The Pakistan Startup Ecosystem Report 2024 (PSER 2024) released by Invest2Innovate (i2i) highlights the resilience of Pakistani founders in a challenging global environment while identifying key opportunities and barriers to entrepreneurial growth in the country.
The report, launched on Thursday, is the fourth edition of i2i’s flagship initiative and was presented during an event attended by investors, policymakers and stakeholders from Pakistan’s startup community.
It depicts the transformation of Pakistan’s startup ecosystem, which has seen investments decline by 89.58% from $355 million in 2022 to $37 million in 2024 (until November), reflecting a shift from aggressive expansion to sustainable business practices.
Stressing on the evolution of the ecosystem, Kulsoom Lakhani, Founder of i2i said, “This year’s report examines the data behind these challenging times, their causes, and how founders are adapting. The resilience of Pakistani founders stands out globally, and 2024 underscores this trait.”
The report was authored by Amna Masoud, Head of Insights at i2i, and her team, under the guidance of CEO Sarah O. Mounir. Based on interviews with more than 60 stakeholders and three targeted surveys, the findings provide a data-driven perspective on the potential and challenges of entrepreneurship in Pakistan.
According to the report, Pakistan’s population of 241.5 million, 65% of whom are under the age of 30, provides a strong demographic dividend for innovation. Rising IT exports, which reached $3.2 billion in FY24, and increasing digital adoption underscore the country’s potential.
Fintech, e-commerce, and cleantech remain key sectors, with fintech alone securing $30.5 million in total funding in 2024. Notable achievements include Turkish startup Papara’s acquisition of SadaPay, PostEx’s $7.3 million pre-Series A funding, and COLABS’ capital raise of $2 million for the regional expansion company.
However, the report also highlights ongoing challenges. The gender disparity remains stark, with women making up just 39% of the workforce and receiving just 18.75% of all startup funding since 2015.
Infrastructure constraints, such as internet access gaps affecting 47% of the population and causing an estimated $238 million in losses due to disruptions in 2023, are holding back progress. In addition, regulatory bottlenecks, minimal R&D investment of 0.16% of GDP (compared to the global average of 2.62%), and restricted access to capital exacerbate these challenges.
The report also draws attention to brain drain, with an increasing number of skilled individuals leaving Pakistan in search of better opportunities. Communication barriers remain, along with a lack of streamlined policies for startups, hindering growth potential.
PSER 2024 identifies significant opportunities for growth. The digital economy could generate value of Rs 9.7 trillion by 2030. To unleash this potential, the report calls for targeted support for women entrepreneurs, improved infrastructure, and harmonized regulatory frameworks.
“This report aims to bridge the gap in reliable, data-driven research for stakeholders to unlock the innovation potential in Pakistan,” said Sarah O Munir, CEO, i2i.
The findings provide a roadmap to transform Pakistan’s startup ecosystem into a strong and sustainable contributor to the economy, able to leverage youth, innovation and digital growth for long-term success.