Pakistani Startups Raise $32 million in First 4 Months of FY2024-25

Pakistan’s startups have once again attracted the attention of investors, securing $32 million in funding from various sources during the first four months of the current financial year. Local startups received $15 million in the first quarter and $17 million in October, according to Invest2Innovate. The investment climate for startups began to show promising signs of recovery, with three new deals in October totaling over $17 million. COLABS and Abhi (YC S21) secured $2 million and $15 million, respectively, while Farmdar raised an undisclosed amount. Shorooq Partners led both COLABS’s Pre-Series A and Abhi’s credit financing round, while Farmdar’s Pre-Series A was led by Moment Ventures. Notably, only one local investor, Indus Valley Capital, participated in a funding round this quarter, specifically in Farmdar’s Pre-Series A round. On the investment side, venture capital firm Sarmayacar secured a substantial $15 million from the UN’s Green Climate Fund, earmarked for startups combating climate change. Additionally, the month saw significant M&A activity, with TRAX merging with Secure Logistics Group Limited (SLGL) and Trikl being acquired by Elphinstone. Aly Fahad, a facilitator for the startup ecosystem, noted that startups succeeded in attracting funds due to the improving economic situation in Pakistan, following the resumption of the IMF program and positive Fitch Ratings for the country. Furthermore, the State Bank of Pakistan (SBP) reduced the policy rate to 15 percent as part of ongoing efforts to stimulate economic growth and manage inflation. This easing of monetary policy has improved access to credit and increased market liquidity. Additionally, the role of the Special Investment Facilitation Council (SIFC) is encouraging for attracting foreign direct investment (FDI) in the country, according to the CEO of Paklaunch. Venture capitalists and investors are optimistic about the improving economic situation and plan to fund startups in Pakistan, he added. At the recent Singapore FinTech Festival, overseas Pakistanis, investors, and tech companies highlighted various strong indicators of the Pakistani economy and pledged to collaborate with high-potential startups and fintech operators.