Pakistan’s startup ecosystem, Zayn Capital Investment thesis, Future projections and more | COLABS in conversation with Faisal Aftab

Team COLABS spoke to Faisal Aftab, Co-founder & Managing Partner – Zayn Capital’s Frontier VC Fund focused on Pakistan. Faisal is also the Founder of BitRate Digital Assets, a US-based Crypto Fund. We sat down with him for an insightful conversation and this is our take on how Pakistan’s ecosystem has evolved over the past few years, what is the investment thesis of Zayn Capital and his exciting projections for the years to come.

Team COLABS spoke to Faisal Aftab, Co-founder & Managing Partner – Zayn Capital’s Frontier VC Fund focused on Pakistan. Faisal is also the Founder of BitRate Digital Assets, a US-based Crypto Fund. We sat down with him for an insightful conversation and this is our take on how Pakistan’s ecosystem has evolved over the past few years, what is the investment thesis of Zayn Capital and his exciting projections for the years to come.

What is Zayn Capital?

Zayn Capital is a seasoned investment firm consisting of executives, investors, founders, and operators who have partnered with and actively support startups in Pakistan, Bangladesh, & MENA.

The firm consists of three divisions:

  • Zayn Frontier Fund (Pakistan Focused VC Fund) led by seasoned venture capitalist, Faisal Aftab
  • Zayn FinTech Fund (Regionally Focused FinTech & Debt Fund) led by former Goldman Alum, Faisal Chowdhry
  • Zayn Advisory led by former Goldman Alum, Ralph Birt

Zayn Capital aims to bring experienced capital to startups in emerging markets. It is a Multi-strategy investing – equity, debt and everything in between – focusing on Pakistan, Bangladesh, and the Middle East with the following ends:


As experienced local partners and advisors, Zayn Capital helps connect global capital and investor interest to high-quality startup investment opportunities in MENA + South Asia.


Early-stage fintech ventures in emerging markets often face limited and sub-optimal funding options. To cater to this issue, Zayn Capital provides experienced alternate capital on founder-friendly terms.


Zayn Capital also provides a variety of debt and equity options to give founders greater flexibility and reduce equity dilution during growth funding.

How is sharing economy disrupting the world?

A new trend called the sharing economy or collaborative economy is sweeping the world around us. Essentially, this concept involves pooling resources, exchanging goods, time, and knowledge. Sharing economies are currently experiencing rapid expansion, favoring horizontal organizations and structures over vertical and hierarchical ones. It is characterized by economic cornerstones such as reducing expenses and limiting or eliminating intermediaries. Despite this, it is strongly influenced by social and ecological values, as well as the belief that using is more important than owning.

With the likes of Uber, Airbnb and other disruptors, the world is transforming from “doing” digital to “being” digital.

What is Digital Currency and how is it transforming the world?

Currently, we live in a world where we settle exchange of value either with untraceable physical cash or via analog payment settlement systems such as SWIFT, ACH, FEDWire and Credit Cards. The current analog payment systems have a longer settlement period thereby, making physical cash preferential and untraceable. The world is now moving to new blockchain-based digital settlement systems with instantaneous settlements which are gradually replacing the traditional settlement systems with afloat.

“Digital Cash” creates instantaneous settlements, which is the exchange of value disruption where “money is merging with the internet”.

The unprecedented growth of contactless payments has led to an outstanding performance by major companies offering cashless payment methods, which now consider contactless a priority, an indication that digital payments are no longer seen as a ‘nice-to-have capability but as a must-have.’ The coronavirus pandemic has also accelerated the shift from cash to digital payments, resulting in huge demand for contactless payments.

Where does Pakistan lie in terms of the Digital revolution?

Pakistan, primarily a cash-based economy is currently facing a rapid “financial revolution” in terms of FinTech and Digital Payments, which is going to leapfrog adoption in the coming years. Pakistan in terms of its evolving market is comparable to India and Indonesia, lagging by only five to seven years. Just like India’s “Unified Payments interface” which facilitates digital payments with lower fees, Pakistan has also launched RAAST for interoperability and reduced transaction fees. In Pakistan, currently, Easypaisa and JazzCash are the dominant payment wallets, providing transaction services. However, transaction fees today are high for people to rapidly embrace digital payments. Cloud Banks is also an emerging trend in Pakistan with the likes of NayaPay, SadaPay and TAG focused on onboarding the unbanked through different strategies of adoption.

What is the investment Thesis of Zayn Capital?

Zayn Capital invests in startups that are working in line with the “financial revolution”. Their recent investments in Bazaar Technologies, Tazah Technologies, PostEX or Kravemart are all based on the same thesis. Zayn views the market with a FinTech lens, visualizing the digitization of the entire economy in a network of platforms that will also bring the informal economy into a digital fold. A huge component of the evolving ecosystem is going to be fintech which is a very broad term but the crux of it is digital payments and lending which can range from installments plans such as Buy Now Pay Later (BNPL), working capital financing, factoring, mortgage lending, microfinance and nano lending.

While Zayn Capital does not focus on any particular vertical within the technology sector, however, they look at the entire technology ecosystem from a fintech lens, which can be seen via the End of the year 2021 post by Zayn Capital.

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2021 has been quite an exciting year for Zayn Capital as they have deployed capital into a significant number of deals with 16 disclosed deals. 4 deals in Series A – Bazaar, Grocer app, & Bagallery. The remaining investments were pre-seed and seed. The firm is also actively working via Venture Debt Financing for companies such as PostEx and Truck It In alongside traditional local banks to help them structure financing for tech platforms.

Pakistan’s ecosystem is going to eventually connect digitally with the rest of the world as platforms and payment systems integrate. Global Big Tech (companies like FAAAMs, Alibaba/Tencent et al) will eventually consolidate through growth by acquisition in Pakistan and across the world. The whole world will turn into a Digital Network one day. With this disruption, payments & identification of the source of funds would become seamlessly transparent with no concept of hiding revenue or cash. Regulations such as FATF, OECD CRS and AEOI are pushing the world towards traceability and a cashless society.

Where are Health and Edtech?

Zayn Capital as an investor looks at every sector but it is more about the “timing” when it comes to any sector growth in a particular market. There was a time when E-Commerce boomed, then Mobility had Careem, Bykea, then Grocery so it’s a step-wise disruption. If we look at Edtech, it has not yet attained scale and meaningful market share. But that is not to say that EdTech and HealthTech will not have their day.

What will this ecosystem look like in years to come?

Zayn Capital anticipates that the market will continue to see larger pools of capital flows to Pakistan with occasional liquidity crunches along the way dependent on the 10 Year US Treasury Yields. We will also continue to see a greater diversity of investors coming into early and late-stage companies. Venture Capital Investments will likely cross a $1 bn in 2022-2023. Series A and B round activity is also anticipated to increase as many of the companies that raised capital in 2021 start seeking growth capital.

With the financial revolution, Fintech platforms will scale rapidly in 2022 – 2023. It is very likely that two to three Cloud Banks will emerge as key players and scale rapidly.

Pakistan has already enjoyed Unicorns originating from wave one startups such as Daraz (Alibaba) in terms of its GMV multiple today, FoodPanda (Delivery Hero) and But in the coming few years, we will definitely see quite a few Unicorns. Pakistan will likely have 10 to 15 Unicorns by 2030 with an overall market cap in excess of $30 billion for all startup ventures.

What would you advise emerging entrepreneurs?


Faisal Aftab also shared insights on what emerging entrepreneurs need to choose to work on when it comes to the industry. For example, someone building a communication platform (competitor: Whatsapp) or a traditional social media platform (competitor: Meta), may find it difficult to get funded as Pakistan is fairly far in the adoption curve of these platforms. Instead, Founders should focus on emerging themes such as Fintech and technology platforms that solve problems unique to Pakistan.

An inspiration for aspiring founders should be successful platforms in comparable markets such as India, Indonesia, MENA or LATAM in terms of human behaviors. What are the problems that people are solving there and if those problems can be solved in Pakistan with a local flavor.

There are a lot of problems relevant to Fintech that need to be solved so entrepreneurs should consider bringing traditional processes online and creating efficiency while connecting to digital payments & lending which is the crux of financial inclusion. No matter what we do, ultimately it will touch payments or lending. In the end, we must think of everything as a data aggregation play.

For instance, the world is now moving to Credit Scoring Engines utilizing multiple data points to assess the creditworthiness of a borrower vs the traditional Credit Scoring Models such as FICO, Experian et al that aggregated inaccurate or obsolete data points in many instances.  The New Credit Scoring Engines will utilize data points from a user’s online activities and behavioral patterns, bringing speed and efficiency to assessing creditworthiness. Availability of credit will increase drastically in frontier markets such as Pakistan as historical data is made available to lenders from the rapidly growing digital economy. Even behavioral activity and usage patterns on social media platforms such as Facebook or Instagram, communication platforms such as Whatsapp or basic data points such as bill payment histories will be used to assess creditworthiness. It’s sort of behavioral science so it’s important for founders to understand the structural changes to the global & Pakistani economy in the coming years.

While Pakistan has lagged in digital adoption in the past decade, we are going to leapfrog in adoption over the next 5-10 years. As an analogy, there was a time when people in Pakistan would wait years to get a landline telephone connection, however, with the launch of cellular phone technology, we leapfrogged in adoption, where the majority of the adult population today has a mobile phone. In the same way, Fintech and Digital Payments are going to be adopted at a very rapid pace over the next 3-4 years. In 5 years, we will look like a modern digital economy especially in urban Pakistan, and gradually adoption will move to rural Pakistan once 5G or platforms like Starlink make data connectivity cheap and ubiquitous.


We asked what he looks for in founders, Faisal Aftab responded that it depends on the stage of the company from Pre-Seed to Series A. Pre-seed by definition are an idea and a team, without proof of concept so we look for past experiences, people that have worked at or demonstrated scaling at companies such as Careem, Swvl, FoodPanda, Daraz – usually middle managers – who have seen scaling firsthand.  At the Seed stage, there should be some level of traction and early signs of a product-market fit.  At Pre-Series A, Series A,, we look at growth numbers i.e. monthly revenue, user growth, Lifetime Value, CAC and similar metrics. We tend to do a deeper dive at later stages as performance is more evident.


The team is always the key consideration at any stage of the company’s life cycle. Ultimately, it is the people and their execution ability that investors are betting on. The team should ideally be balanced i.e. 2-3 co-founders who are all adding relevant value to the equation, complimenting each other’s strengths to form a cohesive team.

Concluding Remarks:

In conclusion, VCs are looking at the evolution of the system. Just like the change that happened between World War I and II, a transformation is happening at an accelerating pace. The pace of technology adoption in this decade is going to be faster than the last 30 years combined. A fair chunk of the world’s economy will be digitized. After the evolution of Pakistan’s ecosystem, the next market will be Africa attracting global investors. We will likely witness a change in social behavior in how we deal with governments, businesses and people. The key commodity in the information age is going to be data as it will be used ubiquitously. A shift from a two-dimensional to a three-dimensional digital world will be seen like a billion people will likely have adopted the Metaverse by 2030. That adoption would entail office meetings, conferences, learning, gaming and social interactions. Hence, it is advised to ignore the cognitive biases of what has transpired over the last 30 years but instead to think outside the box. All Big Tech companies including Google, Microsoft, Facebook, Apple, Tencent, Alibaba, ByteDance, etc will compete for metaverses similar to the competition that played out during the mobile operating system adoption when platforms such as Apple’s iOS, Google’s Android, Microsoft’s Windows Mobile battled for the smartphone. We might see a new entrant such as Roblox dominating the space. Anyone building a product should try to visualize what the future may look like in 10 years and build for that future.