Editor’s note: We put together a comprehensive look at the country’s companies that have successfully raised capital, complete with a list of 33 of Pakistan’s more prominent funded startups here.

As founder of Pakistani startup investment fund Zayn Venture Capital, Faisal Aftab has spent plenty of time grilling entrepreneurs. Never before, however, has he done it in front of an audience of millions.

Aftab, who spoke to Crunchbase News via an oft-spotty hotel Wi-Fi connection, was in Karachi to begin filming the first episodes of “Shark Tank Pakistan.” There, he will join a panel of judges to vet pitches from a selection of camera-ready founders.

Faisal Aftab, founder and general partner of Zayn Venture Capital

The lineup won’t be business-as-usual for the U.S.- and U.K.-educated Aftab, whose firm has to date focused on fintech, logistics and e-commerce. While these may be compelling sectors for venture returns, consumer products — like food and beauty products — will likely play better for a TV and YouTube audience.

Oddly, the Shark Tank filming was coincidental, as we’d originally discussed an interview a couple months ago. The aim was to get some insights into funding to the region, with an eye to seeing why Pakistan — a country of 235 million people with widespread smartphone adoption and plentiful entrepreneurial and tech talent — has attracted rather meager sums of startup investment to date.

True, there are some Pakistani startups that have raised good-sized rounds, such as courier service PostEx, online grocery service Krave Mart, and student loan provider EduFi (founded and led by fellow shark Aleena Nadeem). But total investment is still measured in the hundreds of millions — less than a single mega-round for a gen AI unicorn these days.

Perhaps the tides are shifting. Pakistan was a latecomer in wireless infrastructure, delaying uptake of popular apps, said Aftab. These days Pakistanis are making up for lost time with stepped-up adoption of digital payments and other app-enabled tools.

Following are some of the topics we we touched on in our discussion:

The motivation to launch a Pakistan-focused venture fund

Aftab said one motive was to seek out opportunities around growing access to smartphones and reliable internet connections. Pakistan was a late bloomer in this area, as 3G and 4G didn’t arrive until 2014 and 2015. Because most of the population can’t afford desktops and laptops, smartphones are their primary device for accessing the internet.

Today, per Aftab, Pakistan is still in its “first wave” of app economy startups. Zayn’s portfolio is reflective of this, with companies in areas including online grocery delivery, instant loans, digital freight management and fashion e-commerce.

Fintech is a particularly huge opportunity, Aftab observed, given that historically banks have not done much consumer lending in Pakistan, and processes like credit scoring were not widespread. Digital payments adoption has also been on a tear.

Pakistan’s slowing investment pace

Investment in Pakistan started to take off in 2019 and then “rose like crazy” during 2021, Aftab said. After that, however, funding to the region took a tumble, along with overall global venture investment.

“What we’re missing right now is the growth capital,” he said. That leaves many existing funded startups and their backers in a challenging predicament as they look to finance further scaling. He’s said he’s optimistic, however, that the current slowdown will prove temporary.

How the Shark Tank deal flow is shaping up

Aftab said sharks are not allowed to see any of the deal flow, but he’s expecting a mix of both tech and nontech, and “all of the judges are putting in personal capital.” On the nontech side in particular, there are a lot of companies that have had no previous funding.

A lot of it is going to be consumer goods. Within Pakistan, Aftab said he’s seeing a burgeoning industry for a lot of consumer products such as organic shampoos, oils, local foods and furniture.

The show is expected to launch to the public either late this year or early next, so we’ll likely have to wait for a fuller picture of who’s vying for the sharks’ attention and capital.

Pakistan’s growing reliance on domestic products

Aftab noted that much of the growth in domestically produced consumer products is relatively recent.

Basically, what happened when the U.S. raised interest rates in 2022 is the dollar went up and caused the cost of energy to skyrocket for energy importing countries like Pakistan, he said. In the past there was little point producing some products domestically because it was cheaper to import them. But now, the real effective exchange rate boosts the need to manufacture domestically.

“It’s created a massive opportunity,” said Aftab, adding that he’s surprised at how many domestic products he’s buying these days — particularly in categories like soap and shampoo — where he used to purchase imports.

Cleantech as a growth market

I observed that to date, there doesn’t appear to be much cleantech startup investment in Pakistan, and that seems a bit surprising given the seriousness of air pollution in Lahore and other cities, extreme heat, water scarcity and other issues.

Apparently, however, this is an area where growth is expected to pick up.

“It’s actually happening now,” Aftab said. If one looks at thematic investors, they were more interested in platform and fintech opportunities for their funds a few years ago. But now there are some investors focusing on climate- and cleantech-related startups.

Recently, for instance, Zayn looked at a company focused on efficiency in HVAC systems for big buildings. And today, he said, “the funds that are raising, they all have a cleantech allocation or a climate allocation.”

Illustration: Dom Guzman