“Female startups in Pakistan raised only 3 percent of the total startup funding in last 5 years.”
Conatural is a brainchild of two sisters, Myra Qureshi and Rema Taseer, Myra Qureshi is the CEO and co-founder at Conatural, and she completed her BSc Honors from London School of Economics and Political Science (LSE). She pursued a career in investment banking and financial services and finished her Chartered Management Accountancy certificate and Executive-MBA from Georgetown-ESADE (US and Spain) while working. Rema Taseer is the director and co-founder at Conatural and did her BSc from the University of Sussex in 2008, and her master’s from University College London in 2009. She worked in the development sector with the United Nations in New York, and the World Bank in Islamabad before she co-founded Conatural.
Following are the edited transcripts of a recent conversation of BR Research with the co-founders of the organic beauty brand:
BR Research: Tell us the idea and drive behind the startup? From its inception, what has been the growth journey like?
Myra Qureshi: Conatural was launched to create a new standard in the Pakistani beauty industry. Seeing how unaware people in Pakistan were of the hazards of toxic chemicals in cosmetics, our goal was to inspire, empower and educate and provide beneficial beauty solutions. Realizing the importance of healthy ingredients, we wanted to create beauty products as safe as they were effective. We made the decision to create only 100 percent organic and natural hair and skin care products without using toxic chemicals such as parabens, triclosan, artificial musks, PPD, silicones and sulphates and to change the paradigm of the beauty industry.
Like most businesses, we started small and have had a very clear vision of what our brand represents. We started with 7 products that have grown to 50+ SKU’s. Our aim has and will always be premium quality and we are the market leader in natural and organic because we are true to our core values and create a brand that employees and customers are proud to associate with.
BRR: How do you then differentiate your brand from the mushrooming home-grown organic brands?
Rema Taseer: Conatural is the pioneer in the market for truly natural and organic cruelty free beauty products in Pakistan. We have won numerous awards in Pakistan in this endeavor. The market potential for organic and natural alternatives is growing and there is a room for new brands to enter the market. The rise in popularity of these products has essentially been a direct result of growing health concerns among consumers and increasing awareness with regard to the benefits of choosing natural and organic. The important part of starting this business, whether it is cosmetics or food, is to ensure that what you are claiming in your product is actually what you are giving to the customer. With our experience, research and development on natural skin and hair care products, focus on impeccable quality along with state-of-the-art equipment, ISO 22716 certified Good Manufacturing Processes (GMP) and standardized SOPs, Conatural is able to supply high quality products to the conscious consumers of today.
BRR: How did you come up with the idea behind the whole recycle your co-natural bottles? And how far will you be taking this idea?
Myra Qureshi: Statistics show that an estimated 120 billion units of cosmetics packaging are produced globally and approximately 9 percent of it is recycled, while the rest is incinerated, landfilled, or dumped. Our goal is to work towards reducing single use plastic as part of our commitment to sustainability. Our pilot project is with Davaam life, where we use the refill station to refill shampoo. You can take any bottle and refill Conatural shampoo free of charge. We want to remind our customers and incentivize them to use these machines and be part of the Conatural family that is climate conscious, which is why we started by offering our refills for free. We truly believe that we need to leave our planet in a better condition for our children that found it. We are looking forward to introducing new innovative concepts to make our customer experience seamless and also contribute to making Pakistan more pro-recycling, reducing wastage and changing consumer behavior to adopt sustainable and environmentally friendly practices.
BRR: Where do you manufacture your products and how do you source raw material?
Myra Qureshi: Our product ideology is a mix of exotic essences, ayurvedic and modern aromatherapy. We are a pioneer in Pakistan to use ingredients that are natural, organic (where possible), and wildcrafted, along with pure therapeutic grade essential oils in our products. The results of our products compete (and usually beat) substitute chemical-based products in the long run. Therefore, we source our raw materials from certified suppliers from all over the world and produce our products in Pakistan.
BRR: You have recently received Pre-Series A round of funding; How do you plan to use the funding and how will it help your brand?
Rema Taseer: Conatural has been a profitable business and the reason we have raised money is to be able to accelerate growth with the help of our investors. Raising this amount will facilitate us to execute our natural and international expansion plans and position our brand as a key player in the world market of natural and organic products, fostering product innovation. The $480 billion beauty industry continues to grow, and we look forward to building a great Pakistani company in an exciting category.
BRR: Do you have the scale and scope for exports?
Myra Qureshi: We are exporting our products and will continue to scale this in the near future. There is a demand for Conatural products abroad because our products are not adulterated or misbranded and we are confident that given our commitment to producing quality certified products, we comply with the requirements of foreign purchasers and customers.
BRR: Being a female-led startup, how difficult do you think it is for women startups up raise funding both locally and globally?
Rema Taseer: Female founders are gaining ground in venture capital, but the funding gap between genders remains broad. The Pakistani startup ecosystem too is in its infancy and even investors are not as savvy as you would see abroad. In the last five years, women-led startups in Pakistan only raised 3 percent of the startup ecosystem’s total funding. Therefore, raising capital is definitely a challenge. However, this is a growing space and there is a lot of opportunity.
As per research, most investors are by and large men, and investors indulge in an unconscious gender bias throughout the process of investment. A study found out that the men receive a better response in contrast to the women, even if the sales pitch was precisely the same. The research also proved that the male dominance in startups reduces the chances of women in attracting funds towards them.
Another major problem has to do with women coming up with products that are mainly female specific. Despite their mass appeal, such ideas get labeled as ‘niche’ products that cannot survive in the long run. These products, therefore, rarely get funded and scale to their maximum potential.
Low financial literacy among women is another factor that contributes to little success with investors. Most women lack the knowledge of simple financial concepts like interest rates, accounts, and loans. In such a scenario, women aren’t able to present hard data to the investors and end up garnering no interest in their businesses. Financial literacy is also critical as it empowers the entrepreneur to diversify the risk portfolio, plan for the future, and make data-driven decisions. When an investor does not see a solid business plan, they lose interest in the presentation.
Women are also known to have a low-risk appetite and many venture capitalists are looking for high risk high return ideas. Many investors also feel that women prioritize their family and emotional connections over the business. All such social factors lead to reduced chances of getting investor’s money.
On the flip side, it is interesting to note that according to many studies, women entrepreneurs make more money than their male counterparts. It is thus strange that they should be ignored by investors.
However, women raising money is a very topical subject in the world today. Most governments, organizations and donor agencies are working on women led businesses getting more funding resulting in more GDP growth as well as equitable income across genders. So, there will be a lot of growth in this segment in the foreseeable future.