Harmonizing People, Processes & Technology
This is how Karandaaz Pakistan enabled Techlogix, a technology-based company in Pakistan to expand in terms of staff, products, and service portfolio.
Technology is known as the key to accelerate growth in the South Asia. Particularly because the market has potential and is extremely competitive but also because of immense talent and potential in the youth. Hence, the past two decades have seen a plethora of technology-based companies starting operations in the region. Techlogix is one such IT services company that started over twenty years ago when Salman Akhtar and Kewan Khwaja graduated from Massachusetts Institute of Technology (MIT) and decided to take the entrepreneurial route.
As students of Information Systems and Electrical Engineering, they could not imagine themselves as entrepreneurs. Upon graduating, they realised they still craved challenges. In order to satiate that thirst and to focus on building quality and technologically challenging products, Salman and Kewan started an IT based company, which eventually grew into Techlogix. Salman laughs as he recalls how the initial capital was raised
One of our friends convinced his father to invest $100,000 in the company simply because we were his friends
The company that began as an IT services company has come a long way in the past twenty years. From developing softwares to implementing packet software that already exists, Techlogix was delivering exactly what their clients required. For over 10 years, Techlogix worked in the education industry and became Oracle’s largest partner in implementing people soft campus solutions, a product that is used to run the operations of universities and colleges. This experience and working in that space for a significant time enabled Techlogix to have a clear idea of what a world-class product should look like. Inevitably, the company started eyeing new product development.
For an IT/technology based company to really do well, it needs to grow, expand and innovate in terms of developing new products that could attract customers from the market. Developing new products, however, is a process that is easier said than done. On paper it sounds interesting and exciting, in reality it is a long and challenging process that is not just time consuming but extremely cost intensive too.
Developing new products means experimenting, making mistakes, starting afresh, investing resources, wasting some of them and yet never stopping. But once Techlogix had its eyes on new product development that was the only way to go forward for the company.
Two major changes in the technological world in the last five years encouraged the company to build its own products. One of these was the shift to cloud computing, which means that servers are run on the cloud and the other was the advent of machine learning or artificial intelligence, which allows one to do predictive analytics that were impossible to do before.
Techlogix saw this as an opportunity to rethink what the educational product should be like in the new technological space. While the first round of capital came from Techlogix itself, when even more capital was required, the company looked at Karandaaz.
Karandaaz Pakistan understands the potential of technological and IT service companies and is working to promote access to finance for businesses through a commercially directed investment platform, and financial inclusion for individuals by employing technology-enabled solutions. These solutions include Karandaaz Capital, which provides wholesale structured credit and equity-linked direct capital investments to micro, small and medium -sized enterprises (MSMEs) that demonstrate compelling prospects for sustainable business growth and employment generation in Pakistan.
Salman agrees that raising capital and investment for expansion is difficult in Pakistan.
Microfinance institutions will lend up to Rs. 300,000 to Rs. 400,000. Banks will give a personal loan of up to perhaps Rs. 1,500,000. Beyond that, one can’t get capital without collateral. In Pakistan, there is no lender in that space that would give a significant amount without collateral. It’s a great opportunity for someone to come in
In a scenario like this, the direct equity investment from Karandaaz was monumental for Techlogix’s growth in developing new products.
While Salman values the contribution Karandaaz made, he also firmly believes that the new products need to have their own independent success or failure. If it’s a good product, people should be willing to pay for it and it has to financially sustain itself.
The test of the success of a product is that the company is able to make money off it. However, product development is a long cycle – investment is required for many years of testing, innovations and rebuilding
The products Techlogix developed once the equity investment from Karandaaz was secured are in the education space and enterprise mobility. This investment came at a crucial time because the growth could have slowed down without it. In terms of tangible expansion, the Karandaaz investment allowed Techlogix to accelerate the growth path – from 25 people working on the two product ventures to 90 people employed today specifically for these new products. Growth in terms of customers has also significantly grown. Before the investment, the company had 2 customers for these products. Now they have over 60 customers. This speaks volumes about how more people are being hired, employment is being created and better working conditions and benefits are delivered to the workforce.
Mehreen Baddar who works at Techlogix looks at the investment from Karandaaz as great news for the employees too.
The investment has given employees the confidence that they can experiment and develop new products. It has motivated us to work harder, deliver more and go further ahead so we can prove ourselves to the world and not just excel in Pakistan
Mehreen’s views are similar to those of the three hundred and sixty other employees who work at Techlogix today. The company is doing business not only in Pakistan and United States but also in Dubai, Bahrian, Qatar, Saudi, Lebanon, Jordan, Malaysia and several countries in Africa. With the new products being developed with the investment from Karandaaz, this is just the beginning for further expansion that will help Pakistan’s economy, increase employment, and make a positive impact on the community encouraging more young people to take the entrepreneurial path and follow their passions.