What is KTrade (KASB), who is it for, and what problem are you solving for them?
KTrade is a digital platform which allows Pakistanis to better manage their savings by investing in equities, commodities, and mutual funds.
Pakistan has high inflation, but most people put their savings under their mattresses or in low yielding assets such as gold or bank accounts. They don’t have access to financial products, information, and education. We are solving this problem by providing them with access to financial markets.
How and why did you come to found KTrade (KASB)?
I was previously the CFO of SafeCharge in the UK, where I had invested in companies such as FlatexDegiro in Germany and worked with online brokers in Europe. I wanted to bring such products to Pakistan since it’s a large market with low financial penetration.
What do you see to be the main advantages and disadvantages of founding and growing a ‘frontier’ business?
The primary advantage is that it is a greenfield opportunity, and the first movers have the advantage. We have also received strong regulatory support as we are enabling the whole eco-system. The disadvantage is related to this. Since it is all new, it requires greater effort in building the whole eco-system, including regulation and the tech rails.
How does KTrade (KASB) compare to similar companies operating in developed markets?
We are similar to SBI in Japan, XP in Brazil, Groww in India, Avanza in Sweden, and FlatexDegiro in Germany. Robinhood is a similar company, but they possess some conflict of interests, which we don’t have. We don’t sell order flows to institutional investors.
What is the key to successfully managing a large team in a frontier market?
This is perhaps the biggest challenge. The quality of talent is not of the same standard since they have not been trained in the same way. Thusly, it requires greater investment in setting up HR and training processes in order to import the best practices from developed countries.
If you could give young entrepreneurs in frontier markets one piece of business advice, what would it be?
Plan for the long run and prepare for business cycles.
What is the most important source of value-add (aside from capital) you seek from an equity investor?
A lot of our investors are also clients. They want to support us in building this fintech eco-system. So essentially, the investors become a part of this symbiotic enabling network and are collaborating to build a digital Pakistan.