Pakistan’s Startup Ecosystem Sees Strong Investment Surge with $32 Million in New Funding
Pakistan’s burgeoning startup ecosystem is showing signs of recovery, attracting $32 million in investment from a range of sources during the first four months of the current financial year. According to Invest2Innovate, local startups secured $15 million in Q1 and another $17 million in October, marking a significant uptick in investor confidence.
Three high-profile deals in October accounted for over $17 million in new funding. COLABS, a co-working platform, and Abhi, a YC-backed financial technology startup, raised $2 million and $15 million, respectively, with Shorooq Partners leading both their funding rounds. Farmdar, an agritech startup, also closed an undisclosed Pre-Series A round led by Moment Ventures.
Local investors have been cautious, with Indus Valley Capital as the only domestic player joining these rounds, participating in Farmdar’s Pre-Series A. On the venture capital side, Pakistan-based Sarmayacar received a $15 million boost from the UN’s Green Climate Fund to support startups tackling climate change, further reinforcing investor interest in sustainable business models within the country.
The investment momentum was matched by noteworthy mergers and acquisitions (M&A). TRAX, a logistics startup, merged with Secure Logistics Group Limited (SLGL), while Trikl, a fintech operator, was acquired by Elphinstone. Aly Fahad, a prominent ecosystem facilitator, attributed the startup sector’s appeal to Pakistan’s improving economic stability, driven by the resumption of the IMF program and favorable Fitch Ratings for the country.
The State Bank of Pakistan (SBP) has played a vital role in fostering a pro-investment environment, reducing the policy rate to 15 percent as part of a broader strategy to stimulate economic growth and manage inflation. This monetary easing has improved access to credit and increased market liquidity, creating favorable conditions for business expansion. The Special Investment Facilitation Council (SIFC) has also been pivotal, attracting foreign direct investment (FDI) and supporting regulatory ease for new ventures, according to Paklaunch’s CEO.
Further bolstering optimism, the recent Singapore FinTech Festival showcased Pakistan’s growing startup potential. Overseas Pakistanis, investors, and international tech firms highlighted the country’s improving economic indicators and expressed strong interest in collaborating with high-potential startups and fintech operators, signaling brighter prospects for the Pakistani startup landscape in the months ahead.
This renewed investor enthusiasm reflects a broader positive sentiment towards Pakistan’s economy and a belief in the country’s potential as a rising tech hub in South Asia.
