The Pakistan Startup Fund (PSF), an initiative aimed at catalyzing startup investments, is set to kick off its funding application process starting from March, according to Dr. Umar Saif, the Caretaker Minister of IT & Telecom, and Science & Technology. The announcement was made through a social media post on Wednesday.
Dr. Saif highlighted the PSF’s purpose, stating that it is designed to assist Pakistani startups in securing early-stage venture capital funding. Launched just days ago, the PSF is backed by the government, pledging an annual investment of up to Rs2 billion into the startup sector.
During the launch event, Dr. Saif emphasized the PSF’s role in helping startups secure their initial external investments. Last October, he had revealed plans to establish the ‘Pakistan Startup Fund,’ utilizing revenue from IGNITE, which is funded by a portion of the federal government’s telecom receipts.
The PSF functions as equity-free capital, aimed at facilitating the closure of a Venture Capital (VC) round for startups. Dr. Saif explained that if a foreign VC is evaluating a Pakistani startup for a $1 million investment, the VC would only need to invest $700,000, with the PSF providing a grant of $300,000 to support the round.
He emphasized that the PSF does not take any equity or shares in the startup or occupy a board position. The fund is strategically designed to reduce the risk for international investors looking to invest in Pakistani startups. Once the PSF provides financial support, it aims to offer hassle-free support, betting on the success of startups and their VC investors.
This initiative marks a significant step towards fostering innovation and growth within the Pakistani startup ecosystem, encouraging both local and international investments in the burgeoning startup landscape.
