The year 2024 marked a challenging yet promising period for Pakistan’s startup ecosystem. Despite global funding constraints and domestic economic hurdles, the sector demonstrated remarkable resilience, paving the way for recovery and growth. With improved macroeconomic conditions and innovative strategies, the ecosystem not only navigated the turbulence but also laid a strong foundation for a thriving future.
Pakistan’s economic landscape witnessed significant improvement in 2024, particularly in the latter half. The IMF’s $7 billion Extended Fund Facility (EFF) and a sharp 900 basis point policy rate cut by the State Bank of Pakistan catalyzed a recovery, bringing inflation down to 4.9%, the lowest in over six years.
A stabilized USD/PKR exchange rate and upgraded credit ratings further reinforced investor confidence. This fiscal discipline and structural reform created a favorable environment for startup investments, enabling the sector to begin its recovery.
In 2024, Pakistan’s startup ecosystem raised $43 million, with a notable 80% YoY increase in average deal size. The most significant growth occurred in Q4, which saw a 77% QoQ surge, driven by mature funding rounds like Pre-Series A and Series A.
Foreign investors accounted for 87% of total participation, signaling renewed confidence in Pakistan’s startups. E-commerce and fintech remained dominant, with innovations addressing financial inclusion and consumer needs in a rapidly digitizing economy. Deals such as InDrive’s funding of KraveMart reflected the strategic investments shaping the ecosystem’s future.
The revival of the IPO market was a standout achievement of 2024, with seven IPOs raising over Rs. 8 billion. This resurgence shifted focus from early-stage investments to mature, scalable businesses, underscoring investor preference for stability and growth.
Furthermore, mergers and acquisitions (M&A) gained momentum across sectors like power, oil marketing, and technology, driven by conglomerates and international firms. Key transactions, such as Saudi Aramco’s acquisition of Gas & Oil Pakistan Ltd., highlighted Pakistan’s appeal as a strategic investment destination.
The government’s proactive measures, including the launch of the Pakistan Startup Fund with Rs. 2 billion and collaborations like the Gobi Partners’ Techxila Fund II, have injected much-needed capital and confidence into the ecosystem.
Simultaneously, the rise of artificial intelligence (AI) funding globally has positioned Pakistan to tap into this trend. With IT exports growing by 25% in November 2024 and initiatives like the Skills Development Programme focusing on AI and data analytics, Pakistan is primed to capitalize on its tech talent and innovation potential.
The positive momentum from 2024 provides a solid base for 2025. Key sectors like fintech, e-commerce, healthtech, edtech, and AI are expected to drive growth, supported by anticipated political and economic stability.
Reduced inflation, lower capital costs, and an improved global outlook further enhance Pakistan’s investment appeal. With a clear focus on scalability, innovation, and investor confidence, the startup ecosystem is poised for a transformative year ahead.
Pakistan’s startup story in 2024 is one of resilience and recovery, proving that even in the face of challenges, the ecosystem remains a vital engine of innovation and growth. The lessons and gains of this year lay the groundwork for a brighter and more prosperous future in 2025 and beyond.
