Lahore-based coworking space start-up Colabs will launch a SaaS product to help businesses meet back-office needs including business registration, talent sourcing and management, payroll, and legal and tax compliance. It also has plans to hire more staff, including expanding the product team for its SaaS workspace business service emerging from beta.
The new plans come after the startup secured $3 million in seed funding in a round led by Indus Valley Capital, Zayn Capital and Fatima Gobi Ventures, the first time the three Pakistan-focused VCs have invest together in a startup.
Omar Shah, co-founder and CEO of Colabs, a former investment banker, told TechCrunch, “We realized that people building businesses in Pakistan needed different services; They need help starting businesses, processing payroll, and ensuring tax compliance. That’s why we introduced our business solutions.”
“Our plan is to reach 600 paying customers over the next 12 months and from there we will launch this product,” Shah said.
Mr Shah and his twin brother Ali Shah co-founded Colabs as a co-working outfit for entrepreneurs setting up businesses and multinationals setting up hubs in Pakistan. It was 2019 and they were inspired by the thriving startup ecosystem and advancing tech space in the country.
Prior to founding Colabs, Mr. Shah worked in the private equity sector for approximately eight years, most recently at Abraaj Capital before working with his brother, who runs long-established family-run real estate and development company SABCON, to found the startup. Family-run real estate company develops Colabs spaces.
The startup is home to over 100 companies with a total of 1,200 employees at its three locations in Lahore. It plans to open 100,000 seats nationwide over the next five years as part of a nationwide expansion into major cities including Islamabad and Karachi.
“The idea of Colabs is to create spaces across the country where we can serve freelancers, start-ups, SMEs and large companies. It is a community for anyone who wants to start their career, a business or enter the country. Colabs will support you on your way. We want to become that gateway to Pakistan,” Shah said.
“Our growth plan is very ambitious. But we see a demand for our offer because when we open our new rooms, they are already sold out. And that’s because so many companies are entering the country. And so many startups here who want to raise capital and be in spaces like ours rather than investing in their own campuses,” he said.
The rise of flexible workspaces has also increased post-Covid as more companies reduce the overheads associated with running exclusive physical locations. These coworking spaces like Colabs also host events that are important for networking, learning, or meeting potential investors or clients.
Shah said rising interest in Pakistan from big investors like Tiger Global and Sequoia means the country’s startup ecosystem will continue to grow and demand for spaces like Colabs will increase. Investments in Pakistan grew more than fivefold last year to $350 million from $65 million in 2021 on a fintech and e-commerce boom.
Colabs’ new funding brings the total amount the startup is raising to $4 million, including capital from an unannounced pre-seed round.
Aatif Awan, Founder and Managing Partner of Indus Valley Capital, said: “We are very excited to be working with the Colabs team to help them build the leading platform and community driving the growth of Pakistani tech across startups, freelancers and… global companies that are expanding across Pakistan.”
The seed round was joined by Shorooq Partners, Kinnow Capital, Muir Capital, Sai Ventures and a few key angels including Turner Novak, William Hockey and Teddy Himler.
Faisal Aftab, Co-Founder and Managing Partner of Zayn Capital, said: “I have watched closely as Colabs has grown into one of the key players in Pakistan’s startup ecosystem. We were fortunate to have met some of the startups we have invested in at their premises.”