Invest2Innovate (i2i) has launched the fourth edition of its flagship initiative, the Pakistan Startup Ecosystem Report 2024 (PSER 2024). The report was introduced at a high-profile event attended by investors, policymakers, and leaders from Pakistan’s entrepreneurial ecosystem.
This year’s report comes at a pivotal moment for Pakistan’s startup landscape. After the funding boom of 2021-22, investments have declined sharply—from $355 million in 2022 to just $37 million in 2024 (as of November). This shift has steered the ecosystem toward prioritizing sustainable growth and profitability, with a focus on strong unit economics.
Highlighting Resilience and Adaptability
Kalsoom Lakhani, founder of i2i, reflected on the journey of the startup ecosystem, stating, “Since 2014, i2i has been benchmarking Pakistan’s startup ecosystem, documenting its highs and lows. This year’s report digs deep into the challenges and how founders are adapting. Pakistani entrepreneurs have shown incredible resilience, and 2024 further proves their determination.”
Led by i2i’s CEO, Sarah O. Munir, and authored by Head of Insights Amna Masood and her team, the report features interviews with over 60 industry stakeholders and data from surveys designed for investors, founders, and entrepreneurial support organizations. It also incorporates extensive secondary research.
“The lack of reliable, data-driven research has been a persistent challenge for Pakistan’s entrepreneurial landscape,” noted Munir. “PSER 2024 bridges that gap, offering actionable insights to help stakeholders unlock Pakistan’s innovation potential.”
Key Findings of PSER 2024
The report showcases Pakistan’s immense opportunities, driven by its young population of 241.5 million, with 65% under 30. Rising digital adoption and growing IT exports, which reached $3.2 billion in FY24, underline the country’s innovation potential.
Fintech leads the way, securing $30.5 million of the total $37 million raised in 2024. Notable milestones include:
- SadaPay’s acquisition by Turkey’s Papara, valued at ~$2 billion.
- PostEx’s $7.3 million pre-Series A funding round.
- COLABS raising $2 million for regional expansion into MENA.
Addressing Persistent Challenges
The report identifies several critical barriers:
- Gender disparity: Women constitute only 39% of the workforce and have received just 18.75% of startup funding since 2015.
- Limited connectivity: With 47% of the population lacking internet access, frequent disruptions cost an estimated $238 million in 2023.
- Low R&D investment: Pakistan spends only 0.16% of GDP on R&D, far below the global average of 2.62%.
- Regulatory and funding challenges: Complex regulations and limited access to capital continue to strain the ecosystem.
Unlocking Future Opportunities
Despite the challenges, PSER 2024 identifies significant growth prospects. The digital economy could generate Rs. 9.7 trillion by 2030. To realize this potential, the report urges coordinated efforts to:
- Develop harmonized regulatory frameworks.
- Improve infrastructure and connectivity.
- Empower women entrepreneurs.
- Strengthen academia-industry linkages to address skill gaps.
- Foster local investment to counter declining international funding.
A Vision for Growth
PSER 2024 provides a clear roadmap to transform challenges into growth opportunities. It highlights the resilience of Pakistani entrepreneurs and charts a path for building a sustainable and inclusive startup ecosystem.
