The Pakistani startup ecosystem has had an incredible year. Having moved up the ladder to 75th position worldwide and 2nd in the South Asian region, as revealed by the recent “Global Startups Ecosystem Index 2021”. The highest-ranked city in Pakistan in terms of startup activity is Lahore, having risen 14 places to 257th globally and 4th in South Asia.
Pakistan is the 5th most populous country with a population of 200 million English speaking educated youth. This helps facilitate startup interaction globally.
According to the 2021 Emerging Venture Markets Report, Pakistan has experienced a 97 percent increase in venture capital funding in 2020, contributing to Pakistan’s growth as a startup ecosystem hub.
According to the Pakistan Startup Ecosystem Report 2019, business start-up activity increased significantly between 2012 and 2019. In 2012, there were only two major incubators and no notable funding sources or investors. However, 2019 saw an increase of 24 major incubators/accelerators, 20 formal investors/ funding sources and 80 co-working spaces in Pakistan. Over the past few years, business incubators, accelerators and co-working spaces have emerged across Pakistan, some supported by the Federal Government’s National R&D Fund. Even with the impact of Covid, Pakistan expects $360 billion in consumer spending by 2027
Pakistan now hosts a total of 800 or more startups. It is estimated that Pakistani startups raised investment via 141 deals from 2015 to 2020, 19 deals remain undisclosed therefore $178 million is attributed to 122 deals. This growth has been supported by both infrastructural and policy measures.
In last 5 years, Pakistan did a remarkable growth in internet adoption due to huge gains in affordability - 1.5 GB cost less than a dollar has led to 103 million internet subscribers, which has created a large accessible target market for startups.
Pakistan has tech talent in abundance to create successful venture back startups - 400K software engineers and 20K CS and IT graduates coming out of university every year.
The Government of Pakistan has decided to set up a 75 million dollar fund for entrepreneurs and small startups at State Bank of Pakistan (SBP).
The launch of new local funds focused on Pakistan in the past two years, are all strong indicators where the venture capital landscape is moving. As activity in the entrepreneurial ecosystem has grown and proliferated, international donor agencies and actors have also aligned their agenda in favor of entrepreneurship.
Corporations and large companies are also playing a role in the entrepreneurial ecosystem, either as partners, or separately, which support entrepreneurs via programs and small grants.
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