Pakistani Startups Secure $32 Million in FY2024-25 Amid Rebounding Investment Climate

Pakistani startups have made an impressive return to the global investment stage, raising $32 million in the first four months of the 2024-25 financial year. This significant funding milestone underscores the strengthening of investor confidence in the country’s growing entrepreneurial ecosystem. Local startups secured $15 million in the first quarter and an additional $17 million in October, signaling a promising recovery for the sector.

Three significant transactions generated more than $17 million in October, which was a particularly active month. COLABS, a provider of co-working spaces, raised $2 million in a Pre-Series A round, which was led by Shorooq Partners. Abhi, a financial services platform, also received an extraordinary $15 million in a credit financing round headed by Shorooq Partners. Farmdar, an agricultural technology startup, secured an undisclosed sum of money in its Pre-Series A round, with Moment Ventures at the forefront.

Interestingly, despite the robust funding activity, the involvement of local venture capital was restricted, with only Indus Valley Capital participating in the Farmdar funding round. Nevertheless, Sarmayacar, a venture capital firm, was able to secure $15 million from the UN’s Green Climate Fund to assist businesses in their efforts to combat climate change. This development serves to underscore the increasing interest in impact-driven ventures.

The month of October also witnessed notable mergers and acquisitions (M&A) in the tech sector. TRAX and Secure Logistics Group Limited (SLGL) have merged, and Elphinstone has acquired Trikl, marking a period of maturation and expansion in Pakistan’s startup scene. Aly Fahad, a critical facilitator in the ecosystem, attributed the recent increase in investment to the improving economic conditions in Pakistan, which have been facilitated by the resumption of the IMF program and the country’s favorable Fitch Ratings.

Contributing to this encouraging investment climate, the State Bank of Pakistan (SBP) has recently announced a nominal policy rate of 15%, which is expected to augment economic expansion, decrease inflation, and improve credit availableness. The reduction in the policy rate has positively impacted market liquidity, further boosting investor confidence.

The Special Investment Facilitation Council(SIFC) is also equally working to strengthen foreign direct investment(FDI) and to provide a more friendly environment for startups to thrive. Paklaunch’s CEO stated that the venture capitalists are optimistic about the country’s improving economic situation and plan to continue funding Pakistan’s high-potential startups

At the Singapore FinTech Festival, overseas Pakistanis, investors, and companies showed confidence in the economic growth of Pakistan. They also showed a keen desire to collaborate with innovative startups and fintech operators, further demonstrating the country’s growing appeal on the international investment stage.