How hard is it to get US VC funding for a Pakistani Shop?
Twitter
Facebook
Delicious
Digg
Stumble
Reddit
A question from the ages then. US VC Funding for startups is already hard enough as it is, but how hard is it for a Pakistan-only company to be able to do that?
Intel has a VC fund for “Middle East and Central Asia” totaling $50MM that they have been investing over the past year. Even though Pakistan was included on this, most of this money went to India.
Clearly we are making innovative products in this country, but why the difficulty raising VC funds. Is it because a lot of us never try? Is it an image problem that makes the investors uncomfortable?
When it has worked for people such as Pixsense, what has been the general approach and formula? If there standard requirement seems to be a US Presence, then are there any US based Incubation Centers for Pakistani Companies that local entrepreneurs can connect to?
I want comments from some people from the industry.
I pose this question to the following people:
- I ask this to Mr. Monis Rehman, CEO Naseeb Networks / Rozee, who I believe has a VC funded venture based out of Silicon Valley (but now mostly in Lahore)
- I ask this to Mr. Jawwad Farid, CEO Alchemy Associates, who is successfully managing a bootstrapped local startup on the verge of expanding overseas.
- I ask this to Mr. Faizan Buzdar, CEO iScrybe, who are ramping up for launch of their innovative product Scrybe
Please give me your insights through the comments.
5:28 pm
Here are my two cents:
a. I think you need to add Adnan and Faraz (Pixsense) to this debate since they have actually gone out and done it well.
b. Having said that I am a firm believer in the fact that you first need to build a business and then worry about funding.
c. Given that you have built a business, how difficult is it to attract US VC funding with just a simple desi interface. It would put that as a long shot. You need to have a viable US presence before you can get into a serious conversation with a US based fund. The viable US presence can simply be a marketing front office or a holding company, but it still needs to be there.
d. The good news is that valuations multiples for Pakistani ventures are still running lower than India. Which means that if a US investor finds Indian values expensive, he can always look westwards of the border for some great bargains.
e. If you are serious about funding, your best bet is a local strategic investor. There is an obscene amount of smart local money floating around that you can pick and chose from. It is not always a clean deal, but it’s a far easier deal. TRG did that, we have done it. If you don’t like institutions, you can do angels. There are issues that you may face on a later date, but for most early stage businesses angel funding could be a Godsend.
2:49 am
I agree with Jawwad that it would be useful to bring Faraz Hoodbhoy and Adnan Agboatwalla into this conversation. Pixsense, a company that has been in operation in Karachi for little over a year has grown from 2 people to around 50 and intends to grow to about 100 this year. They have obtained two rounds of funding from the US already – the second one from Qualcomm. That in itself is truly amazing. These two young men have worked hard to get to this stage. A conversation with them is truly inspiring. They have agreed to hold a session on how and what they had to do to get to where they are. This is scheduled for June when Faraz is next in town. P@SHA will circulate the details on this forum when a time and date is fixed.
6:53 am
Sounds great.
1:51 pm
Jehan / Jawwad:
Since I’m sure you must be in touch with Faraz and Adnan perhaps you can ask them to come here to add their two cents.
I dont have a way to contact them directly.
8:14 pm
Hi,
Shoot me an email.
I am based out of Karachi.
-Adnan
6:51 pm
Tech Lahore has written some a nice article and analysis on this
http://techlahore.wordpress.com/2007/10/14/why-vcs-arent-investing-in-pakistani-companies/#more-45