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.