Startups

Pakistani startups to witness the largest growth in funding in 2021: report

In this photograph taken on May 24, 2019, People work at their stations at the National Incubation Centre (NIC), a start-up incubator, in Lahore. - Pakistan's government is enthusiastic about start-ups and has launched incubators in dozens of universities and tech schools, which it hopes will help develop the sector. (Photo by ARIF ALI / AFP) / TO GO WITH: Pakistan-technology-economy, FOCUS by Fatima KANEEZ and Joris FIORITI

As a Pakistani entrepreneur, or someone aspiring to be one, 2021 is likely to be your year. According to a recent report released by MAGNITT, the largest community for startups across the MENA region, Pakistan is very likely to experience the greatest growth in startup funding in 2021.

The report, entitled 2021 Emerging Venture Markets Report, notes the meteoric rise experience by the Pakistani startup community in 2020. In fact, with a 45% increase in deal flow, a 63% increase in venture capital funding, and a 97% surge overall in startup funding, the country saw record levels of investment in 2020 as compared to 2019. Both local and foreign players were starting to sit up and take notice of Pakistan’s explosive startup environment.

The report proceeded to predict that in 2021, Pakistan was likely to witness the largest growth rate of total funding, based on its very strong current growth trajectory.

“2020 proved that follow-on capital would flow to Pakistan quickly for startups that execute well. Airlift raised a large round, $12M, within just 7 months of us leading their initial rounds,” the report said. “Bykea raised a $13M series B round, led by Prosus. Many top VCs including First Round Capital, Prosus, Global Founders Capital, Village Global, Quiet Capital, GFC, YCombinator, Pioneer Fund have invested in Pakistan in 2020.”

“We expect this trend to accelerate in 2021, as Pakistan crosses the 100M broadband subscribers milestone,” the report added.

In terms of sectors that received the most funding, the transport industry unsurprisingly came out on top (think about the progress made by Airlift and Bykea) as it overtook e-commerce and accounted for 28% of the total capital invested in Pakistan.

However, e-commerce did achieve top position on the leaderboard in terms of number of deals signed as it accounted for 33% of the total number of deals signed between 2019 and 2020, followed by the fintech sector’s 11% share.