A local investor’s take on the investment opportunities in Pakistan

This article is from an episode of Asia VC Cast, a podcast hosted by Daniel Song. This is heavily revised from the original show transcript. For the full interview, go here.

Kalsoom Lakhani is the founder and CEO of Invest2Innovate, an accelerator that supports startups and the broader entrepreneurship ecosystem in growth markets. Launched in 2011, the firm operates in Pakistan and has accelerated 41 startups which have gone on to raise over US$6.5 million in funding and created over 1,500 jobs in the country.

Lakhani is also a partner at i2i Ventures, a Pakistan-based venture capital firm and the country’s first female-led institutional fund.

Tell us about yourself and how you started i2i Ventures.

The story of i2i Ventures starts with Invest2Innovate, which I founded eight years ago to support startup communities in frontier markets. Our belief is that the next great innovators are coming out of places like Nigeria, Vietnam, and Pakistan.

We’ve now expanded our work into three verticals – incubate, invest, and insight – going beyond our flagship accelerator program to support startups in other geographies as well as throughout Pakistan.

Because we realized there was a lack of information about frontier markets, we also started a research arm, where we do a lot of in-house research with clients and partners.

Finally, i2i Ventures, our investment arm, was launched because the investment landscape in the country is very nascent. So many amazing companies and entrepreneurs just weren’t getting access to capital. Often times, you would see investors who want to take 70% or 80% of a startup, which would not set them up for future success.

Why start a company in Pakistan and what opportunities do you see in the market?

Obviously, I’m Pakistani. So for me, Pakistan was always a place where I felt I belonged.

The country is also an untapped frontier. According to investment research firm MSCI, Pakistan is on the emerging markets index. But it’s not unlike a lot of other markets, and that’s why our work has expanded and is supporting programs in other geographies in the region like Nepal, Bangladesh, Cambodia, and Vietnam.

There’s a sameness to these countries – an enormous amount of challenges, a lot of young people, and plenty of opportunities as a result.

So my home country was the first place I thought of, but there’s similar challenges in other markets. And if we can transfer some of that knowledge, that would be really cool as well.

Can you walk us through Pakistan’s startup ecosystem and its evolution?

When we started in 2011, the ecosystem was really nascent. There was maybe only two or three incubators and accelerators, not including ones that were at universities, and there was barely any formal investors.