Transforming Industries and Creating Opportunities: The Views of MachineLab Ventures Founder Shahjahan Chaudhary

In this exclusive interview with Shahjahan Chaudhary, founder of MachineLab Ventures, a venture capital firm dedicated to building next-generation fintech businesses. Chaudhary talks about his background and how his upbringing in Pakistan inspired him to want to bridge the gap between rural and urban areas and between Pakistan and the developed world. He discusses the role of fintech in solving global problems and how MachineLab differs from other fintech accelerators by using a robust technology stack and deep understanding of profitable business models.

Can you tell us a little about your background and how you got interested in fintech and entrepreneurship?

I was born in a village near Okara, a small town in the Pakistani province of Punjab. I wouldn’t say I didn’t have privileges because my grandfather was an educator and my father was an aeronautical engineer.

The name Punjab means “land of five rivers” and Punjab was the fertile center of many great kingdoms. The birthplace of the Indus Valley civilization, Harappa, is about 50 km from my birthplace. Some of the subcontinent’s greatest minds were born in Punjab: Bulli Shah, Allama Iqbal and Faiz Ahmed Faiz. Guru Nanak, the founder of Sikhism, was a Punjabi and Buddha Guatama spent a lot of time here. The ancient Takshashila University is considered to be one of the oldest official universities in the world and also part of our amazing heritage.

Interestingly, in the Punjab in the 18th century, the literacy rate was close to 100% for both boys and girls. The situation changed when, unfortunately, the British intervened in Punjab politics. As a proud Punjabi, I spent my summers in the countryside and noticed the contrast between Pakistan’s big cities and its rural population. Therefore, I have always had a deep desire to bridge this gap – not only between the cities and villages of Pakistan (and Punjab), but also between Pakistan and the rest of the developed world. Entrepreneurship, innovation and building things seemed like the obvious way to make an impact.

Over the past two decades, I have invested in many ventures – some of them were successful, some were not very successful, and some I would like to forget! I was on the board of the Pakistan Software Manufacturers Association ([email protected]), where we install The Nest I/o, a Google-funded incubator. Later, we won a tender to establish the National Incubation Center in Karachi, which I led as project director, and we accelerated over 100 start-ups.

We all know that money is a great tool and fintech has the potential to solve many of our problems as a species. And as banks opened up their licenses to fintech companies, opportunities in payments, FinOps and embedded finance multiplied. Whether it’s M-Pesa in Africa, TranferWise in Europe, or WeChat in China, the world of fintech is changing every aspect of our personal and business lives. I am thrilled to be a part of bringing the world’s poorest 3.5 billion into the global digital marketplace.

How did you come up with the idea for MachineLab and what gap in the market did you hope to fill with this venture?

Banks have regulatory coverage, and Banking as a Service companies provide the foundation for creating digital finance offerings. We are a venture builder focused on customer touchpoints and specific user journeys. We partner with corporates, venture capitalists and aspiring founders to build the next generation of financial businesses built on this rapidly evolving ecosystem of players.

Can you explain what makes MachineLab different from other fintech accelerators or incubators?

We are a venture studio and over the past 3+ years we have built a solid tech stack. We use our technology stack and integrations to launch new fintech ventures, reducing development time by several months. But we also bring deep insight into the creation of high-value business models and use cases. By building businesses with multiple customer touchpoints such as digital wallets, kiosks, and agent networks, as well as multiple service offerings such as payments, money transfers, and investments, we have built a reputation for scalability, security, and speed.

In your opinion, what are the key trends in fintech and entrepreneurship that are shaping the industry right now?

This fintech revolution will disrupt every country and region, as well as every industry. In the next few years, you will see every business transform into a fintech business. The internet has taken over the flow of information and look what has happened to the publishing industry. The next transition is a quick digitization of the value stream. This will create new technological giants and kill some of the old guard. This is an exciting time!

Could you talk a little about some of the most promising fintech startups you’ve worked with at MachineLab and what you think sets them apart from the competition?

There are plenty of opportunities in the fintech world right now. For example, our partner metal.finance caters to US immigrants who want to send money back to Africa. Then we launch a digital bank for small and medium businesses in Africa. The African continent mainly uses prepaid utility bills and we are working to digitize this experience.

We worked with ENOC in the UAE to create a kiosk system for their clients to deposit/withdraw cash, make money transfers and access other financial services. MTN uses our technology platform in Syria to manage SIM card issuance and billing. We are working on a neobank project aimed at families and teenagers.

Use cases range from money transfers, bill payments and employee cards to e-commerce payment platforms for diversified groups. As I said before, the possibilities are endless. We’ve also had a long association with Arbisoft, which is why we have a strong interest in travel technology and education technology.

How important do you think it is for fintech entrepreneurs to have a deep understanding of the industry they are trying to change, and how do you encourage the startups you work with to develop that understanding?

Many innovations occur at the intersection of two or more verticals. Our expertise in fintech only becomes meaningful when we multiply it with our partner’s expertise in the subject area. It would be a mistake to think that outsiders are the best at innovating. Sometimes yes, but this is the exception rather than the rule. Insiders with years of experience are a great bet for us.

And this is exactly what we are looking for – either large enterprises or startup founders with deep knowledge of the subject area. We bring our experience in fintech compliance, integration and engineering, our partners are experts in their industry and region. This is a recipe for success.

Can you talk about the challenges fintech startups face when trying to scale their business and how MachineLab helps them overcome those challenges?

Many companies launch wallets with the idea that you will acquire users quickly and figure out the business model later. We work with the founders to develop the right business model from the start. User acquisition and growth is best combined with profitability. Our multi-jurisdictional experience also helps fintech founders and corporations address compliance and integration issues early and efficiently. Building a fintech enterprise is hard, building one with blinkers is even harder. We help our partners see the big picture ahead of time so we can move forward faster.

As a founder and investor, what do you look for when evaluating a potential fintech startup to work with or invest in?

We are always on the lookout for smart hungry entrepreneurs. What we really like is the combination of deep humility, willingness to grow and attention to detail. So if you have a profitable idea racing through your neutrons for a fintech venture, I’d love to hear from you. One thing that is really important is that while technology plays a role, you should always be customer focused. Be obsessed. And never forget that you start a business to make money: for yourself and your partners. So don’t drink your own kool-aid: create something that people will love and be willing to pay for.

What advice would you give to aspiring fintech entrepreneurs who are just getting started and looking to build a successful business in the industry?

The best founders are mostly great learners. Constantly learning about your customers, your market, and your competitors requires a deep sense of humility and curiosity. When an entrepreneur sees that their business is stuck at a certain stage, it is mostly unrelated to the business. This is the founder and his own mental blocks. Success comes from a combination of ability and character. Founders should always focus on self-improvement, change, and upskilling. The recipe for success is simple: be the one who succeeds.

Looking into the future of fintech and entrepreneurship, what are you most excited about and what do you think will be the biggest opportunity and challenge for the industry in the coming years?

Alvin Toffler wrote a book called FurtureShock in 1970. If you haven’t read it yet, be sure to read it because it’s still relevant. The future is approaching us at breakneck speed, and this pace of change is getting faster and faster. Just being alive at a time like this is filled with adventure and opportunity. Change has a side effect: fear. So while I think it’s important to push humanity away from a technological dystopia, this digital genetic revolution could also lead to new opportunities for humanity. I think we all have a role to play in helping the best of humanity thrive and win.