In yet another startup-focused initiative by the caretaker government, the Ministry of Information and Technology is set to launch BridgeStart, a program that aims to fund startups for participation in international incubators and accelerators, with an allocation that can go as high as Rs500 million per year.
In a Twitter post, the caretaker minister for IT & Telecom Dr Umar Saif said that the recently approved program will fund 100 startups each year to be incubated or accelerated in any of the top 40 incubators or accelerators all over the world.
The minister, who launched the Plan9 incubator of the Governemnt of Punjab while he was heading the Pakistan Information Technology Board (PITB), said that from the experience at Plan9 and National Incubation Centers (NIC) under IGNITE, “We observed that startups which were able to make it to incubators such as YCombinator, Capital Factory, 500 startups etc grew much more rapidly as they were able to successfully tap into a more developed ecosystem and sources of funding.”
“However, a lot of startups could not be part of such a program due to lack of resources for travel/lodging/expenses in a program abroad,” the caretaker minister said.
The minister stated that through BridgeStart, the government will give up to Rs5 million to a startup that was able to qualify for top 40 international programs. This translates into a budget allocation of as much as Rs500 million for funding 100 startups for such programs.
The caretaker setup under Dr Umar Saif has had a keen focus on building the startup ecosystem and has the backing of the Special Investment Facilitation Council (SIFC). In January this year, the caretaker minister launched the first ever Pakistan Startup Fund (PSF).
Under the PSF, the government said that it had allocated Rs2 billion to be invested in startups each year. One of the distinctive features of the Pakistan Startup Fund is its provision of equity-free capital, aimed at supporting startups in closing funding rounds, effectively lowering the risk for international investors seeking to invest in Pakistani startups.
If a foreign venture capitalist were to evaluate a Pakistani startup for a $1 million investment, they would only need to invest $700,000. The startup fund would then contribute a grant of $300,000, facilitating the completion of the funding round.
Dr Saif anticipated that this initiative will contribute significantly to the startup ecosystem, aiming to create a yearly value of at least Rs50 billion. Besides the PSF and BridgeStart program, Dr Saif’s numerous IT initiatives also include setting up 10,000 e-rozgar centres for freelancers and allowing IT companies to retain 50% of their earnings.