In emerging markets, the trajectory of the burgeoning digital economy often relies heavily on the initiative and investment of large corporate entities. Unlike developed economies such as the US or Europe, where the ecosystem has established roots, emerging markets frequently require major corporates to step into a more significant role—acting almost as the “godfathers” or “uncles” of the ecosystem, especially when government agencies might be less reactive or lack the necessary resources to drive rapid growth. This reality turns corporate innovation from a strategic advantage into an absolute necessity, as organizations that fail to innovate risk obsolescence.
In our discussion with Cynia Ejaz – Head of Innovation where she shared The experience of Telenor Pakistan, providing a compelling blueprint for how a corporate giant can take ecosystem building to heart, creating a powerful win-win situation that fosters startup growth while simultaneously securing its own position at the edge of innovation.
The Corporate Imperative – A Visionary Shift
For large organizations like Telenor, innovation is crucial for survival. As vast companies grow, they often face challenges related to slower decision-making processes and the difficulty of initiating change. For Telenor, the trigger for deep engagement with the startup scene was a recognition in 2016 that a “fresh mindset” was needed to anticipate and meet future demands. This visionary approach led to the organization becoming spokespersons for the idea that they needed to collaborate with startups.
In emerging markets, the single most critical asset that corporates can offer startups is access to market. In Pakistan, where funding, particularly pre-seed investment, is often lacking, gaining traction is paramount. Telenor manages a vast customer base, totaling 44 million users, including approximately 12 million farmers. Furthermore, its digital platforms, such as the Telenor App, boast around 20 million users. This existing infrastructure represents an unparalleled opportunity for startups to test, validate, and scale their products.
Telenor Velocity: A Model for Agile Acceleration
Telenor operationalized its commitment to the ecosystem by establishing Telenor Velocity in 2016, the first corporate startup accelerator in Pakistan. The primary goal was to collaborate with external startups to develop new services and solve problems for their enormous customer base.
Telenor Velocity operates not as a venture capital (VC) fund, as the company does not provide direct investment. Instead, it offers extensive in-kind support that can be valued at thousands of dollars. This support includes providing access to Telenor’s internal experts in crucial areas such as UI/UX, data analytics, marketing, PR, and technology.
The accelerator’s integration criteria are rigorous, typically requiring startups to be operating for three to five years, ensuring they have already validated their product-market fit and are ready to handle the scale provided by Telenor’s market. The resilience and mindset of the founders are also scrutinized, mirroring the evaluation process used by investors.
The program is deliberately designed to be highly agile and need-based, acknowledging that founders are busy running their businesses. Instead of mandatory sessions or meetings, Telenor focuses on understanding the startups’ needs, connecting them immediately to the right internal departments, and offering a “handholding” process to ensure effective collaboration. This relationship is often described as a “marriage,” requiring both the agile startup culture and the more structured corporate environment to adapt and understand each other.
The Mutual Benefit – A Win-Win Dynamic
The corporate-startup engagement generates substantial value for both parties, resulting in robust mutual growth.
1. The Startup Gain: Scale and Credibility
For startups, Telenor Velocity provides essential credibility and the traction needed to attract further investment.
• Traction and Investment: By achieving impressive customer numbers and scale through Telenor’s network, startups gain crucial metrics to present to investors. For instance, Digi Khata, a ledger book app, was integrated into Telenor’s Apollo system, gaining access to the company’s network of approximately 200,000 retailers, enabling massive scale before they formally raised investment.
• Expert Support: Startups receive comprehensive support from various Telenor departments (B2B, tech, marketing, customer engagement), guiding them through the complexities of scaling their business. Sehat Kahani, a health app, is another success story from the acceleration program.
2. The Corporate Gain: Agility and Innovation Edge
For Telenor, working with startups ensures it stays ahead of the innovation curve, mitigating the inherent risks of corporate stagnation.
• Internal Product Development: The collaboration fosters internal innovation, helping Telenor build new digital products and platforms, particularly in core verticals like agri-tech (where they serve 12 million farmers) and health-tech.
• Agile Experimentation: The accelerator model allows Telenor to run focused pilot tests (which can last 6-8 months) to gauge customer response. If the pilot demonstrates a good model, they proceed to a commercial agreement, often involving a revenue share. The primary Key Performance Indicators (KPIs) for the accelerator are the successful pilot launch and the subsequent commercial agreement. This focused, results-driven process ensures that the acceleration efforts align with Telenor’s business interests.
• Quality Assurance: Telenor ensures that product launches are done correctly, even if it requires pausing and investing time and resources to refine the user experience (UX/UI) for different customer segments, ultimately ensuring a strong market entry for the startup and a better service for Telenor’s customers.
Beyond Acceleration- Driving Policy and Partnerships
Telenor’s commitment extends beyond its own accelerator program; the company plays a crucial role in strengthening the overall market infrastructure. Telenor believes that large organizations cannot work in isolation, emphasizing that Public-Private Partnerships (PPP) are the way forward for propelling the digital economy.
Telenor is a founding partner in the National Incubation Center (NIC) Islamabad consortium, working alongside major Pakistani organizations like Hashu (hospitality) and Fauji. This collaboration ensures that startups joining the NIC receive comprehensive support from different industry giants.
Crucially, Telenor is actively engaged in regulatory reform. The company, alongside STZA (Special Technology Zone Enterprises) and I2I, established a tripartite arrangement to tackle the significant funding gap facing the ecosystem. By leveraging their access to government and legal expertise, they are working on a policy brief document aimed at advocating for regulatory frameworks that will attract foreign investment and make the system less “hostile” for investors and businesses. The ability of corporates to access government officials and advocate for necessary changes is a vital contribution to national digital maturity.
Addressing Systemic Challenges and the Call for Collaboration
Despite these advancements, the ecosystem faces several hurdles, which Telenor addresses through targeted initiatives.
One major concern is the brain drain, where both professional talent and startup founders are leaving Pakistan, often using the startup route to gain exposure abroad, which does not benefit the local economy. Furthermore, there is a recognized gender disparity, with few women entrepreneurs having successfully raised funding in recent years. Telenor addresses this through its NIA program, designed to help women who have paused their careers for family reasons re-enter the workforce by offering flexible hours and a supportive environment.
Finally, given the young and small nature of the Pakistani ecosystem (around 10 years old), Telenor champions the necessity of collaboration over competition among corporates. Corporates must avoid working in silos and instead share knowledge and journeys to educate other organizations on effective engagement. The goal must be to exchange notes and support startups based on genuine interest, ensuring that every contributor brings their “brick” to build the ecosystem together.
The Telenor Pakistan model provides a potent example of how corporate innovation, coupled with a commitment to ecosystem development and policy reform, is essential in emerging markets. By providing market access and in-kind resources, corporates accelerate startup success, ensuring their own agility and future readiness, thereby turning their vast resources into a dynamic catalyst for the entire digital economy.