Pakistan Startup Fund Launching on Oct 31 to Supercharge Startup Investment

Get ready for a bold new chapter in Pakistan’s startup story: the Pakistan Startup Fund (PSF) will officially launch on 31 October 2025 at the National Incubation Center Islamabad (NIC Islamabad). The event marks the unveiling of a flagship initiative by the Ministry of Information Technology and Telecommunication (MoITT) and executed by Ignite. The fund is designed to electrify Pakistan’s startup ecosystem by bridging ideas, investors and opportunities.

With equity-free funding, global exposure, and one of the most startup-friendly mechanisms yet seen in the country, PSF is poised to become the final piece of the funding puzzle for Pakistani innovators.

What the PSF Does

Objectives & Structure

The Pakistan Startup Fund aims to:

• Empower early-stage Pakistani startups by providing equity-free grants after private investment is secured.

• Encourage both local and global venture-capital firms to funnel more investment into Pakistan by reducing the “last-mile” gap in funding.

• Let founders retain control: PSF takes no equity, holds no board seats, and plays no governance role in startups, thus freeing the private-sector partner (VC) to manage due diligence and operations.

How It Works

Here’s the step-by-step process:

1. A VC registers on the portal (via “startupconnect.pk”) to become a PSF partner.

2. PSF completes due diligence and whitelists the VC as a verified partner.

3. The VC invests in a Pakistani startup and closes the funding round.

4. After the private investment is confirmed, PSF disburses a grant equal to 10-30% of the VC’s investment in that round.

5. The startup receives this grant as the “last-cheque” in the funding round, closing the funding gap, with PSF playing a supportive but non-controlling role. This means that the startup must secure the full investment from the investor or VC before receiving the fund’s grant.

This model solves the persistent problem of struggling startups that face difficulties closing rounds because they reach the final stretch and fear falls off. By acting as a finishing partner, PSF signals to VCs that risk is reduced, making investments more likely.

Current Situation & Launch Dynamics

With the 31 October launch date set, PSF enters Pakistan’s ecosystem at a time ripe for innovation but also fraught with challenges. On the plus side, digital adoption continues to climb, and interest in Pakistan’s startup potential is rising. On the caution side: macroeconomic pressures, currency risk, and variable VC flows remain headwinds.

Future Impact: What This Development Means

Looking ahead, the PSF could reshape Pakistan’s startup landscape in several ways:

• Stronger alignment of public and private capital: By making the government effectively the “co-financier”, PSF will likely unlock rounds that might have stalled otherwise.

• Improved investor sentiment: Global and domestic VCs may feel more confident entering Pakistan if the “last cheque” guarantee exists.

• Better founder equity retention: Because PSF takes no equity or governance, founders keep a bigger stake and decision-making power, potentially improving retention and drive.

• Greater scaling and export possibility: As startups receive more complete funding and exposure, they may scale regionally or globally, bringing more capital and recognition back to Pakistan.

• Implementation risks remain: The success of PSF hinges on rigorous due diligence, timely disbursements, transparency, and the broader economic climate. PSF doesn’t eliminate currency risk, inflation or institutional challenges.

The launch of PSF on 31 October 2025 is more than just a funding programme; it is a statement of intent: that Pakistan is ready to power a new wave of startup growth. By acting as the “last cheque”, providing equity-free support and aligning private sector and government efforts, PSF could be a catalyst for meaningful change. For entrepreneurs, VCs and ecosystem stakeholders, this may well signal the beginning of a new era in Pakistan’s innovation journey.

ALSO READ: Ignite to Establish Women’s Innovation and Startup Lab in Pakistan