Pakistan Startup Ecosystem 2024: Insights, Challenges, and Opportunities
Invest2Innovate (i2i) has unveiled the fourth edition of its flagship initiative, the Pakistan Startup Ecosystem Report 2024 (PSER 2024). This comprehensive document highlights the evolving landscape of Pakistan’s entrepreneurial ecosystem and provides actionable insights for stakeholders.
Pakistan Startup Ecosystem 2024: Insights, Challenges, and Opportunities
The report was launched during an event at a local hotel. Key figures from Pakistan’s startup ecosystem, including entrepreneurs, investors, policymakers, and representatives of entrepreneurial support organizations, attended the event, which underscored the report’s importance as a tool for understanding the challenges and opportunities shaping Pakistan’s innovation landscape.
A Reset in Pakistan’s Startup Ecosystem
The release of PSER 2024 comes at a critical juncture. After the investment boom of 2021-22, when startups raised record-breaking funds, the ecosystem has faced a sharp contraction. Startup funding dropped from $355 million in 2022 to just $37 million by November 2024. This downturn has shifted the focus from rapid scaling to creating sustainable and profitable businesses based on robust unit economics.
“Since 2014, i2i has been benchmarking the Pakistan startup ecosystem through its highs and lows,” said Kalsoom Lakhani, founder of i2i. “This year’s report goes beyond the data, exploring the reasons behind the challenges and showcasing how resilient Pakistani founders are adapting to the new realities.”
Research-Driven Insights for Stakeholders
Guided by i2i CEO Sarah O. Munir, the report was authored by i2i Head of Insights Amna Masood and her team. It draws from interviews with over 60 industry stakeholders, surveys targeting investors, entrepreneurial support organizations, and founders, and extensive secondary research. The goal is to fill the longstanding gap in credible, data-driven insights for Pakistan’s entrepreneurial ecosystem.
“The absence of reliable research has hindered ecosystem growth,” said Sarah O. Munir. “This report aims to address that gap and provide stakeholders with the insights needed to unlock Pakistan’s full potential for innovation.”
Key Highlights of PSER 2024
The report emphasizes Pakistan’s immense potential, fueled by a young population of 241.5 million, increasing digital adoption, and growing IT exports, which reached $3.2 billion in FY24. Sectors like fintech, e-commerce, and cleantech continue to attract attention. In 2024, fintech secured $30.5 million of the total startup funding, with notable achievements including:
- SadaPay’s acquisition by Papara (valued at ~$2 billion)
- PostEx’s $7.3 million pre-Series A funding
- COLABS raising $2 million for regional expansion
Challenges Hindering Growth
Despite these successes, significant hurdles persist. Gender disparity remains a pressing issue, with women making up only 39% of the workforce and receiving just 18.75% of startup funding since 2015. Other challenges include:
- Limited internet access for 47% of the population
- Brain drain and skill gaps
- Low R&D investment at 0.16% of GDP (global average: 2.62%)
- Complex regulatory frameworks and limited access to capital
A Path Forward
The report identifies opportunities to transform these challenges into growth drivers. By 2030, Pakistan’s digital economy could generate Rs. 9.7 trillion in value. The report calls for coordinated efforts to harmonize regulations, enhance infrastructure, and support women entrepreneurs. Strengthening academia-industry linkages and promoting local investment are also essential to counter declining international funding.
The Pakistan Startup Ecosystem Report 2024 serves as a roadmap for fostering innovation and ensuring that Pakistan remains a vibrant hub for entrepreneurial growth.
See Also: Pakistani Startups Secure $32 Million in Early FY2024-25
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