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Indus Valley Capital raises USD 17.5 million to invest in early-stage Pakistani startups

Written by MENAbytes Published on     5 mins read

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A stay in Pakistan inspired former LinkedIn executive Aatif Awan to form what is now the largest closed fund focused on the country.

Indus Valley Capital, a Pakistan-focused VC founded and led by former LinkedIn executive Aatif Awan, has raised USD 17.5 million for its maiden fund. The fund had a target size of USD 15 million and was oversubscribed with over 75 individual investors from around the world.

Awan had started IVC in early 2019, a year after leaving LinkedIn. He spent seven years at the company growing its member count to half a billion. As its VP of growth, international, and data products, he oversaw multiple strategic areas at the technology firm, including international expansion in markets like China, Germany, and Japan. He also led the product integrations between LinkedIn and Microsoft after Microsoft’s USD 26 billion acquisition of LinkedIn in 2016.

When he left LinkedIn, Awan considered different options for his next play in the Silicon Valley. He had taken a year off to travel and spend time with his parents in Pakistan. During his stay, he started meeting founders who were reaching out to seek advice on growing their products. After spending a few months in Pakistan, Awan realized that the country was on the verge of a once-in-a-lifetime transformation and decided that he wanted a role in growing its startup ecosystem.

That’s how Indus Valley Capital was born. Today, it is the largest closed fund focused on Pakistan.

The investors in IVC’s debut fund include Reddit’s co-founder Alexis Ohanian, as well as founders, executives, and operators from leading technology companies, including Facebook, Google, Stripe, Coinbase, Uber, Careem, Instacart, LinkedIn, Reddit, Dropbox, Atlassian, WebFlow, Zillow, and Oracle. Indus Valley Capital has not disclosed the names of other investors but has said that they include three unicorn founders.

Alexis Ohanian, commented on the occasion and said, “Aatif and I were first introduced on the board of Atoms, an innovative shoe company I invested in, started by two incredible Pakistani founders, Sidra Qasim and Waqas Ali. Through our shared passion for the brand, I learned about Aatif’s love of Pakistan and his plans to establish a fund that would nurture the country’s burgeoning startup ecosystem. Aatif is ahead of the curve and has positioned Indus Valley Capital at the forefront of what promises to be an exciting moment in the global investment landscape.”

“Partners at two multi-billion dollar VC funds and early investors in Careem and Souq are also among the limited partners,” noted IVC’s statement.

Indus Valley Capital’s strategy to raise money from technology and finance professionals is unusual, to say the least. Given the interest—with USD 2.5 million in oversubscribed capital—it seems to have paid off. The majority of first-time fund managers usually rely on family offices and development finance institutions for fundraising.

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Indus Valley Capital Fund I is sector-agnostic and invests in pre-seed, seed, and Series A startups. It has been active since early 2019 and has led or co-led investments in companies operating across different sectors, including transportation, logistics, B2B retail, fitness, fintech, and remote work. What stands out about IVC is that two of its portfolio companies have gone on to raise the largest seed and Series A rounds in Pakistan in follow-on funding.

Its first portfolio company, Airlift, had raised USD 12 million in a Series A led by First Round Capital, a US VC that was an early investor in companies like Uber, Square, and Notion. Airlift was First Round Capital’s only investment in Asia in a decade. The company, which operates a mass transit and logistics platform, had then raised another USD 10 million in an extension of its Series A.

Bazaar, a B2B e-commerce platform, raised USD 6.5 million in one of the largest seed rounds of the region, co-led by Global Founders Capital, in January this year. Indus Valley Capital wrote the first check for the company. It had led Bazaar’s USD 1.3 million pre-seed round in June 2020.

On average, Indus Valley Capital takes two weeks after the first pitch to share a term sheet with the startups it wants to invest in.

Explaining why they do that, Awan said, “Speed is a defining characteristic of startups that turn out to be rocketships. When we find a potential rocketship, we drop everything else and focus on wrapping up the fundraising process quickly, so the founders can get back to building the company.”

In addition to providing quick access to capital, the firm also helps its portfolio companies with product strategy and growth, as well as raising follow-on capital. This is where the network of operators and investors IVC has built as its limited partners is valuable.

“IVC connects founders with operators who have solved similar problems and scaled companies in their domains. It can also make intros to some of the best investors in the world through the extensive networks of its LP,” Awan said in a conversation with MENAbytes.

Usman Gul, the co-founder and CEO of Airlift, thinks that Indus Valley Capital is bringing a wave of venture capital that is aligned with the global venture playbook. “In our case, IVC has been a true partner in authoring the right fundraising strategy at every stage of the business, from early-stage angel financings to late-stage rounds.”

Saad Jangda, the co-founder of Bazaar, thinks of Awan as a friend and mentor. “In almost every conversation and decision, he has recommended what’s best for us and Bazaar, over something that benefits him or IVC. Even though it sounds very straightforward, it is something that’s very difficult to find in our ecosystem. Aatif’s founder-friendliness is the biggest highlight for us. He’s always a phone call away for anything that we need to talk about (or even rant, if needed).”

In one of his recent replies to a conversation on Twitter, Awan said that he was doing his best to be the VC he would’ve wanted if he was a startup founder. But being a VC is just a means to an end for him. “Our mission at Indus Valley Capital is to help founders build the most transformational companies in Pakistan, and turn Pakistan into one of the top five technology hubs globally in the process. Is that ambitious? Sure, and that’s why it’s worth doing this rather than simply being another VC in the Silicon Valley,” Awan said to MENAbytes.

This article was first published by MENAbytes.

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