The Pakistan Startup Ecosystem Report 2024 (PSER 2024) by Invest2Innovate (i2i) highlights the resilience of Pakistani founders in a challenging global environment while pinpointing key opportunities and barriers for the country’s entrepreneurial growth.
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 captures 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 (up to November), reflecting a shift from aggressive scaling to sustainable business practices.
Kalsoom Lakhani, i2i founder, emphasized the ecosystem’s evolution, stating, “This year’s report examines the data behind these challenging times, the reasons for them, and how founders are adapting. Pakistani founders’ resilience stands out globally, and 2024 underscores this trait.”
The report was authored by Amna Masood, i2i’s Head of Insights, and her team, under the guidance of CEO Sarah O Munir. Based on interviews with over 60 stakeholders and three targeted surveys, the findings offer a data-driven perspective on Pakistan’s entrepreneurial potential and challenges.
According to the report, Pakistan’s population of 241.5 million, 65% of whom are under 30, provides a strong demographic dividend for innovation. Rising IT exports, which reached $3.2 billion in FY24, and increased digital adoption further underscore the country’s potential.
Fintech, e-commerce, and cleantech remain key sectors, with fintech alone securing $30.5 million of total funding in 2024. Notable achievements include SadaPay’s acquisition by Turkey’s Papara, PostEx’s $7.3 million pre-Series A funding, and COLABS’ $2 million capital raise for regional expansion.
However, the report also highlights enduring challenges. Gender disparity remains stark, with women making up just 39% of the workforce and receiving only 18.75% of total startup funding since 2015.
Infrastructure limitations, such as internet access gaps affecting 47% of the population and causing an estimated $238 million in losses due to disruptions in 2023, impede progress. Additionally, regulatory bottlenecks, minimal R&D investment at 0.16% of GDP (compared to a 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. Connectivity hurdles persist, along with a lack of streamlined policies for startups, hindering growth potential.
PSER 2024 identifies significant opportunities for growth. The digital economy could generate Rs9.7 trillion in value by 2030. To unlock this potential, the report calls for targeted support for women entrepreneurs, improved infrastructure, and harmonized regulatory frameworks.
“This report aims to fill the gap in credible, data-driven research for stakeholders to unlock Pakistan’s innovation potential,” said Sarah O Munir, CEO of i2i.
The findings provide a roadmap for transforming Pakistan’s startup ecosystem into a robust and sustainable contributor to the economy, capable of leveraging its youth, innovation, and digital growth for long-term success.
