No, Pakistani startups didn’t raise over $300 million in investments last year — nothing even close to that

Zubair Naeem Paracha
4 min readJan 7, 2019

TechJuice.Pk, a leading Pakistani tech publication published a story last week claiming that Pakistani startups raised $341 million in 2018. The article was shared by many in the Pakistani startup ecosystem. It is perhaps being seen as acknowledgment of the fact that the tech ecosystem in Pakistan has come a long way and is finally attracting VC money. That might very well be true. As TechJuice in this piece points out, we are finally seeing a lot of activity.

But the claim that Pakistani startups raised over 300 million last year is a stretch.

Let me explain how.

For any such report, it is very important to define few basics and share the methodology.

  • Definition of a startup
  • Definition of a Pakistani startup
  • What counts as investment

TechJuice doesn’t do any of that. And that is why they’ve ended up listing many ‘investments’ that shouldn’t have been a part of this list/report. Here are some of them.

  1. Ant Financial’s $184.5 million ‘investment’ in Telenor Microfinance Bank

Telenor Microfinance Bank is a subsidiary of Norway-headquartered Telenor Group. It was previously known as Tameer Microfinance Bank. Telenor had acquired 100% of Tameer in March 2016 — the Norwegian company already owned 51% of the bank and acquired the rest in this transaction.

Now last year, Ant Financial announced acquisition of stake in Telenor Microfinance Bank for $184.5 million.

Don’t understand how subsidiary of Norwegian corporate is a Pakistani startup. Let’s just say that yes it’s for Telenor Pakistan — they’re Pakistani. But how are they a startup?

2. OLX’s $89 million investment in ‘CarFirst’

TechJuice lists CarFirst as a Pakistani startup raising $89 million. CarFirst is headquartered in Pakistan. Its a used cars marketplace owned and run by Frontier Car Group which is a Berlin-headquartered startup specializing in “developing, launching, and operating used-automotive marketplaces within emerging market economies.” The $89 million investment was raised by Frontier Car Group — not CarFirst.

3. Excel Labs’ $31 million

Not familiar with them but their website suggests that they’re a company that owns and runs a network of laboratories all across the country. Their website notes:

“Excel Lab was founded upon core values of patient priority and accurate testing. During the past 25 years we have built up a legendary reputation for excellence in both, from a small local lab we have grown to become a regional network. ”

Not sure how do they qualify as a ‘startup’.

4. ‘Cloudcade Pakistan’ raising $6 million or $6.5 million

Cloudcade is a San Francisco-based free-to-play mobile games developer and publisher. In July last year, they announced that they will be forming a game studio in Pakistan and Ammar Zaeem, co-founder of a Pakistani mobile game studio Caramel Tech will be joining them and lead this new studio. VentureBeat had reported that Caramel Tech’s 50 engineers will also become a part of the newly established Cloudcade studio in Pakistan.

First problem with the $6 million (or $6.5 million as TechJuice’s reports) is that it is supposed to be invested in three years. That’s what the announcement said as reported VentureBeat.

Second problem is that Cloudcade is also not a Pakistani startup even if they have a studio in Pakistan and decide to invest in it. It would be like claiming that Microsoft is an Indian company because they have engineering offices in the country.

4. Ricult’s $1.85 million

The Ag-Tech startup Ricult is active in Pakistan, has an office in the country and its CEO is also a Pakistani. But the startup on its website, and LinkedIn company page says that its headquartered in Philadelphia, United States.

5. Grants are not ‘investments’

The report also features different grants received by startups. To their credit, TechJuice has clearly labeled some of these as grants. This is probably not a very big deal but grants should not be treated as investments. They’re a source of funding and if the title of TechJuice’s report had used ‘funding’, it would’ve made sense to include them. Not when it uses ‘investments’.

The Pakistani ecosystem may have been showing some positive signs lately but it’s not even close to reaching $300 million in annual VC deals anytime soon.

If you remove all these big investments that shouldn’t have been included in the first place, you’re left with maybe ~$30 million which seems like the actual amount of investment raised by Pakistani “startups”.

Happy to continue the conversation on Twitter or Facebook.