Pakistani Startups Raise $15 Million in Q3 2024 Despite Global Venture Capital Slowdown

Pakistan’s startup ecosystem is showing signs of resilience despite the diminished VC trends around the world. Pakistani startups secured $15 million in four transactions in Q3 2024, a 650% increase in QoQ as compared to the previous year. However, this has occurred at a time when global VC funding has been on the decline with funding having dropped to $70.1 billion in Q3FY24, down by 22.6% on a YoY basis and 26.6% QoQ. This has been the lowest funding since the year 2017.

Asia’s VC funding declined by 51.4% to $14.9 billion, a stark contrast to the growth witnessed in North America.  Despite these global challenges, Pakistani startups have emerged to some extent with significant funding rounds in Fintech and Mobility & Supply Chain Logistics.

PostEx 

PostEx, a Lahore, Pakistan-based firm that has built a fintech and logistics model to provide access to capital, closed Pre-Series A of $7.3 million. The other investors in the round include Conjunction Capital, Dash Ventures, Sanabil500, VSQ, FJ Labs, and Zayn VC. The company’s strategy for the utilization of the funds is to strengthen its market position in Pakistan and to expand into the GCC region.

Qist Bazaar 

Qist Bazaar, a Karachi, Pakistan-based ‘buy now pay later’ (BNPL) startup, has closed its Series A funding round of $3.2 million. Indus Valley Capital led the round while Gobi Partners invested in the round as well. Of course, Bank Alfalah has already invested, and it is the leader of the seed round.

The company intends to use the funds to propel the company’s growth through the diversification of products, upgrading the technological base, and increasing its coverage in Pakistan. The bright side was that 67% of the funding rounds were led by international VCs. As the economic conditions continue to improve, the last quarter may record even more deals.

DealCart

Social e-commerce startup DealCart which aims to revolutionize the Pakistani consumer’s access to daily-use products has closed its $3 million Seed funding round with the participation of Shorooq Partners and Sturgeon Capital.

Other investors that invested in the round included 500 Global, Evolution VC, Rayn Capital, and Khyber Venture Partners. This capital will support DealCart to continue its work of reaching more consumers and offering them affordable necessities in Pakistan.

Zip Technologies

Zip Technologies raised $1.5 million in Series Pre-A funding from Shorooq Partners to launch Zip’s electric smart mobility solutions across Lahore, Pakistan, to support the country’s vision to achieve its environmental targets.

Indus Valley Capital, the early investor in this startup also participated in this round, while several angel investors also invested in this round. From this investment, Zip will establish more than 60 battery swap stations and launch 1000 of its Zip Utility Motorcycles (ZUM 2000) in the next year. The smart motorcycles have fleet management software features which include accident notification, theft prevention, and tracking.

The Pakistani venture market remains relatively small and, like in many developing countries, depends on foreign money since there is little local funding and few government-backed programs. Pakistani startups have only managed to secure $16m in the first nine months of 2024 and the venture industry has not much shifted by the upbeat sentiment in public markets in Pakistan which has gained 29.2% in 2024.

The global venture market, especially in Asia, is still challenging but Pakistan’s start-up is more optimistic. Although the scale may still be small compared to the global venture markets, this could bring much-needed focus to local success stories and help foster a more conducive ecosystem for startups in Pakistan.