Pakistan’s Startup Funding Plummets Amid Investor Caution, But Tech Exports Show Growth
Pakistan’s startup ecosystem faced a significant decline in investor confidence in 2024, with venture capital funding dropping sharply by 70 percent to $22.5 million, compared to $75.8 million in 2023, according to Data Darbar.
The number of funding deals also fell by 61 percent, from 39 in 2023 to just 15 in 2024. However, the average deal size increased by 68 percent to $3.75 million, and the median deal size surged 158 percent to $3.1 million, indicating a focus on fewer but larger investments.
Early-stage funding dominated the landscape, with Pre-Series A rounds making up 48 percent of disclosed capital and seed-stage rounds accounting for 38 percent. Series A funding shrank to 14 percent of total investments, down from 25 percent in 2023, and no Series B deals were recorded.
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Gender disparity persists, as male-founded startups secured 75.6 percent of total funding, mixed-gender teams received 24.4 percent, and female-led startups raised no funds during the year.
Debt financing provided some relief amid the equity slowdown, raising $20.5 million across 28 deals. Fintech led this segment with 46.7 percent of debt funding, followed by E-commerce (37.8 percent), Real Estate (8.9 percent), and CleanTech (6.7 percent).
Mergers and acquisitions also slowed, with only five deals in 2024—a 44 percent drop from nine in 2023. Unlike previous years, 80 percent of these M&A transactions were domestic.
On a positive note, Pakistan’s broader tech sector performed strongly. The ICT sector grew 8.5 percent, outpacing the national GDP growth of 1.73 percent. ICT exports surged 33.7 percent year-on-year to $3.6 billion, driven by computer services, which grew 38.5 percent to $3.1 billion. Information services exports skyrocketed by 341.5 percent to $22.4 million, while telecom services added $550 million.
Overall, while startup funding cooled amid investor caution, Pakistan’s export-oriented tech sector continues to show promising growth.
