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Invest2Innovate (i2i) has released its highly anticipated Pakistan Startup Ecosystem Report 2024 (PSER 2024), which provides a novel viewpoint on the current status of entrepreneurship in the country. The report for this year is released at a critical juncture in the development of Pakistan’s startup scene.
The ecosystem is undergoing a substantial transformation due to the funding mania of 2021-22, which resulted in record-breaking investments. By November 2024, investment inflows had decreased from $355 million in 2022 to a mere $37 million.
“Since 2014, i2i has been benchmarking the Pakistan startup ecosystem, tracking both historic highs and more challenging periods,” said Kalsoom Lakhani, founder of i2i. “This year’s report not only examines the data behind this challenging time but also the reasons for it and how founders are adapting. Pakistani founders are among the most resilient in the world, and 2024 proves this once again.”
Under the supervision of i2i CEO Sarah O Munir, the report was composed by Amna Masood and her team, who serve as the organization’s Head of Insights. It is the result of three targeted surveys for investors, officials from entrepreneurial support organizations, and startup entrepreneurs, as well as interviews with more than 60 industry stakeholders.
“The lack of credible, data-driven research has been a persistent challenge for stakeholders in Pakistan’s entrepreneurial ecosystem,” said Sarah O Munir, CEO of i2i. “This report aims to fill that gap, offering actionable insights to help Pakistan unlock its full potential on the path to innovation.”
The report emphasizes Pakistan’s immense potential, which is propelled by a population of 241.5 million, of which 65% are under the age of 30. The opportunities for innovation and expansion are exemplified by the increasing digital adoption and IT exports, which amounted to $3.2 billion in FY24.
Fintech, e-commerce, and cleantech sectors continue to garner interest, with fintech accounting for $30.5 million of the total startup funding in 2024. The report also commemorates significant accomplishments, such as SadaPay’s acquisition by Turkey’s Papara (valued at approximately $2 billion), PostEx’s $7.3 million pre-Series A financing, and COLABS’s $2 million fundraising to expand into the MENA region.
PSER 2024 highlights key challenges hindering ecosystem growth, including gender disparity, with women making up 39% of the workforce and receiving only 18.75% of startup funding since 2015. In 2023, the brain exodus, infrastructure gaps, and inadequate connectivity, which collectively impacted 47% of the population and resulted in $238 million in losses, also posed substantial obstacles.
Furthermore, the ecosystem is further burdened by regulatory issues, low R&D investment, and restricted access to capital. However, the report anticipates that the digital economy will generate Rs9.7 trillion in value by 2030, and it underscores the necessity of uniting efforts to confront these obstacles.
