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Pakistan’s Tech ecosystem Is Booming: Raises $163 Million During First Three Months of CY2022

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Pakistan’s economy has been battered by rising inflation, COVID, supply chain shocks and high energy prices over the last few years. But in that world of constant shocks, its booming startup sector is turning out to be a silver lining for the country.

Startups in Pakistan, one of the last untapped frontier markets, raised $163m during the first three months of CY2022.

According to General Partner i2i Ventures Kalsoom Lakhani, this is seven times the amount raised in the same period last year, and more than 50 percent of the total investment raised during CY2021.

The Invest2Innovate Insights data states that most of the amount was collected through large later-stage rounds, mostly achieved by the B2B e-commerce startups such as Bazaar which raised $70 million in a Series B round, Retailo’s $36 million Series A, and Jugnu’s $22.5 million Series A.

Ms. Lakhani tweeted, “Fact that B2B e-commerce players raised later stage rounds is a strong signal for the PK market, esp given concerns around a “cooling off” or a dearth of growth-stage capital”.

Commenting on the Fintech performance she further said that the Fintech sector performed well during the quarter, albeit primarily through earlier stage deals, such as NayaPay’s $13 million seed. She noted that like other emerging markets, a “triangle” of funding has been observed, and e-commerce, fintech, and logistics made up the total raised as these sectors have a “symbiotic relationship”.

With more than 250 startups since 2015, and increasing internet penetration driven by low-cost smartphones – there were 184 million cellphone users at the end of 2021 – and affordable data, Pakistan is one of the final few untapped markets for startups and investors to offer internet-based services similar to those in other parts of the world. These services include ride-hailing, and food and grocery delivery, among others.

Pakistani startups have raised a total of $563.5 million across 255 deals since 2015 with $350 million raised via 83 deals in 2021 alone, accounting for over 60 percent of all deals completed within the past seven years.

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