The year 2022 proved to be a great success for the tech industry in Pakistan, as covid-19 packed and left many great opportunities for startups and small tech business acquisitions. The tech industry of Pakistan made a remittance of $2.616 billion. The industry saw a 24 percent increase in revenue which was $2.108 billion in 2021. Information Communication Technology (ICT) Analyst at Topline Securities Nasheed Malik said,
“This marks a major achievement for Pakistan, as it indicates a strong and thriving startup ecosystem. Pakistani startups have not reached a point where they can exit through initial public offerings (IPOs) at the stock exchange – instead, these exits are mergers and acquisitions,”
“The management of these startups expand to their maximum extent and then decide to be acquired by bigger players in order to scale up,”
10Pearls Acquires Digital and Software Companies
10Pearls arguably Pakistan’s biggest IT company, acquired two IT setups in 2022 including Whiz, a Peru-based software development company, and Pixel506, a Brooklyn-born, Costa Rica-based digital agency. Whiz is a high-growth software development company focused on providing agile software development, innovation services, and technology talent to customers in North America.
Systems Ltd. Acquired NdcTech
Systems Limited, known as Pakistan’s biggest tech service provider, acquired a leading IT & Consulting company, NdcTech, one of the fastest-growing companies in the banking technology sector.
NdcTech is now operating as a fully owned subsidiary of Systems Limited under the same CEO, Ammara Masood. The IT company and its subsidiary also won several global recognitions in 2022. Systems Limited was granted Forbes Asia’s Best Under A Billion award for the third time in a row, while NdcTech won the best channel/platform implementation award at IBS Intelligence Global Fintech Innovation Awards 2022.
The acquisition of NdcTech by Systems Limited has enhanced the synergy of both companies allowing them to leverage the strengths of each other to develop advanced capabilities for banks and FIs. Furthermore, it has enabled NdcTech to extend its footprint into newer, untapped markets in the Middle East, Africa, APAC, & European regions.
PostEx acquires Call Courier
PostEx, a fintech operator, acquired Call Courier, a logistics service provider to expand its logistics offering making it the largest e-commerce service provider in the country. This deal created a strong synergy of PostEx’s upfront payments, revenue-based financing, and technology with Call Courier’s nationwide logistics infrastructure. PostEx has expanded its outreach with 1.3 million users with over 8,000 merchants across 500 cities in Pakistan. Its monthly loan book has surged over to $12 million.
US-based DigitalOcean Holdings Inc. Acquires Web Hosting Firm
US-based cloud services provider DigitalOcean Holdings Inc. acquired Cloudways, a Pakistani web-hosting firm, for $350 million. This is one of the biggest acquisitions by the value of a Pakistani startup by an American firm. It will be streamlining processes of digital development for small and medium enterprises.
Swiss company buys Pakistani Fintech Operator
A Swiss company ZoodPay made a 100 percent acquisition of a Pakistani fintech, Tez Financial Services (Tez). ZoodPay is a digital lending platform for e-commerce in the Middle East and Central Asia.
According to experts, the company is positioning itself as a key new player in the digital lending and fintech industry in Pakistan through this acquisition. ZoodPay has raised $50 million to date, with participation from leading global and strategic investors including Zain, the leading MENA-based telecom entity, and London-based VC Fund Sturgeon Capital.
All these acquisitions are an indication that Pakistan-made startups are now becoming more confident and stable financially and management-wise they are more expressive. According to an Invest2Innovate (i2i) Ventures report, in 2022, an increase in merger and acquisition (M&A) activity became a notable trend, with both international companies acquiring local players, local players merging or acquiring other local players, and, in one case, a local player acquiring an international player.