Pakistan Stock Exchange Limited (PSX) and Punjab Information Technology Board (PITB) set up a Rs. 300 million Fund, backed by the Government of Punjab, which will invest in startups focused on IT driven hardware, software and e-commerce.
This will be an initial Fund size likely to be stretched later on. It will follow aid model similar to ICT R&D Fund and Universal Service Fund (USF).
The Fund will be managed by a steering committee comprising of members from reputable incubation firms, Legal Councils, IPR specialists, entrepreneurs, industrialists, fund managers, venture capital firms and angel investors. The Fund will be disbursed in tranches based on fulfillment of mutually agreed upon KPIs to ensure accountability and effective utilization. Startups will be required to maintain proper budgets and accounting records and would subject to regular annual audits.
The Fund was discussed in the MoU signing ceremony between PSX and PITB on Monday which aims for mutual cooperation and collaboration to facilitate technological entrepreneurship in Pakistan and to provide a nurturing ecosystem for the growth of technology startups.
Mr. Umer Saif, Chairman of PITB and Mr. Nadeem Naqvi, Managing Director of PSX, signed the MoU.
Mr. Nadeem Naqvi, Managing Director of Pakistan Stock Exchange, in his speech said that technology is rapidly reshaping our world and making dramatic changes in the fields of artificial intelligence, robotics, medical science, nanotechnology, etc. Technology startups are at the forefront of innovation and they are the “disruptors” of the old order.
He gave several examples which highlighted the infinite possibilities and potential in B2B, B2C and C2C transactions as the world steps into the digital age. He gave the example of the many useful data aggregation applications e.g. applications for tourists for sightseeing and shopping, applications for foodies with restaurant guides and home delivery services, etc.
He mentioned how there were massive opportunities in e-education and e-learning as many connectivity apps were being devised for students, educational institutions and corporate / business recruiters.
Health and medicine is also progressing at a fast pace as apps are being devised which connect doctors with patients and also help individuals monitor their health conditions.
Technology is helping the public sector too, e.g. apps providing traffic congestion reports at key junctions are being developed. Technology can help financial industry by creating digital credit history for the large unbanked population, thus enabling increased lending outreach to micro and small businesses.
Dr. Umer Saif, Chairman PITB, in his speech said that the startup culture in Pakistan is mainly driven by the nation’s young talent working with accelerators and incubators. PITB’s technology incubators, such as Plan9 Tech Incubator for early stage startups, and PITB’s technology accelerators, such as PlanX for mid-stage startups have incubated more than 130 startups.
Plan 9 and Plan X are now a whole eco-system for technological innovation and entrepreneurship along the lines of the Silicon Valley, with impact all over Pakistan. He said that in Pakistan the future for entrepreneurship in general and technology based startups in particular looks promising.
He also discussed formation of National Entrepreneurs Network (NEN) to provide a forum for all leading incubators, accelerators and VC firms to join hands to further promote this fast evolving sector. National Entrepreneur’s Network (NEN) will provide a collective voice to national entrepreneurial ecosystem. He said that they had agreed that PSX will work in collaboration with the NEN to develop a platform for startups and investors which will act as a cost-effective bridge between startups and investors.
Both PSX and PITB agreed that partnership can indeed serve as an important stepping stone for budding entrepreneurs who are looking to raise investment locally. This will not only encourage employment growth but also increase the technological and economic power of Pakistan.
PSX Private Market
Pakistan Stock Exchange plans to launch the PSX Private Market soon, contingent on the approval of the PSX Board of Directors and SECP.
It should be noted that this will not be a crowd funding platform, instead PSX Private Market would be a web based platform designed to bring together startups and investors.
The MoU envisages that PSX and PITB will jointly approach relevant regulatory bodies to advocate the case of startups and will propose framework to assist startups in raising equity financing by introducing favorable listing terms particularly in terms of paid-up capital.
this fund has not been set up yet. PITB is trying to set it up.