A sprint, a slowdown, a concerted effort to resume, and a lull – that was the investment landscape of Pakistan’s startup ecosystem in 2022.
Calling it an unsuccessful year for startups in the country can be a little too reactionary. We often only judge how successful we’ve been through the metric of money raised; however, for all other intents and purposes, it has been a positively busy year!
Money Raised by Pakistani Startups in 2022
We had to get it out of the way. A record-breaking first quarter was followed by a not-so-happening 3 quarters, and in the end, the total money raised by startups in Pakistan in 2022 stands at:
Total Number of Funding Deals
The total number of deals reported from January 2022 to December 2022 were:
Of these 66 deals, only 53 were accounted for in our total raise valuation. 13 deals did not disclose an amount.
Top 10 Highest Raisers in Pakistan’s Startup Ecosystem
The biggest deals took place at the start of the year, in quarter 1. With each passing quarter, the money raised got lower and lower. We will dive into the reasons for that a little later.
The startups that raised the most money in 2022 were:
- Bazaar: $70 million (Series B)
- Dastgyr: $37 million (Series A) | “Largest Series A Round in Pakistan”
- Retailo: $36 million (Series A)
- Jugnu: $22.5 million (Series A)
- DBank: $17.6 million (Seed) | “Largest Seed Round in Pakistan”
- Abhi: $17 million (Series A)
- Revolving Games: $13.2 million (Seed)
- NayaPay: $13 million (Seed)
- MEDZnMORE: $11.5 million (Pre-Series A)
- OneLoad: $11 million (Series A)
As mentioned above, the investments slowed down as we progressed from quarter to quarter.
The first quarter saw the most activity. The most substantial raises also took place during this period, this includes the money raised by Bazaar, Retailo, and Jugnu.
The second quarter still dished out a respectable raise total; albeit, it spelled a significant slowdown from the first quarter. The most notable startups that raised in this quarter were SadaPay, MEDZnMORE, Dastgyr, and Abhi.
As the political and economic situation of the country got worse, foreign investors were dissuaded and local players became cautious. Most notable raisers: DBank, Revolving Games, and PriceOye.
The year ended with a whimper. Most notable raisers: Finja, Remotebase, and Waada.
The Sectors Raising the Most Funding
Across the board, locals and even foreign investors feel that Pakistanis must focus on bolstering its education, financial inclusion, and health capabilities. Having said that, neither of these were seen as the most attractive avenue for investment in the country.
First Foray into Pakistan
Among the several positives to take away from the ecosystem this year, one of the most exciting ones was the first-time investors showing interest in Pakistani startups.
- Dragoneer joined Tiger Global to give Pakistan its biggest investment raise in 2022 as part of Bazaar’s Series B Round of $70 million
- DBank’s $17.6 million raise was backed by Nubank, Rayn, and Askari Bank, alongside new entrants Sequoia
- PriceOye’s $7.9 million raise included several collaborators, including Mercury Bank’s Immad Akhud, Souq’s Asif Keshodia, and PayPal founder Peter Theil
- Sturgeon Capital showed its intent to support Pakistani startups through thick and thin, putting their investments in MEDZnMORE, Finja, and Abhi
Girls Just Wanna Raise Funds!
The women leading the charge in the startup ecosystem have built solutions in the realms of Fintech, Edtech, Healthtech, and Logistics, among others!
Tania Aidrus of DBank, Maha Shahzad of Bus Caro, Vladimira Briestenska of Neem, Meenah Tariq of Metric, Saira Siddiqui of MedIQ, Aiman Bashir of Outclass, Anusha Shahid of OkayKer, and Fatimah Zafar of Remoty. These are the women we’ve chosen to feature in this section.
Mergers and Acquisitions
Among the biggest causes for celebration was Digital Ocean’s purchase of CLOUDWAYS, signaling validation for Pakistani made products and services. The landmark deal amounted to $350 million.
We can attribute the slowing down of funding to several variables:
Local Economic Downturn
The macroeconomic situation of Pakistan has been borderline catastrophic. Pakistan’s credit default swaps have increased by more than 4x. This increase spans a 1500 basis point increase from last year, standing at over 2000 BPS this year.
Airlift was seen as the poster child of the Pakistani startup space, raising the country’s largest-ever Series B Round at $85 million. Unfathomably, the company had folded within a year of raising said funds.
SWVL and Vavacars had suffered a similar downfall, ceasing operations in the country. One can attribute these folds and exits to the precarious social-economic condition in the country; however, regardless of the reasons, it is not a good look for foreign investors.
Retailo and Truck It In have also scaled back and downsized in some capacity. Then there was the situation around TAG – the less we speak of it, the better.
With Imran Khan’s government unceremoniously ousted and a political coalition jostling for position, if there was any more need for instability, it came from here.
However, there is still much to look forward to!
According to Mutaher Khan, there are a few things to be excited about in-terms of strategic partnerships, going into the new year. Naveed Sherwani of Rapid Silicon and Duraid Qureshi of Hum Network have launched Pakistan-centric fund amounting to $50 million.
Additionally, 500 Startups and JS bank have also announced a collaborative effort towards providing better access to foreign and local capital.
Precarious situations almost always tend to bring out the best on people. As they say, tough times don’t last, tough people do! Katalyst Labs’ Founder and CEO, Jehan Ara echoed these sentiments:
“Economic downturns lead to entrepreneurs finding unique ways to create a wealth of innovative opportunities, resulting in job creation and a wave of transformation.”