Pakistani startup ecosystem saw impeccable growth in the year 2021, fetching a combined total of $375 million. To give you a glimpse, in the year 2021 Pakistani startups were valued at over $1.5 billion, which isn’t just 450 percent higher than the combined total of only $66.44 million generated by local startups in 2020 but it’s also double the cumulative investments secured during the last six years. The number of deals closed also witnessed a surge of 67 percent, jumping from 49 in 2020 to 82 in the year 2021.
The COVID-19 pandemic has accelerated digitization in many industries and as per the data shared by the startup investment advisory platform Alpha Beta Core, the startups secured the largest share in the logistics sector raising 32% of total funding in 2021, followed by e-commerce at 27% and fintech at 25%. Investment in health tech and edtech startups shared a combined total of 4% in the outgoing year.
Recent data from Invest2Innovate (I2I) — an organization that keeps track of funding flows to startups, reports that Pakistani startups successfully closed 81 investment deals in the previous fiscal year, as compared to 174 deals worth $231 million closed during the past 5-year tenure combined, i.e., between 2015 to 2020.
The data readily suggests that investment activity for the year 2021 had been dominated by the startup culture in the country. Startup investment stood at $19.26 million after closing 13 deals during Q1 and then at $81.73 million after closing 18 deals in Q2. Up until Q3, Pakistani startups raised $173 million across 17 deals, bringing the total to $273.9 million across 48 deals.
Sector-wise, e-commerce dominated the fundraising landscape, ranking at $174.6m across 20 deals. However, almost half of the raised capital came in from a single startup — Airlift.
Airlift technologies, closed a Series B funding round of $85 million back in August last year, which was reported to be the largest acquisition secured in the startup history of the country. Another startup, Bazaar, a B2B marketplace, across two rounds raised $30 million while Tajir raised $17 million and TAG, a fintech startup, raised $17.5 million.
Kalsoom Lakhani, General Partner i2i Ventures, shared the stats of the shift that the startup landscape of Pakistan witnessed in the year 2021 on Twitter.
Other startups that raised a capital of $10million or more in the previous year include Jabberwock (Cheetay) that raised $18m, QisstPay which secured $15m, Creditbook which secured $12.5m and Bridgelinx that raised $10m. Collectively, all the mentioned companies accounted for 57.85pc of all the invested capital.
Industries other than e-commerce, fintech and logistics also saw somewhat similar growth in investment. We further saw the online travel and ticketing platform Bookme, and Bagallery, a beauty and fashion startup raising $7.5 million and $4.5 million respectively in Series A rounds. While, in another pre-seed funding round, Krave Mart, the first to introduce quick-commerce in Pakistan, also raised $6 million.
The year 2021 lured in some of the most notable investors into the Pakistani market, including Tiger Global, Kleiner Perkins, Global Founders Capital, and Stripe. Moreover, as per experts speculations, the funding craze will continue to grow in 2022, since there’s still a huge untapped market gap in Pakistan that need attention and a viable business model.
New themes to look for in 2022 are health tech, to provide access to quality health care especially during the pandemic, edtech businesses to make online education accessible to millions of children around the country and fintechs to help address Pakistan’s undocumented economy that accounts for 75 percent of the presently unbanked population.