Cyan Limited – a catalyst for entrepreneurial excellence
The absence of private equity has been sharply felt in Pakistan. However, in 2010, the emergence of Cyan Limited, a private equity company focused on providing growth capital to privately held companies, signaled a landmark development for Pakistan’s private sector.
Through the provision of capital and strategic guidance, Cyan Limited allows companies to realise their full revenue, profit and market-value potential. Recognising the importance of providing an alternate source of funding for companies, Samad Dawood, CEO Cyan Limited, Isfandiyar Shaheen and Shaharyar Ahmed, Co-Heads of Growth Equity Cyan Limited, talk to Blue Chip about how Cyan seeks to fulfill entrepreneurial aspirations in Pakistan.
Cyan is a part of the iconic Dawood Group. One of Pakistan’s leading business groups, the formidable Dawood Group covers a vast array of industries and sectors including foods, fertilizers, energy and technology. Samad Dawood explains the vision of Cyan, “There was a lot of latent information, social and intellectual capital residing in the Group and its various companies. The idea was that if we have talented entrepreneurs with potential who needed support and access to finance and markets – and we’ve got some of those elements already – we can just connect the two. We wanted the entrepreneurs to have access to the social and intellectual network of the Dawood Group.”
Samad Dawood explains how the Dawood Group was recalibrated in order to create Cyan. “We as a Group wanted to do private equity with a particular focus on growth equity, which is funding companies looking for capital to take their business to the next level. We were toying with the idea for the last three or four years as it was back in 2007 when we had started looking at this idea. We had reorganised the Group to create the capacity to take on these particular initiatives.”
He continues, “In 2010 we had an insurance company called Central Insurance which had been around for a long time and it had a sizable investment portfolio amounting to Rs 4.3 billion today. I was on the board of that company, the insurance operations of the company were really not sustainable moving forward. So we had this fantastic platform with an investment portfolio of Rs 3.8 billion. We thought, what can we do with this portfolio?” Consequently Cyan was formed using this portfolio.
Samad Dawood assumed control of Cyan in 2010. Soon after, he began building his team with Sulaiman Mehdi joining as Chief Operating Officer and company secretary, Isfandiyar Shaheen in June 2011 and Shaharyar Ahmed in April 2012.
With its unique combination of capital and experienced management skills drawn from the Dawood Group’s unparalleled expertise in investment banking, financial advisory and asset management, Cyan is ideally placed to nurture high potential companies through equity investment.
He talks about recent success stories, in particular, that of Inbox Business Technologies, a leading technology company which was able to bolster its profitability exponentially after receiving funding and operational guidance from Cyan. “We invested in Inbox back in 2005,” says Samad Dawood. “When they came to us they were a Rs 217 million company. We invested into Inbox and helped in changing the strategy of the company by focusing more on value added services and making a small acquisition of a company called 360 Degrees. By doing that and investing into the company this year, we are looking at a Rs 7 billion company; so the company was able to see a 25 times growth. 98 % to 99 % of that growth has come from Inbox and its team, and perhaps 1 % to 2 % from our company. We brought in a new board and strategies which were much more suited towards developing the company. The idea was to focus on providing solutions and quality services, regardless of where they came from, as long as they met a very strong need of the Pakistani market.”
Samad Dawood explains how with the help of Cyan, entrepreneurs are able to achieve their goals. “The majority of the work is done by the entrepreneurs. All we do is push them or their strategy and ask them hard questions, urging them to come up with answers on how to take the company forward. It is the team that has to take the company forward, the most we can do is provide them the access to markets, human resources and challenge them into thinking so they come up with proper solutions.”
Commenting on the resilience of Pakistan’s privately held companies, Isfandiyar Shaheen highlights the data collected by the All World Network which revealed the strength of Pakistan’s privately owned companies, “These companies are collectively making $1.4 billion in revenue and growing at 55 % year on year – and these companies are achieving all this at a time when you have terrorism and power failures.”
He points out how Pakistan recently came second on the Arabia500 list, a ranking of the fastest growing young companies in the Middle East and North Africa, Turkey and Pakistan. He believes that the strong performance of Pakistani companies in Arabia500 shows that in spite of the challenges there are lucrative business and investment opportunities in Pakistan.
To encourage dialogue and interaction between entrepreneurs and financiers, Cyan has launched a platform called the Entrepreneurs Exchange, “We bring people together to make them understand the different business sectors better,” says Isfaniydar Shaheen. “This interaction instantly leads to business solutions for the participants.”
Comparing the development of the Pakistani entrepreneurial ecosystem to other emerging markets, Shaharyar Ahmed who recently returned to Pakistan after 12 years to join Cyan noted that Pakistan was at an exciting inflexion point, “I believe Pakistan is where Brazil was 10 years ago. Many family businesses in Pakistan are in their second and third generation. This is typically when such businesses institutionalize by strengthening corporate governance and attracting “smart money” to unleash their full potential.”
Cyan has filled a gaping vacuum in Pakistan by providing a desperately needed alternative to the conventional sources of funding. As traditional sources of funding through banks and capital markets have become prohibitively costly and increasingly unwieldy, private equity provides an urgently needed means of financing for the growth and prosperity of Pakistan’s private sector. Establishing itself as a trusted partner for companies seeking to expand and increase effectiveness, efficiency and profitability, Cyan is committed to developing Pakistan’s entrepreneurial talent to the fullest.