Pakistan’s startup ecosystem hit a major funding roadblock in 2024, with venture capital investment nosediving by a staggering 70%. However, while VC funding shrank, signs of resilience are emerging in the form of larger deal sizes and a booming tech export sector. Let’s break it all down 👇
📉 Funding Falls Off a Cliff
According to insights from Data Darbar, startup funding in Pakistan fell from $75.8 million in 2023 to just $22.5 million in 2024 — the lowest in years.
Key Stats:
- 📉 Total VC funding: $22.5M (↓ 70%)
- 🤝 Number of deals: 15 (↓ 61% from 39)
- 💰 Average deal size: $3.75M (↑ 68%)
- ⚖️ Median deal size: $3.1M (↑ 158%)
👉 This suggests that investors are becoming more selective, backing fewer startups but writing bigger checks for the ones they do believe in.
🧪 Early-Stage Startups Lead the Way
The funding landscape in 2024 was dominated by early-stage rounds:
- 🧬 Pre-Series A: 48% of total disclosed funding
- 🌱 Seed-stage: 38%
- 🚀 Series A: 14% (↓ from 25% in 2023)
- 🚫 Series B: No deals in 2024
This trend reflects investor caution, with most capital flowing into startups still in their formative phases.
🚺 Gender Disparity Widens
The gender gap in funding remains a critical issue:
- 👨 Startups founded by men: 75.6% of funding
- 👩🤝👨 Mixed-gender teams: 24.4%
- 🚫 Women-only founded startups: 0%
This highlights an urgent need to level the playing field and encourage more female representation in entrepreneurship and VC funding.
🏦 Debt Financing Steps In
With equity investment drying up, debt financing offered some relief, totaling $20.5 million across 28 deals.
Top Sectors by Debt Share:
- 💸 Fintech: 46.7%
- 🛒 E-commerce: 37.8%
- 🏘️ Real Estate: 8.9%
- 🌱 CleanTech: 6.7%
🔄 Mergers & Acquisitions Slump
The M&A scene also took a hit, with only 5 deals in 2024, compared to 9 in 2023 and 17 in 2022.
- 🏠 Domestic deals: 80% in 2024 (a reversal from past cross-border trends)
- 🛠️ Product-based companies: 14 M&As (2020–2024)
- 🧾 Service-oriented firms: 18 M&As
- 🔄 Mixed models: 6 M&As
From 2020 to 2024, a total of 38 M&A transactions were recorded, with 25 cross-border and 13 domestic.
📈 Tech Sector: A Beacon of Growth
Despite the funding slump, Pakistan’s ICT (tech) sector posted impressive growth in 2024.
🔥 Highlights:
- 🚀 ICT sector growth: 8.5% (vs. 1.73% overall GDP growth)
- 💻 ICT exports: $3.6B (↑ 33.7% YoY)
- 📊 Computer services: $3.1B (↑ 38.5%)
- 📰 Information services: $22.4M (↑ 341.5%)
- 📞 Telecom services: $550M
This shows strong international demand for Pakistan’s tech talent and services — a bright spot amid a slow investment year.
💡 Final Takeaway
Pakistan’s startup space is navigating a challenging phase, with investors adopting a wait-and-see approach. But the rise in deal sizes and stellar performance of the export-driven tech sector signal a potential rebound — especially if macroeconomic stability returns.
🚀 The bottom line?
Quality is beating quantity, and while the ecosystem may be down, it’s certainly not out.
