.
Global VC sees potential in Pakistan

By Saad Hasan

KARACHI: After pioneering global venture capital investments and overseeing transformation of his portfolio companies from little known to multi-billion dollar firms, Asad Jamal, the founder CEO and Chairman of ePlanet Ventures, is planning to bank on innovation in his own country - Pakistan. His conviction in financing ideas of young entrepreneurs in emerging markets from a consolidated global fund at a time when most venture capitalists (VCs) invested every last penny in the US had paid off handsomely, earning ePlanet the title of top VC fund for the year 1999.

In late nineties amidst the dotcom boom, Jamal joined hands with Draper Fisher Jurvetson and created DFJ ePlanet in California, US, with two-point theses of transferring technology and helping fresh graduates and outstanding entrepreneurs in Europe and Asia set up their own companies. “To do that we had to open a global firm,” Jamal, 47, said in an interview with The News during a recent trip to his hometown Karachi. “As it turned out, we were the only firm operating out of one fund globally!” This worldwide reach proved to be a saviour for ePlanet a few years later as the information technology bubble burst with many funds finding themselves under water, unable to recover even the startup investment from their portfolio companies.

“When the US market completely collapsed, I asked my team to freeze everything. I told them it’s okay if they could not find opportunities in their (target) countries,” he said and added with a triumphant smile: “That was when we heavily got into the Chinese market.” In 2003, the main tech-heavy US stock index Nasdaq crashed, trapping the saturated investments of many VCs. But Jamal’s ePlanet remained unaffected by this downturn as having a single global fund allowed the firm to invest in other markets. “Some other firms were also operating globally,” he said, “but they had a separate fund for each country whereas in our case we had one fund, one team and profit was shared by all.”

Operating from a single fund created better transcontinental connection between the team members who constantly shared ideas and information on latest developments taking place. It also helped to better guide the clients (portfolio companies) in cutting-edge technologies and new innovations something which has really turned out to be rewarding for Jamal and his limited partners in case of Robin Li’s BAIDU - the Google of China. BAIDU went public on Aug 5, 2005 at $27 a share. By the end of trading day, shares of Baidu closed at $122, up 352 per cent, the biggest opening on Nasdaq since the dotcom peak in 2000. It instantly became a $4bn company. ePlanet’s first fund of $650 million financed 72 companies of which only three Baidu, Skype, a voice over internet protocol (VoIP) service provider and Focus Media, the Chinese flat-screen delivery commercial advertiser had become worth over $10bn in shareholder value.

It invested in Skype and Focus Media when they were valued at around $85m and $60m respectively. In 2005, eBay acquired Skype for $4.1bn and Focus Media became a $4bn company via Nasdaq listing. ePlanet has a share of $1bn in the total $10bn shareholder value of these three companies. In aggregate, the fund had invested only $26m in the three firms. Ranked by Forbes as the 12th top VCs of the world, Jamal, the only Pakistani and Muslim on the list, intends to open up an office in Karachi in next 12 months. He equates economic growth with exploiting the potential of youth, failing which would “make rich richer and poor poorer.”

“I believe Pakistan has a huge potential,” he says and adds: “Pakistani entrepreneurs are second to none. The only problem is lack of capital.” Unlike micro-credit that goes out to a large number of entrepreneurs, a VC finances the best ideas, which as a result, if successful, creates a lot of employment, he said pointing out that in developing countries multiple industries hold the potential for growth. “I can’t possibly finance a wireless service provider because it requires investment of hundreds of millions of dollars and there are already established players in the market,” he said about the outlook of Pakistan from a VC’s eye. “But I’ll finance the person who comes up and says he can provide value-added wireless service.”

link http://www.thenews.com.pk/daily_detail.asp?id=51695
.

welcome to pakistan

Bien venue .. now you see more overseas based Pakistani's are on the return to back home .. which means our economy is set to turn more upwards. ...