Launch Lahore-based coworking space, Colabs, is set to deploy a SaaS product to enable businesses to meet back-office needs including company registration, talent management and search, payroll processing, legal compliance and tax. It also plans to hire more staff, including increasing the product pool for its growing SaaS workspace business service from beta.
The new plans come after the startup won $3 million in seed funding in a round led by Indus Valley Capital, Zayn Capital and Fatima Gobi Ventures, the first of three Pakistan-focused VCs jointly invest in a startup.
Colabs co-founder and CEO Omar Shah, a former investment banking executive, told TechCrunch, ‘We realized that people setting up operations in Pakistan needed other services; they need help setting up a company, processing payroll and ensuring tax compliance. That is why we introduced our business solutions”.
“Our plan is to reach 600 paying customers in the next 12 months and from there we will bring this product to market,” says Shah.
Mr. Shah and his twin brother Ali Shah co-founded Colabs as a collaborative outfit for start-up entrepreneurs and multinational companies setting up hubs in Pakistan. This is in 2019, and they are inspired by the thriving startup ecosystem and cutting-edge tech space in the country.
Before founding Colabs, Mr. Shah worked in private equity for about eight years, with his last assignment at Abraaj Capital, before he teamed up with his brother, who runs the development company. Longstanding family-run real estate and development, to boot. Family owned real estate company that develops the Colabs space.
National expansion plan
The startup has more than 100 companies with a total of 1,200 employees at its three locations in Lahore. It plans to open 100,000 seats across the country over the next five years and expand nationally to major cities, including Islamabad and Karachi.
“The idea of Colabs was to create spaces around the country where we could serve freelancers, startups, SMEs and large enterprises. It is a community for anyone who wants to establish their career or a company or wants to enter the country. Colabs will support them on their journey. We want to be the gateway to Pakistan,” said Shah.
“Our growth plan is very ambitious. But we saw a demand for what we were offering because by the time we opened the new space, they were already sold out. And this is because a lot of companies are entering this country. And a lot of startups here are raising capital and want to be inside a space like ours, instead of investing in their own campus,” he said.
The rise of flexible working locations has also grown in the wake of Covid as many companies reduce costs associated with operating proprietary physical locations. These coworking spaces like Colabs, which also host events, are important for networking, learning or meeting potential investors or clients.
According to the Shah, the increase care in Pakistan by big investors like Tiger Global which means the growth of the country’s startup ecosystem will continue, increasing demand for spaces like Colabs. Investments in Pakistan increased more than fivefold last year to $350 million from $65 million in 2021 amid a fintech and e-commerce boom.
Colabs’ new funding brings the startup’s total raised to $4 million, including capital from an unannounced prequalification round.
“We are delighted to partner with the Colabs team to help them build the leading platform and community that will drive the growth of the company,” said Aatif Awan, Founder and Managing Partner of Indus Valley Capital. Pakistani technology on startups, freelancers and global companies expanding into Pakistan. ”
The seed round involved Shorooq Partners, Kinnow Capital, Muir Capital, Sai Ventures, and several key angels, including Turner Novak, William Hockey, and Teddy Himler.
Zayn Capital co-founder and managing partner Faisal Aftab said, “I have been closely watching Colabs grow into one of the key players in Pakistan’s startup ecosystem. We are fortunate enough to meet some of the startups we invest in, in their space. ”