Invest2Innovate (i2i) has officially launched the Pakistan Startup Ecosystem Report 2024 (PSER 2024), marking the fourth edition of its flagship initiative. The report was unveiled during a high-profile event held at a local hotel, which brought together prominent leaders from Pakistan’s entrepreneurial ecosystem, including investors, policymakers, and other key stakeholders.
The report arrives at a critical juncture for Pakistan’s startup landscape, which has undergone a substantial transformation following the funding boom of 2021-22. With investments declining sharply from $355 million in 2022 to just $37 million in 2024 (up to November), the ecosystem has shifted focus from rapid growth to fostering sustainable and profitable businesses rooted in robust unit economics.
Resilience Amid Challenges
“Since 2014, i2i has been benchmarking the Pakistan startup ecosystem, tracking historic highs but also more difficult periods,” said Kalsoom Lakhani, founder of i2i. “This year’s report delves not only into the data behind a harder time, but also the reasons behind it, and how founders are managing and adapting. Pakistani founders are some of the most resilient in the world, and 2024 is further proof of this.”
Under the leadership of i2i CEO Sarah O. Munir, the report was authored by Amna Masood, i2i’s Head of Insights, and her team. Drawing on interviews with over 60 industry stakeholders and three targeted surveys designed for investors, startup founders, and officials from entrepreneurial support organizations, the findings are supplemented by extensive secondary research.
“The absence of credible, data-driven research has been a persistent challenge for stakeholders in Pakistan’s entrepreneurial ecosystem,” said Munir. “This report aims to address that gap, offering actionable insights to help Pakistan realize its full potential on the path to innovation.”*
Key Insights from PSER 2024
The report underscores Pakistan’s vast potential, bolstered by a young population of 241.5 million, 65% of whom are under 30. Rising digital adoption and growing IT exports, which reached $3.2 billion in FY24, reflect opportunities for innovation and growth.
Fintech continues to dominate funding, securing $30.5 million of the total raised in 2024. The report highlights notable achievements in the ecosystem, including:
- SadaPay’s acquisition by Turkey’s Papara (valued at ~$2 billion).
- PostEx’s $7.3 million pre-Series A funding round.
- COLABS raising $2 million for regional expansion into MENA.
Persistent Challenges
Despite the progress, the report identifies several barriers impeding growth:
- Gender disparity: Women make up only 39% of the workforce and have received just 18.75% of total startup funding since 2015.
- Connectivity issues: With 47% of the population lacking internet access, frequent disruptions led to estimated losses of $238 million in 2023.
- Low R&D investment: Pakistan spends only 0.16% of GDP on R&D compared to the global average of 2.62%.
- Regulatory complexities and limited access to capital: These factors further strain the ecosystem’s development.
Opportunities Ahead
Despite the hurdles, the report highlights significant prospects, including the potential for Pakistan’s digital economy to generate Rs. 9.7 trillion by 2030. PSER 2024 recommends coordinated action from all stakeholders, emphasizing:
- Harmonized regulatory frameworks.
- Infrastructure improvements.
- Enhanced support for women entrepreneurs.
- Strengthened academia-industry linkages to address skill gaps.
- Fostering local investment to counter declining international funding.
A Roadmap for Growth
PSER 2024 serves as a comprehensive blueprint for transforming challenges into growth opportunities, ensuring Pakistan remains a dynamic hub for innovation. The report underscores the resilience and adaptability of Pakistani entrepreneurs, setting the stage for a more sustainable and inclusive future.
To read the complete report, follow the link: https://invest2innovate.com/PSER-2024/
