ISLAMABAD: Despite challenging economic situation, startups in Pakistan are outperforming as they attracted $320 million in investment in the first eight months of calendar year 2022. The culture of startups in Pakistan is getting popular as both the number and capital portfolio of such ventures are increasing rapidly. Investment in startups in 2021 was $364 billion as investors from around the globe have put their money into emerging businesses. It was a record high of 450%, from $66.4 million in 2020.
Venture capital is an essential driver behind the development of many sectors of economy as it provides innovation platforms and promotes new firm creation, rapid business growth, entrepreneurship, competition, and job creation. During these eight months of 2022, Bazaar, an e-commerce startup, has raised $70 million, the highest amount of the year. Local and foreign investors, including Dragoneer Invest Group, Tiger Global, Indus Valley Capital, Defy Partners, Acrew Capital, Wavemaker Partners, B&Y Venture Partners, and Zayn Capital, provided funding to this startup. The Bazaar funding type was Series B. The second highest investment was received by Dastgyr, which was $37 million in the second quarter of the current calendar year in Series A. Dastgyr also received funding from both local and foreign investors, which include Veon Ventures, Zinal Growth, DEG, Khwarizmi Ventures, OTF Jasoor Ventures, Cedar Mundi, Reflect Ventures, Century Oak Capital, Hi2 Global, GoingVC, Astir Ventures, K3 Diversity Ventures, Chandaria Capital, SOSV, Edgebrook Partners, and EquiTie.
The highest funding of this year is currently $36 million which was received by Retailo, an e-commerce startup in Series A. The local and foreign investors which have invested in Retailo include Graphene Ventures, 500 Global, Agility, Aujan, Tech Investment Com, Mentor’s Fund, Shorooq Partners, Abercross, Holdings, Arzan VC, and AgFunder.
These startup investments are a very positive sign for Pakistan’s economy, which is suffering from challenges. This will not only increase economic activity in the country, but also provide job opportunities to the youth. To promote the culture of startups through venture capital, the Government of Pakistan is also helping investors by easing the regulations and cutting taxes and other amenities.
The State Bank of Pakistan (SBP) has also removed a major hurdle in allowing startups to get loans from foreign investors through convertible debt. –INP
