ISLAMABAD: In the first two months of 2022, Pakistani startups received $68.15 million from investors, WealthPK reported.
To further promote the culture of startups in Pakistan, Prime Minister Imran Khan recently announced to establish Pakistan Technology Startup Fund worth Rs1 billion that will provide funding to 50 startups annually.
Technology startups in Pakistan were the top investment destination in 2021, as investment increased by more than 450 percent and reached $365.87 million compared to $66.4 million in 2020.
New startups reflect in every sector of the economy, but ecommerce has the largest share of 57.1 percent, followed by fintech at 27.14 percent, tracking logistics 4.97 percent, and others 10.17 percent.
The Government of Pakistan is encouraging entrepreneurship in different ways. The prime minister has also announced the tax holiday and 100 percent forex retention for information technology (IT) companies and freelancers registered with the Pakistan Software Export Board (PSEB).
It would encourage and incentivize investment in IT startups that would help in boosting exports to $50 billion in the next few years.
The government is also taking initiatives to bring innovations to businesses. It has established National Incubation Centres (NICs) to support startups in the country. This initiative works under the public-private partnership (PPP) through the Ministry of Information Technology and Telecommunication. The purpose of the national incubation centres is to empower the country’s youth by providing a creative environment buzzing with innovators, mentors, change-makers, and passionate leaders. Under the acceleration program, the already established businesses come under incubation for further expansion.
There is a great potential for new startups in Pakistan as 64 percent of the total population is below the age of 35. To further boost and encourage this trend of entrepreneurship, there is a need to explore new opportunities.
In Pakistan, there is a need to take steps to improve the regulatory environment to help startups and investors alike.
Though Pakistan improved its ranking by 39 points in the last two years and reached 108th position in ease of doing business, there is still a lot to do to facilitate young investors to start their own business.
Around 115 economies in the world currently have one-window operation setup. Pakistan has also started a one-window operation to facilitate new businesses by avoiding red tape (procedural delays) and additional costs.
Pakistan needs to incorporate additional features into the recently introduced one-window facility so that stakeholders can benefit from an all-encompassing service.
Pakistani startups’ access to capital has been increasing significantly, mainly as a result of increased international and local interest via venture capital funds and angel investors. There is a need to establish funding vehicles that serve to de-risk investment in early-stage startups.
INP
