryCatalog.com for instance. At two years old, this startup showcases a wide range of products like apparel, jewelry, textiles, accessories, handcrafted products, furnishing, and interior designs. EveryCatalog’s mobile apps are supposedly even capable of using an e-commerce portal where sellers can put their products on display for sale.

Recently two more Pakistani startups got funding, Sabzi.pk is currently accelerated by LUMS Center for Entrepreneurship (LCE) received USD 7.5 Million seed funding from local investors. Another startup Travly incubated in Plan9 they have now raised a seed investment of $ 200,000 by CresVentures.

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The man behind most successful software company in Pakistan

If you know anything about Pakistan’s tech circles then the name Salim Ghauri has probably crossed your ears more than once. As the CEO and Founder of successful software company Netsol, he possesses decades of experience working in the IT industry. This entrepreneur founded the company in 1995 and to this day it is one of the most successful software development firms in Pakistan.

But like many others, Salim did not experience instant success. His journey required arduous testing times and he used some unconventional methodologies to make his way to the top. Salim’s ascension into the higher parts of the tech ecosystem is the result of years of hard work.

Salim returned to his home country after working as an IT consultant in Australia with a plan and an idea. His beginnings were humble; his team composed of a meager four people whole together in a small room in Lahore. But despite this, Salim had big plans. Grand ideas and ambitions.

Smooth Sailing

In the 1990’s, the Internet was still a thing of fantasy in Pakistan at least, but there was growing interest in it. For Salim, getting clients on board with his ideas was a difficult task to accomplish, but he embraced the challenge wholeheartedly.  With no sales team the first five years of his business, he had to reply on his own charisma to build a good rapport with potential clients. His work paid off and Salim got his first breakthrough after a Germany luxury car manufacturer signed with Netsol in 1991 for enterprise solutions for its finance department.

Salim’s first deal proved to be just what his company needed to get itself off the ground. This contract gave him a unique opportunity to get to know the customer’s psyche and focus on building solutions that suited the client’s particular needs.

By the time 2000 rolled around, Netsol signed a USD $2 million dollar contract. It was another big break and another success for Salim, as more and more companies began to be impressed with Salim’s work and ability to deliver what they needed.

However, a combination of unfortunate and tragic events like the 9/11 terrorists attacks and the dotcom crash in 2001 meant bad news for Salim. Companies were wary of working with a company considered to be the home of terrorists. Consequently, Salim was told to move his firm to another country in Southeast Asia, like the Philippines, for that very reason. But Salim stuck to his guns, intent on building a world-class company from Pakistan despite his fears and uncertainty about what the future held for his firm.

Captivating a niche market

In the middle of the 2000’s, Netsol decided to focus on products. Prior to that point, the firm possessed and provided a wide variety of services, such as software, call centers, and business process outsourcing. But for the aim of creating a strong, recognizable brand and boost the value of the firm worldwide, Salim realized he needed to license and market Netsol’s own products.

While this new idea was taking shape, he obtained a certification for quality standards. After gaining the capability maturity model integration (CMMI) certificate, the company was vaulted to success, joining the upper ranks of society. CMMI Level 5 is the highest level a company can reach and Pakistan’s successful software company Netsol did just that in 2006. It has been obtained by less than 150 companies around the globe, according to the firm.

Multiple IPOs

Netsol was now in front of the world and people were watching them positively. Both NASDAQ and the Karachi Stock Exchange (now known as the Pakistan Stock Exchange) listed Netsol, and they now had a huge roste of clients. They had their “foot” in Japan, Thailand, Croatia, China, and Australia and had over the years been able to keep many automobile manufacturing firms loyal to them.

Today, the company excels in its production of enterprise products Mobility and Ascent. They focus in leasing sectors and financial services, aiding companies in making smart business decisions that can benefit them.

Last month, Netsol got a huge deal in the amount of USD $100 million dollars with a firm. Salim would not reveal the name of the company, but did admit it was an existing client, and a multinational firm that has plans to upgrade its systems in twelve countries. For Pakistan’s tech industry, these kind of contracts are completely unheard of.

Prior to this deal, Netsol’s largest contract was in the amount of USD $20 million contract for a company in Thailand.

What’s next for Netsol?

Just like Infosys and other IT firms help create the current group of budding tech entrepreneurs in India, Netsol strives do the same thing in Pakistan. This successful software company is dedicated to speeding up this process as much as it can and aims to help up and coming entrepreneurs take advantage of its global connections and reach, while giving them access to much needed mentors and free office space.

Salim desires to help entrepreneurs who have ideas they believe can impact the world. He doesn’t specify what exactly catches his attention, but it’s clear he desires to be more than just an investor.

As for Netsol, Salim is continuing to accelerate its growth in the next months and even years. Despite its slow start and growth, he’s seen unprecedented success. Overall, he is optimistic about the bright future of Pakistan’s IT industry and looks forward to seeing in grow in the new several years.

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