After a nosedive in funding quarter on quarter throughout 2022, startup funding in Pakistan was slightly better in the first quarter of 2023 (1QCY23). According to the insights presented by i2i, Pakistani startups raised $23 million during 1Q of 2023 across 7 publically disclosed deals. This amount was up by 55 percent versus the fourth quarter of 2022, but down by 86 percent versus similar quarter last year (1QCY22).
While the quarter-on-quarter improvement in startup funding is welcomed, the latest insights also show that the capital raised by startups in Pakistan was the lowest in the region due to the economic instability in the country. The whole quarter was a weak quarter where funding was negligible in January only to catch up to 2021 levels in March with deals that were mostly hangover from 2022 according to the blog – Techshaw.
The analysis presented by the blog shows that 72 percent of all the funding during 1QCY23 is attributable to the deals closed in 2022 but announced in 2023, which means there has been a dearth of new deals in 2023. And a key factor that the analysis presents to have solidify the trend in funding in startups including that in Pakistani has been the move away of the US from Zero-interest-rate-policy to higher rates.
The sector that merged at the top in attracting funds was the Logistics sector followed by the fintech sector startups. And the i2i insights also show that the female-founded and co-founded startups had negligible share in total funding raised during the quarter. Interestingly however, the analysis also shows that the number disclosed deals by the international angel investors increased year-on-year in 1QCY23 with resilient merger and acquisition activity, which i2i highlights as an indication of continued investor interest in the country’s pre-seed and seed stage funding despite the regional and macro level troubles – also a sign of hope as the startup’s sector navigates the choppy waters.
