Despite being the fifth most populous country in the world, Pakistan has long been ignored by international tech companies and investors: PayPal services are unavailable in the country, Amazon’s e-commerce website doesn’t operate here, and Apple didn’t even have an official reseller in Pakistan until recently. Although Pakistan has been touted as the world’s last big untapped market and drawn almost $366 million in funding in 2021, local investors continue to worry that global venture capital (VC) firms aren’t serious about the country.
That changed in December 2021, when Karachi-based CreditBook, a digital ledger app, raised a pre–series A round co-led by Tiger Global. The single most active investor in the world, Tiger Global made an astonishing 335 deals last year. Pakistani investors and entrepreneurs say its arrival in the country marks a new era. “Their presence is a very big deal. It shows the market is ready, and it’s here to stay,” Faisal Aftab, co-founder of Zayn Capital, told Rest of World.
Tiger’s footprint in Pakistan has spread quickly since: The New York–headquartered investment firm participated in a $70 million series B round for e-commerce firm Bazaar in March and in a $2.1 million pre-seed round for B2B supplies startup Zaraye in April.
Tiger Global has played a vital role in the success of the startup ecosystem in neighboring India. It backed some of the country’s most iconic tech ventures, including e-commerce major Flipkart (now owned by Walmart) and ride-hailing major Ola. In 2021, it was the most active private investor in India by dollar value, deploying $2.25 billion in the country.
Tiger Global’s moves in Pakistan are designed to replicate the firm’s success in India. CreditBook, Bazaar, and Zaraye all have Indian counterparts: OKCredit, Udaan, and OfBusiness, respectively.
All of Tiger Global’s investments in Pakistan so far are B2B companies that cater mainly to the retail sector, which accounts for over 18% of the country’s GDP and is largely undocumented. “It’s about the total addressable market. The segment is massive and undocumented, and they bring in experience in similar models across different countries,” said Aftab, whose firm, Zayn Capital, is a co-investor with Tiger Global in at least two Pakistani startups.
True to its global reputation of being aggressive and quick in decision-making, Tiger Global has moved swiftly in Pakistan. “I have never met investors who are this prepared,” Hasib Malik, co-founder and CEO of CreditBook, told Rest of World. “They were able to understand exactly what we were doing and what phase we are in and go deep. As a result, conversations or questions that would happen in the third meeting were already happening in the first because of the preparations they had, without us providing them anything. This was super impressive and sped things up.”
The executives at Zaraye had a similar experience. A B2B raw materials procurement app currently catering to textile and construction industries in Pakistan, Zaraye started looking for funding in late October 2021. In mid-November, one of the company’s angel investors introduced the executive team to John Curtius, who leads Tiger Global’s software and B2B practices. In early January, Zaraye co-founder Ahsan Ali Khan and his team got on a call with Curtius, and 30 minutes later, the deal had been signed off. Typically, such deals can take up to four rounds of calls and interactions to be finalized, Khan said.
Tiger Global’s continued presence in Pakistan is, despite the current global funding crunch, a source of comfort for entrepreneurs in the country, even as the American investor itself is going through a rough patch. By May, the firm had clocked year-to-date losses of 52%, forcing it to cut management fees amid a string of public market downturns and private markdowns.
“Investors trust Tiger’s acumen, and their presence signals to other big names in VC of Pakistan’s potential, many of whom are still looking for deals here, even though their plans slowed down due to market conditions,” says Zayn Capital’s Aftab. Another major investor, Sequoia Capital Southeast Asia, has made an undisclosed investment in a Pakistani startup, multiple sources told Rest of World. Sequoia did not comment on the investment.
“From a macro view, having such names is extremely important because it only builds our position of strength and encourages other investors to come in,” CreditBook’s Malik said. “Just having that name makes other people on the cap table more confident about the company,and de-risks your proposition to other investors. It also helps the way you attract talent, who now see you as more stable, and gives you significant market advantages, be it senior leadership or even hiring outside Pakistan.”