Pakistani startups raise $328m

Despite investor scepticism, amount raised equals 87% of total funding in 2021

KARACHI:

Despite multiple reports of startups failing in Pakistan, entrepreneurs have managed to raise $328 million in capital in the nine months of 2022.

In spite of heightened investor scepticism stemming from geopolitical tensions and mounting fear of a global recession, the total funds raised by Pakistani startups, in the nine months of 2022, stood at $328 million. This amounts to 87% of the total funding in 2021, as per Alpha Beta Core’s Deal Tracker.

“The third quarter of 2022 has had more early-stage deals with total seed and pre-seed level rounds accounting for 90% of the total deals. The average deal size in the third quarter of 2022 clocked in at $60 million versus $7.3 million last quarter,” said Khurram Schehzad, CEO of Alpha Beta Core (ABCore).

Speaking to the Express Tribune, startup Investment Specialist, Kapeel Kumar said, “The more room for failure we leave, the more we also create room for success in its wake.”

“The one reason Pakistan is witnessing the boom is because the country is, after all, one of the few untapped frontier markets,” he noted.

“Most investments are within B2B or B2C e-commerce, fintech and logistics. This is a trend that can be observed in a lot of emerging markets as the ecosystem starts to grow,” he added.

“The total deal value in the third quarter was recorded at $48.6 million with a total of 11 deals,” said ABCore CEO Schehzad.

“The top deals closed were DBank at $17.6 million, OneLoad at $11 million, PriceOye at $7.9 million and DealCart at $4.5 million. Other notable deals this quarter were Neem and SnappRetail at $2.5 million each and Mahaana at $2.1 million,” he added.

Explaining the impact of startups shutting operations in Pakistan, Kumar said, “The closing of tech-startups in the last six months is alarming. In Pakistan, this will weigh heavily on the entire startup ecosystem, which is unfair to the many startups performing and creating employment.”

“The success of some startups is being fueled by the country’s growing human capital and rising investments in technology startups,” he added.

“We look forward to a better closing of 2022 as compared to that in 2021. Pakistani startups still have much better survival rates (both in terms of size and numbers) than the rest of the region or the world,” Kumar commented.

“Owing to our massive population, we have an incredible potential of growth within us,” said Noman Ahmed, CEO of SI Global Solutions.

He highlighted that “Fintech and e-commerce alike have brought in a significant chunk of this funding. The need of the hour is to create consistency and compliance, and support may be needed in order to sail through this passage to enable startups to continually thrive ahead. With this new found funding, we must collectively focus on bringing Pakistan at par with the Western world. There’s absolutely no doubt that Pakistan is positively brimming with talent.”

“As leading professionals in the tech world, it is upto us to revolutionise Pakistan’s technological landscape by nurturing, guiding and shaping this pool of talent. It is imperative that this work begins at the university level. Final projects and thesis submissions should focus on creativity and new ideas that may be brought to life with support from the startups on ground. We must rise to the challenge and work on expanding our horizons within the tech world,” urged the SI Global CEO.

Published in The Express Tribune, October 4^th, 2022.

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