Endeavor to make unicorn a reality in Pakistan’s startup world

Morning! With those batting-friendly pitches in this year’s Rawalpindi's T20 Pakistan Super League, we're starting to think that a bowler's only job is to pick up the ball after it's been whacked out of the park (seriously, who is looking after these pitches?).

In this week’s edition:

🏦 The hows, whys, what nows in the SVB chaos

📋 All about Pak’s 2023’s Taxpayers' Satisfaction Survey

🐦 Meta’s hunt for the bird

🦄 Endeavor’s vision for a unicorn in Pak

- The Itla Squad 💼

Business

Global 🌎️

SVB Chaos: When sh*t goes down, it goes down in billions…

Last week was just another day where people, who we thought of as geniuses, showed that none of us really know what we are doing. On Friday, SVB Financial Group (SIVB.O), a lender focused on startups, suffered a sudden collapse, making it the largest bank to fail since the 2008 financial crisis. The fallout was felt worldwide, causing turbulence in global markets and leaving countless companies and investors with billions of dollars in losses.

Backing up: What is SVB? Before it was known as a club for the super cool, nerd tech-bros, SVB (Silicon Valley Bank) was created to be a bank for the growing tech industry in the area. Fast forward to today, and the bank has become a crucial component of the financial infrastructure of the tech industry and serves almost half of all US venture-backed startups, well, at least until.. last week.

What went down? The reason is as basic as they come: a classic bank run. Recently, the bank had been investing deposits in safe securities, but the bonds became less valuable as interest rates increased. Moreover, the slowdown in the tech sector caused customers to withdraw their deposits. Its parent company's $21 billion securities sale resulted in a $2 billion loss, alarming clients and markets. SVB Financial's stock price took a plunge on Thursday, and trading stopped on Friday. Reports suggested SVB is seeking a buyer, and panic spread like wildfire as investors started advising their companies to withdraw their funds.

Should you be running to your bank and hiding your money under the mattress? According to Aaron Klein, a senior economics fellow, there is always a risk of contagion when it comes to banking, as it is essentially a game of trust and confidence. However, experts claim that no one really knows what to expect. But it would probably be too early to panic about your money sitting in the bank.

TLDR: Startup lender SVB Financial Group's collapse caused market turbulence and billions in losses last week. Its investments in safe securities decreased in value as interest rates rose, and customer withdrawals compounded the problem. Experts warn of contagion risk in banking, but it's too early to withdraw funds from personal bank accounts.

What else is new in news

✶ While industries in Pakistan are forced to shut down, India saw a 5.2% year-on-year increase in January’s industrial output.

Local 🇵🇰

Businesses to accountants in tax filing: Thanks, but no thanks

The Federal Board of Revenue (FBR) conducted a Taxpayers' Satisfaction Survey in 2023, which revealed an interesting finding: 53% of businesses and companies filed their annual income tax returns on their own without seeking assistance from external accountants, chartered accountants, or tax lawyers.

What else did the survey reveal? One significant part of the survey aimed to evaluate businesses' interactions with the FBR and revealed that 38% of businesses from all sectors had engaged with the FBR, while 54% of the businesses surveyed claimed that they had never had any interaction with the FBR.

Why does the survey matter? One of the main objectives of conducting the survey was to gain insights into improving the quality of service and products offered by inland revenue services to taxpayers.

Big picture: A simplified tax process can benefit a country's economy by increasing tax compliance and revenue collection, reducing the administrative burden on taxpayers and businesses, and improving transparency and accountability. This can lead to increased productivity, innovation, and entrepreneurship, driving economic growth and job creation.

TLDR: The 2023 Taxpayers' Satisfaction Survey by FBR found that 53% of businesses and companies filed their annual income tax returns without help from external professionals.

News Flash

✶Pakistan's wheat production is predicted to fall short of the targeted goal of 28.4 million tonnes, with an estimated production of around 26.7 million tonnes.

Tech

Global 🌎️

Meta is on a bird hunt

We almost feel bad for Twitter. Rather than standing idly by as Twitter struggles, Meta, the parent company of Facebook, is reportedly developing a text-focused social media platform based on the decentralized technology of Mastodon, a popular platform in the Fediverse network, to compete with Twitter.

Breaking it down: Fediverse is a term used to describe a network of decentralized social media platforms. Mastodon is one of the popular social media platforms in the Fediverse network where users can interact with other users on other Fediverse platforms, creating a broader, more diverse social media experience. Moreover, Mastodon's decentralized nature means that there is no central authority controlling the platform or user data, and users have greater control over their data and privacy.

What the new “Twitter” will be like? Reportedly called "P92" internally, Meta’s new app could potentially be Instagram-branded and accessible through the app. According to Moneycontrol, the existence of the project was revealed by insiders and an internal product brief. Meta did not deny the report, saying in a statement that it's working on a decentralized social network for sharing text updates, creating a separate space for creators and public figures.

Looking ahead: It won’t be easy for Meta to win this fight regardless of rainy times on Twitter. Twitter's still standing strong, with 450 million monthly active users. Mastodon's estimated 2.6 million monthly users may as well be a drop in the ocean. It will be interesting to see if Meta can turn the tide.

TLDR: Meta, the parent company of Facebook, is reportedly developing a text-focused social media platform based on Mastodon's decentralized technology to compete with Twitter. Mastodon is a popular social media platform in the Fediverse network, which allows users to interact with other platforms.

What else is new in news

✶Apple takes a classical turn with new classical music app and it's set to hit the ground running with impressive five million distinct tracks.

Local 🇵🇰

Endeavor to make unicorn a reality in Pakistan’s startup world

In these times of economic meltdowns in Pakistan, if there’s one person who is hopeful about Pakistan’s startup ecosystem, it’s …. a white guy named Taylor? Yep.

What happened? Endeavor, a global prestigious non-profit organization that supports and accelerates high-impact entrepreneurs by connecting them with talent and capital, launched in Pakistan last week. Allen Kinsey Taylor, Endeavor Catalyst Managing Partner, said on the launch that Pakistan can produce a unicorn by 2025. Pakistan, the fifth most populous country, is yet to produce a unicorn, which refers to a high-growth company valued at one billion dollars or more.

Big picture: According to reports, startups in Pakistan raised $366 million in 2021, with $172 million invested in the first quarter of 2022. However, investment dropped to $15 million in the last quarter, resulting in a total of $347 million. The decrease might have little to do with the economic situation of Pakistan as global interest rates have risen, making venture capitalists less interested in emerging or frontier markets like Pakistan.

Looking ahead: Endeavor has picked Abhi, Sadapay, and Bazaar for funding, with five more in the process and nearly 100 in the pipeline.

TLDR: Endeavor, global non-profit supporting entrepreneurs, launched in Pakistan and aims to produce a unicorn by 2025. Startups raised $366m in 2021 but investment dropped in Q4 due to high global interest rates.

Tech tour of news

✶ The National Highways and Motorway Police (NHMP) announced plans to install an Intelligent Transport System (ITS) to revolutionize the process of issuing challans on Pakistan's national highways and motorways.

More interesting Itla (اطلاع) we consumed:

📽 “Avatar 2: The Way of Water” just won an Oscar for the best movie in Visual Effects and we are not surprised. If you're curious about how they brought those creatures to life, you gotta check out the Vanity Fair video featuring Dan Barrett as he takes us through his brilliant process for animating the Na'vi that will leave you in awe.

📺 If you want to avoid losing your hard-earned cash, you need to check out Hasan Minhaj's clip from “The Daily Show”. In it, he offers an insightful and empathetic perspective on why regular folks shouldn't trust investment advice from TV personalities.