The only startups worth funding solve a problem that already exists

A childhood in a Riyadh compound and a charity that wouldn’t scale

Aleena Nadeem grew up inside a British compound in Riyadh — a gated, westernised world where, she jokes, people assumed she rode a camel to school. She was born in New York, lived in London, did middle and high school in Saudi Arabia, and had never lived in Pakistan until October 2021, when she moved to build Edufy. She is, by her own description, an overseas Pakistani.

What kept the country present was her family’s charity. The Progressive Education Network has been paying school fees for children in Pakistan’s public sector for over a decade — the figure she cites is 700,000 students, mostly at the primary and secondary level. She worked there every year from childhood, and it shaped her thinking more than anything else. Charity, she concluded, is good but not sustainable. “It’s not going to change the game for Pakistan,” she says. Every cycle you have to go back to donors and ask for more. That frustration — a pressing problem with no self-funding mechanism — is the seed of everything she built later.

MIT, Goldman, and learning the shape of credit

Nadeem went to MIT’s Sloan school for business and finance, a poster of the campus pinned to her bedroom wall in Saudi as “manifestation 101.” She is dismissive of the scores that get treated as status symbols in Pakistan. What matters, she argues, is what you do with the degree afterwards — and she is sharp about watching talented women collect prestigious admissions and then do nothing with them. “If I’m just putting the degree on my wall,” she says, “then I have taken a seat from somebody who is maybe more deserving than me.”

She offers a deliberately controversial read of her cohort: an inverse relationship between EQ and IQ. The genuine geniuses, the top of the batch, often went into PhDs and pure research. The students just below them — the B-to-B-plus tier with the right balance of intelligence and on-the-ground human instinct — are the ones building wild things. Her example is a friend, Tarek Mansour, who founded a betting-and-FX startup that reached a billion-dollar valuation. Building a billion-dollar company, she argues, takes a level of human EQ the pure geniuses don’t always have. The killer combination is one of each.

After graduating in 2016, she went straight to the fixed-income desk at Goldman Sachs in London, working with the treasury departments of large tech companies on where to park their cash. The lasting lesson was credit itself — how risk changes with tenure, which fixed-income products a corporate treasurer actually feels safe holding, and why. Three years later she moved to Ventura Capital, a late-stage fintech fund, where she worked on the credit side of growth deals and helped raise $50 million for Paytm in India.

Why money flows to founders early and to numbers later

Nadeem draws a clean line through how venture capital actually evaluates a company at different stages. At the earliest stage, she argues, the FOMO-driven bets are not as foolish as they look. The product pivots so many times that there is nothing stable to underwrite except the founder — their tenacity, their desire, their ability to see some version of the vision through. “You’re investing in the tenacity of the founder,” she says.

Due diligence becomes decisive at growth stage. At Ventura — a series C to D fund — they spent serious time inside the financial statements, and the question of path to profitability had already arrived before the global tech crash forced it on everyone. The era of Uber-style losses with no one asking when customer acquisition cost would fall was closing. In emerging markets, she says, that question lands harder: capital is scarce, so a business has to be able to sustain itself.

That framing sets up the disagreement at the centre of the episode. Muzamil has been a long-term cynic of Pakistani startup fundraising — too many rounds celebrated as ends in themselves, too little clarity about the core problem being solved. He contrasts Pakistan with India and Indonesia, which first built hard industries, services, and exports — India does roughly $150 billion in IT exports alone — creating the middle class that startups then layer on top of. Pakistan, draining dollars rather than earning them, doesn’t obviously have that base.

The one problem a startup can’t solve for

Nadeem accepts the cynicism and answers it with a thesis. In a capital-constrained economy, technology should be pointed at real problems. “If you’re solving a real problem, the money will come,” she says — and then sharpens it. The single failure mode you cannot engineer around is building a product for demand that doesn’t exist.

“Maybe your UX is not correct — go back and fix it. Maybe your product is not making sense, maybe they want a longer tenure. The one problem that you cannot solve for is there being no demand for your product. You can’t create demand.”

She is unusually candid about marketing. Edufy is two years old and this is her first podcast; she has worked quietly, by choice, because she is not a fan of selling herself and believes everyone else is chasing headlines. A $6 million raise, she says, means nothing if it’s all gone tomorrow. Muzamil agrees, and explains why she topped his list when Faisal named the startups his fund had backed. His own thesis runs through demographics: ageing populations in Europe and Japan, rising anti-immigration sentiment, and AI making remote digital work portable to the global South. Pakistan can’t build hard industries quickly, but it has five million children turning eighteen every year. Educate them, connect them to the real economy, and you raise the country’s bottom-line dollar. Karim, by contrast, he treats as consumption-driven and margin-poor in Pakistan. Education credit is one of the few models he sees as genuinely part of the funnel that grows the economy.

How Edufy actually decides who to lend to

Edufy is short for education finance, and the model is direct: students who want to attend college download the app and receive a subsidised loan, repaid in monthly installments. Nadeem is targeting the gap in a market she sizes at $30 billion — students who complete a $17 billion private-sector schooling layer and then drop off before higher education for lack of money. In two years the company has signed roughly 20 colleges, mostly medical, and onboarded around 200,000 students. When demand clusters at a college not yet on the platform, Edufy reverse-engineers it, approaching the institution with a list of students who want in.

Lending, she stresses, is not a demand problem. “It’s not a demand-efficient business” — the constraint is supply, which the $6 million raise is meant to solve. The harder question Muzamil presses is default. Her answer rests on a behavioural bet: education is a priority payment. In a survey across the 200,000 students, 30 to 35% said they would use a credit product, yet most already pay their fees somehow. They are capital-constrained, not defaulters. Families will default on a car before they default on a child’s degree.

The credit engine is where she leans on her background. Edufy runs algorithms directly on applicants’ bank statements to assess ability to pay, partnering with Adlafy — a credit-scoring startup led by TechLogix CEO Salman Akhtar — on that side. On the education side, the company’s ERP systems are plugged into colleges in real time, pulling dropout rates, GPA, degree hardness, and accounting for students who transfer laterally from weaker colleges to better ones. The thesis is plain: if someone has the ability to pay, they will pay for education. Muzamil pushes her on the limits — medical colleges are the top of the pyramid, and the real impact lies in the peripheral, data-poor institutions where the middle and lower-middle class actually sit. Nadeem doesn’t dispute it; the credit-scoring machinery is precisely what’s meant to let the model reach further down.

Owning the tech, and why so much Pakistani fintech didn’t

The conversation turns to why Pakistan, despite an early head start with Easypaisa, never produced an M-Pesa or a Paytm. Nadeem’s first answer is capital — playing the field with one arm behind your back. India had massive access to it; Pakistan, with a down economy and geopolitical drag, didn’t. She names strong founders in the space and insists the talent is real.

Muzamil adds a second answer rooted in how the sector grew up. Early Pakistani fintech was often telco-led, run the way telecoms run marketing — get a product built by a third-party vendor, then market it heavily. He tells the story of his own Easypaisa account that wouldn’t open for years; insiders told him the vendor had built it and they were locked out, unable to fix their own product. The lesson he draws is that a technology company has to own its technology. Nadeem agrees, but widens the frame. Tech matters for two structural reasons: it bends the cost curve so customer acquisition cost falls as you scale — the hockey stick that traditional, inventory-bound businesses can’t produce — and it builds a competitive moat, because genuine systems take a year or more to replicate. Edufy’s college integration took two years to build.

She and Muzamil spend a long stretch on a tempting idea — letting retail investors fund student loans directly, lowering the cost of capital and the rate students pay. Nadeem keeps it grounded. Edufy already does co-borrowing, with synced parent and child portals on the same loan, and runs a scholarship plan. But she resists the urge to chase everything at once, which she names as the number-one mistake early-stage startups make. Her KPI now is simpler: a loan book good enough that a student in an airport lounge tells a friend they financed their education through Edufy. “Your consumer should be your marketer.” When that works, she says, the market — not a slide deck full of remittance buzzwords — will tell her what to build next.

Pakistan in 2050, with the ifs left in

Asked the closing question every guest gets — where is Pakistan in 2050 — Nadeem refuses to strip out the conditions. The country’s future, she argues, turns on whether corruption changes and whether the informal sector formalises. Eighty percent of the economy sits informal; only 20% is formal, and tech plays only in the formal space. She zooms out first: this is a global cycle, not a Pakistani anomaly — rates rose, money left the markets, a tech crash followed worldwide, and Pakistan was a symptom rather than an exception. She expects a bounce back by the second quarter of 2024.

She nods to the Goldman Sachs projection that put Pakistan among the world’s largest economies by 2075, but she won’t lean on the demographic-dividend cliché; a young population is a variable that can break either way. Her own contribution is narrower and more concrete. Reduce the brain drain, raise the literacy rate, inject capital into the middle class — and do her part by educating as many people as she can. The model only works, in the end, because the demand was already there.