Startup Funding in Pakistan Drops by 95%, Stands at $5.2 Million

The second quarter of 2023 has not been kind to the startup ecosystem of Pakistan as the funding have significantly decreased. According to Data Darbar, the funding have reduced by 95% as compared to the previous year and shows a drop of 77.5% as compared to the previous quarter. The current startup funding in Pakistan is $5.2 million as compared to $104.1 million and $23.1 million in the previous year and previous quarter respectively. It all makes the second quarter of 2023 the worst in terms of performance.

Experts suggest that there are many factors that are responsible for the decrease in funding including the ongoing macroeconomic crisis, the fear of default that has made investors dubious, and the pending IMF deal. Though there is the hope of betterment if the deal is finalized anytime soon.

However, we should consider the fact that the global startup venture is also facing a tough time recently. The Crunchbase data reported that global funding stands at $22 billion as of May 2023, which is 44% less than the funding in the same period last year. Therefore, the investors are also reluctant in making decisions.

Renowned analyst, Sarwat Khan from Beta Core (ABC), told a local newspaper, “The scenario in Pakistan is not completely in isolation. Notably, the global venture funding landscape has also seen a slowdown during the same period.” He further said that the funding have decreased in global markets including US, UK, and China.

However, he said that the macroeconomic challenges of Pakistan are majorly responsible for the sharp decrease. Khan said, “Pakistan has endured what many consider its most challenging year yet, marked by the looming threat of default.”