In a significant boost to Pakistan’s startup ecosystem, the International Finance Corporation (IFC) has announced a $3 million investment in i2i Ventures, the country’s first female-led venture capital fund. This investment, part of IFC’s Startup Catalyst Program, aims to address the critical funding gap faced by early-stage startups, particularly those led by women, amidst regional and global challenges like political instability and economic volatility.
i2i Ventures, established in 2019 by venture capital veterans Kalsoom Lakhani and Misbah Naqvi, focuses on investing in pre-seed and seed-stage startups, providing not only financial backing but also hands-on support. The fund has already made a significant impact, with one of its portfolio companies, Oraan, reaching over 2 million Pakistani women with secure and user-friendly financial products and services.
“Their focus on gender diversity and inclusion, and targeted support for women-led businesses, is what makes them truly unique,” said a spokesperson from Oraan, highlighting the crucial role i2i Ventures plays beyond just financing.
The IFC’s $3 million investment includes up to $2 million from its own account and up to $1 million from the Women Entrepreneurs Finance Initiative (We-Fi). This funding is expected to enable startups like Oraan to continue accessing the crucial support they need to grow and scale. Zeeshan Sheikh, IFC’s Country Manager for Pakistan and Afghanistan, emphasized the potential for Pakistani startups to develop new technologies and tech-enabled business models addressing issues such as climate change and access to quality education, healthcare, and financial services.
“There is tremendous potential in Pakistan for startups to develop and scale up new technologies and tech-enabled business models,” Sheikh said. “But early-stage entrepreneurs, particularly women, face significant challenges in accessing the resources they need to launch and grow their businesses. Tackling this is critical to build ecosystems that boost innovation and entrepreneurship.”
i2i Ventures’ approach includes not only financial support but also strategic guidance and mentorship, drawing on insights from Invest2Innovate, a sister company founded by Lakhani in 2011. Invest2Innovate has been a pioneer in Pakistan’s startup ecosystem, offering business support to entrepreneurs and connecting them with investors.
“We saw firsthand both how hard it was to build businesses in Pakistan and how resilient Pakistani founders were as a result,” said Naqvi. “i2i Ventures was born from that experience—of seeing up close the potential of startups in the market, and the need for founder-centric investors who understood business and market challenges and could support their growth at the early stage.”
A third of i2i Ventures’ portfolio comprises women-led startups, a significant focus given the disparity in funding between male-founded and female-founded startups in Pakistan. According to Invest2Innovate’s 2023 annual report, male-founded startups raised nearly $60.5 million across 29 deals, compared to just $10.5 million for five deals with female founders.
The impact of i2i Ventures extends beyond female founders. Ali Moeen Malik, co-founder of ezBike, credits much of his company’s success to the support provided by i2i Ventures. “From connecting us with potential funders to refining our business strategy, i2i Ventures has been instrumental at every stage,” he said. “They’ve provided not only financial backing but also strategic guidance, helping us navigate numerous challenges and boost our growth and development.”
Other companies in i2i Ventures’ portfolio include Abhi, a fintech salary advance platform, and Truck It In, a company working to improve efficiency in Pakistan’s fragmented trucking and logistics industry.
IFC’s investment in i2i Ventures is part of its broader strategy to support innovative startups and nascent ecosystems essential for sustainable and inclusive growth in emerging markets. The IFC’s Startup Catalyst Program has supported 22 accelerators and seed funds investing in over 1,180 startups across 24 emerging markets since its launch in 2016.
“We-Fi is committed to supporting women entrepreneurs through funds such as i2i Ventures, which not only enable more private sector financing for women startups but also work to make the ecosystem more supportive for women founders,” said Hanh Nam Nguyen, IFC’s We-Fi Program Manager.
These initiatives align with the World Bank Group’s new gender strategy for 2024-2030, aimed at accelerating gender equality to end poverty on a livable planet through concerted action, financing, and programs.
“By providing startups with access to early-stage capital and expertise, we can foster an inclusive startup ecosystem that drives entrepreneurship, boosts gender and inclusion, supports innovation, and creates jobs,” said Farid Fezoua, Global Director for Disruptive Technologies, Services, and Funds at IFC. “We’ve seen the difference this has made to lives around the world—and the positive signal it sends to the wider investment community.”
Lakhani and Naqvi are optimistic about the future and the potential for their fund to continue making a significant impact on Pakistan’s startup ecosystem.
- A new IFC investment in Pakistan’s first female-led venture capital fund will help bolster the country’s startups and drive innovation.
- Regional and global challenges like political instability and economic volatility have hindered access to crucial funding for startups in Pakistan.
- Venture capital funds like i2i Ventures are vital to help close this financing gap by investing in pre-seed and seed-stage startups and providing them with hands-on support.
Source: IFC
