As a fifth most populous country in the world with 220 Million people, almost two-thirds of whom are under the age of 30, Pakistan is naturally compared to Indonesia, which has developed rapidly into one of the fastest-growing technology regions outside of the U.S. and China.
Despite years of lagging behind, the startup ecosystem in Pakistan has blossomed over the last year, as it has experienced unprecedented growth in 2021. Here we will review this growth in detail and talk about the upcoming projections.
Technology and Entrepreneurial ecosystem in the country has come to life as it raised over $325 million in 2021, which is five times the funding in 2020 and twice the last six years combined. With Startups Valuation at $1.5bn, a 5X increase in YOY, and a large portion of the capital coming from international investors in Asia, the Middle East, and even famous Silicon Valley investors, this growth is most exciting.
Here’s a chart showing yearly venture funding in Pakistan-based startups from 2013 till 2021.
Notable Startups and Investors:
Following are top 10 startups with largest investment deals:
In terms of value and volume, e-commerce was the top sector with 19 transactions disclosed and over $180 million in funding in 2021. FinTech received over 25% of the VC funding this year. Thanks to the “fintech revolution,” startups are finding investors eager to tap into the economy of the third most unbanked submarket. Below is an industry breakdown of the investments in 2021:
But what worked for Pakistan?
A number of factors have fueled Pakistan’s tech ecosystem’s sudden emergence on the international stage:
- Total pollution of 227 Million with 37.3% Urbanization having 82.8% Mobile Connections
- Internet adoption by 47 Million unique users makes 20.7% of the current population an improved security situation, fast-growing mobile connectivity, and legal and regulatory changes.
- With a projected growth of seven times from 2020 to 2030, the country has also seen a massive increase in the consumer market.
There has been a tremendous opportunity for investors in Pakistan in 2021 being one of the untapped countries in the world, making the future bright for Pakistani startups. In 2021, 20 startups closed their first round of either pre-seed or seed funding raising $ 63.2Million. The average growth rate of subsequent rounds since 2013 has also been 8.8 times, indicating the ecosystem has not yet reached its full potential rather it’s just the beginning.
The most promising themes for 2022 are Fintech, E-Commerce, Health and Edtech with a greater inclination towards a digital-first economy. We at COLABS are looking forward to an empowered startups ecosystem by empowering 100,000 entrepreneurs and providing a gateway to international companies in Pakistan.