Why Pakistan's startup boom is a watershed, not a victory lap

A watershed moment, measured in dollars

The episode opens with Muzamil welcoming back the Dastgyr co-founder for what he calls round two — a return appearance prompted by listener requests. The recap is brisk. Dastgyr is a B2B e-commerce company serving small kiryana retailers who, in Zohaib Ali’s framing, have been “essentially ignored by the traditional supply chain.” The company’s estimate is roughly two million such retailers in Pakistan, sitting outside the reach of distributors and manufacturers. Dastgyr offers them a marketplace, next-day delivery, and — newly — a buy-now-pay-later option.

Muzamil pivots quickly to the macro picture. The news cycle has been relentless: Dastgyr funded, Finja funded, Airlift funded, Tag funded before it even has a product. What is going on?

Zohaib does not flinch. “This is a watershed moment,” he says. He puts numbers on it. Pakistan’s annual FDI sits around $1.1 to $1.2 billion. In September 2021 alone, the country raised roughly $250 million in venture capital — a quarter of the year’s foreign direct investment in a single month. He calls it an inflection point, but is careful to credit the groundwork: years of regulatory work by the State Bank, the Careem exit as a regional signal, the steady accumulation of operators at Finja and Tajir, the four-G rollout, a population overwhelmingly under thirty. “The country is ripe to be digitised,” he says — commerce, finance, education, health, all of it.

Why fintech and B2B commerce, and not edtech

Muzamil pushes on a specific question. The venture money is not landing evenly. It is concentrating in two sectors: digitising retail, and fintech. Why not edtech, why not healthtech?

Zohaib’s answer is mechanical, not ideological. Founders come out of what he calls “academies of entrepreneurship.” Careem was that academy for the region. The PayPal mafia bought a generation of fintech companies into existence in the US; the Careem mafia is now doing the same across Pakistan and the Middle East. His own co-founder, he notes, came out of Careem’s early team with a small nest egg and a working knowledge of how to move people through a network. Moving goods, he says, is not that much of a stretch from moving people.

The second factor is market size. Pakistan’s banked population sits below twenty percent. Fintech, in his framing, is not a problem of evolving an existing customer — it is a problem of creating one. “The customer doesn’t even exist yet,” Muzamil offers, and Zohaib agrees. Retail commerce is a hundred-billion-dollar market by his estimate; even a hundred unicorns would not fill it.

Edtech, he predicts, will come — Noon Academy will eventually exit and seed its own diaspora of founders — but the order is set by where the talent and the deal economics already point.

The Careem mafia and the academy effect

Later in the discussion, Muzamil returns to the mafia idea and presses on what makes the network valuable. Zohaib is precise. It is partly capital — early Careem employees who exited with money to fund the next thing. But it is mostly skill transfer: people who learned how to operate a marketplace at scale and are now applying that operating template to adjacent problems.

He extends the same logic to the financial services veterans now launching fintechs. The traditional players — EasyPaisa, JazzCash — have shown what the demand looks like with what he calls “very basic tech” and the wrong user experience. The opportunity is sitting in the gaps the incumbents left.

The cautious-optimism case

The conversation’s most sober passage comes from Muzamil. He frames it as cautious optimism — a phrase he says he keeps returning to on the podcast. India and Bangladesh, he points out, climbed this curve incrementally. Pakistan’s curve is more vertical. The hockey stick is steeper because the country is starting from “absolutely nothing.”

That steepness cuts both ways. “If there are back-to-back failures,” Muzamil says, “suddenly Pakistan becomes branded for a generation as a country where you can’t do business.” The burden, he argues, is not on Dastgyr or Airlift or any individual company. It is on the entire ecosystem — government, regulators, talent pipeline, universities, corporates. “The world is not looking at these particular companies. They are looking at Pakistan.”

Zohaib agrees and turns the same point outward. The State Bank has been doing its part. The Special Technology Zones Authority is doing its part. But brain drain remains a problem — even funded startups offering above-market salaries lose engineers who do not want to live in the country — and the government has not yet built the narrative campaign that would reverse that flow. He references the chilling effect of a single high-profile arrest case on the expat community. “Nobody is going to take that risk,” Muzamil notes, “if that is what happens to someone who left their entire career to come back.”

Credit is the real product

If the conversation has a thesis, it is in this section. Muzamil walks the argument carefully. Pakistani banks, he says, failed at one specific thing: data. The world upgraded bank statements into credit infrastructure. Pakistan did not. The country has, by his count, essentially one credit bureau, and what it produces is redundant and disconnected.

So what is everyone actually building? “The underlying product that everybody is trying to build,” Muzamil says, “is a credit score.”

Zohaib confirms the framing without hesitation. “That’s exactly the value chain we are building.” Dastgyr’s marketplace generates data — wallet share, seasonal trends, buying behaviour, basket composition. That data goes to fintech partners whose algorithms produce a score. The score gates the buy-now-pay-later product. The lending is where the margin sits. “The lending is the game,” he says. “There’s a rev share there. That’s where we make our money.”

He gives a live readout. The lending product has just launched out of pilot. Default ratio is around 0.5%, which he calls the lowest in the industry. Average order value among credit users is roughly double. Retention, measured by users staying with Dastgyr for two months instead of two weeks, has lifted noticeably. The credit hypothesis is, for now, working.

He extends the same point to the consumer side. Airlift’s quick-commerce play will, on his read, produce the same kind of data on consumers that Dastgyr is producing on retailers. The exit point in both cases is financial services. SME enablement alone, he says, can add roughly ten billion dollars to Pakistan’s GDP, and lending with the right data is the biggest single lever.

The house you don’t have to wait thirty years for

Muzamil pauses the macro arc to make an unusually personal point. The Pakistani mentality, he says, is to save for thirty years, build a house, then leave it to children who start the cycle again. The reason the country cannot escape that loop is the absence of credit. With credit, you live in the house first and pay over time. Without it, you live in a worse environment for three decades to earn the right to live well.

The same logic, he argues, applies at the level of the economy. A youth bulge can either be employed by a strong economy or used to build one — and in Pakistan, only the second option is available. That requires extending trust to people who have not yet earned it on a balance sheet. Credit scoring, properly done, is the mechanism that lets a society identify which of those people will repay. Whoever builds that product, he says, will eventually accelerate the economy at an exponential rate.

Zohaib’s response is short and pointed. “There are very smart people working on this,” he says. “Far smarter than you or I.” Machine learning, real data, and a one-to-hundred score that can move by a single variable. The infrastructure is being assembled in real time.

The kiryana counter, and why boots stay on the ground

The conversation cools into operational detail. Muzamil asks the obvious question: how do you get a fifty-year-old shopkeeper, whose father and grandfather ran the same store the same way, to switch to an app?

Zohaib’s answer is honest. You do not do it remotely. Dastgyr keeps boots on the ground at exactly one step in the value chain — the retailer onboarding. A human walks into the store, runs a live demo, and explains the proposition. Many of these shopkeepers have never used a smartphone. The behavioural change is sold incentive-first: better prices, no need to chase a distributor, no need to leave the store to source a stockout from the wholesale market.

The interesting second-order effect, he notes, is that Dastgyr is essentially training a generation of small retailers to trust technology — which makes them ripe for the next wave of players. Healthtech, logistics, edtech, anything that needs to reach the same counter, will have an easier time because Dastgyr did the unglamorous work first.

The quick-commerce question

By the end of the conversation, Muzamil is asking the question he has been circling all hour: do the unit economics of quick commerce justify the valuations?

Zohaib is careful but candid. Quick commerce is a hot trend worldwide, beloved by VCs, replicating across every emerging market. The game is convenience, then data, then financial services on top. Whether it is sustainable is, in his words, an open question. “Worldwide what you see in quick commerce is mainly that it’s being subsidised using venture dollars.”

He uses Uber as a counter-example. Uber burns money on moonshots and ego-driven market entries it was never going to win — India and China. Careem, by contrast, is profitable, because prices have been raised and supply-side incentives reduced. He notes, almost in passing, that promo codes from Careem have effectively disappeared. The lesson generalises. Subsidy-driven user experience is not the same as a business model.

Airlift, he points out, is already hiring in Johannesburg. The $85 million round is not just a bet on Pakistan; it is a bet that the model travels. “If it works in South Africa as well,” he says, “that will be the real testament.”

Muzamil raises the obvious concern about Panda Mart and Airlift cutting kiryana stores out of the value chain entirely. Zohaib does not dismiss it. He frames Dastgyr’s own bet as the opposite trade — the only B2B player in the country, by his count, choosing a marketplace model over a warehouse model. Dastgyr warehouses roughly ten to fifteen percent of its SKUs; the rest moves via cross-docking, with goods arriving and leaving in the same window. Everyone in the chain — manufacturer, wholesaler, retailer — wins something. The data flows back. The lending follows the data.

Muzamil offers the comparison: Walmart. Zohaib corrects him. “Sir, we will be Amazon.” It is delivered as a joke, but it is also the company’s actual ambition.

Closing at the one-hour mark

By the end of the conversation, Muzamil reads the hour mark off the clock and closes with the framing he opened with. This is not a victory lap. It is an analysis — closer to a careful read than a critique. The people who worked hard and believed are now starting to get validated. The risk is real: a generation of brand damage if the early bets fail loudly. The opportunity is also real: Pakistan is, for the first time, on the global emerging-markets map for the right reasons.

He notes the physical landscape is already changing — Foodpanda riders and Careem bikes visible on every main road in a way they were not two years ago. The country’s commerce behaviour is being rewritten in real time. What happens in the next three years, on Zohaib’s read, will be unprecedented. Whether that ends in compounding success or a brand-damaging unwind depends on whether the ecosystem — not any single founder — delivers.