Govt. Earmarks Rs 2b For Pakistan Startup Fund

In a significant development, the government of Pakistan has earmarked Rs 2 billion for the Pakistan Startup Fund. The government is aiming to bolster venture capital investment within the country. According to the IT Ministry, this fund will expand financial support to startups. It will allow each startup to receive 30% backing. On the other hand, venture capitalists will contribute the remaining 70% of the capital. This initiative is tipped to significantly contribute to Pakistan’s economic growth.

Govt. Aims To Bolster Venture Capital Investment Via Pakistan Startup Fund

According to the latest reports, the government has revealed a 3% Research and Development (R&D) incentive for the local handset manufacturing industry. It will help boost mobile phone production domestically. This incentive is planned to improve the industry’s global competitiveness in terms of pricing. Moreover, the government also aims to introduce a strategy for manufacturing components within Pakistan. It will help in making locally produced phones more budget-friendly as compared to imported ones through a tariff-differential policy.

The official further highlighted the potential of Pakistan’s cellular market. He said that Pakistan ranks as the seventh-largest market for cellular users globally, bragging 191 million cellular connections. He remarked:

“However, we import most of our mobile phones. We need to manufacture them locally and develop an industry to export made-in-Pakistan phones”

For all those unaware, PSF is structured as equity-free capital to help in concluding a VC (venture capital) round for a startup. If you are a startup in Pakistan and a foreign VC is evaluating your startup for a $1 million investment, the VC only needs to invest $700,000. On the other hand, the Pakistan Startup Fund will give you a grant of $300,000 to help close the round. The startup fund has been designed to lower the risk for international investors to invest in Pakistani startups.