Pakistan startups optimistic despite funding fall
The Pakistan startup ecosystem faced significant challenges in 2024, with funding dropping to $37 million compared to $355 million in 2022, according to the Pakistan Startup Ecosystem Report (PSER) 2024. Despite this, there is optimism as the country’s macroeconomic fundamentals stabilize, leading to a positive outlook for 2025. The +92Disrupt event, organized by Katylst Labs, showcased this sentiment, with a $15 million injection across four deals in the third quarter.
Gobi Partners launched a $50 million Techxila Fund II, and Sarmayacar announced a $40 million Climaventures Fund. Notable deals include Laam raising $5.5 million, SadaPay’s acquisition by Papara, PostEx’s $7.3 million pre-Series A round, and COLABS raising $2 million for expansion. However, challenges persist, such as internet restrictions causing $23 million in losses, regulatory complexities, low R&D investment, and limited access to capital.
Pakistan startup challenges and optimism
Gender disparity is also evident, with women making up only 39% of the workforce and receiving just 18.75% of funding since 2015. Usman Malik, co-founder and CEO of Grenlit Studios, emphasized the importance of normalizing entrepreneurship, citing examples from Shark Tank Pakistan.
The end of the ‘free money’ era requires startups to focus on unit economics and profitability. Misbah Naqvi, co-founder and general partner at i2i Ventures, stressed the need for businesses to solve problems in the “have-to-have” space. PSER 2024 identifies the digital economy as a significant opportunity, with the potential to generate Rs9.7 trillion in value by 2030.
It calls for coordinated action from all stakeholders to harmonize regulations, improve infrastructure, and support women entrepreneurs.