KARACHI: Invest2Innovate (i2i) has officially released the Pakistan Startup Ecosystem Report 2024 (PSER 2024), marking the fourth edition of its flagship initiative.
Launched on Thursday, the report brought together prominent leaders from Pakistan’s entrepreneurial ecosystem, investors, policymakers and other key stakeholders. The report comes at a crucial time for the ecosystem, which has undergone a significant reset following the funding boom of 2021-22. With investments plummeting from $355 million in 2022 to just $37 million in 2024 (as of November), the focus has shifted from rapid growth to building sustainable, profitable businesses grounded in solid unit economics.
“Since 2014, i2i has been benchmarking the Pakistan startup ecosystem, tracking both historic highs and more challenging periods,” said Kalsoom Lakhani, founder of i2i. “This year’s report not only examines the data behind this challenging time but also the reasons for it and how founders are adapting. Pakistani founders are among the most resilient in the world, and 2024 proves this once again.”
The report was authored by i2i’s Head of Insights Amna Masood and her team, under the guidance of i2i CEO Sarah O Munir. It is based on interviews with over 60 industry stakeholders and three targeted surveys for investors, officials from entrepreneurial support organisations (such as incubators and accelerators) and startup founders. The findings are further supported by comprehensive secondary research.
“The lack of credible, data-driven research has been a persistent challenge for stakeholders in Pakistan’s entrepreneurial ecosystem,” said Sarah O Munir, CEO of i2i. “This report aims to fill that gap, offering actionable insights to help Pakistan unlock its full potential on the path to innovation.”
The report highlights Pakistan’s vast potential, driven by a population of 241.5 million, 65 per cent of whom are under 30. The growing digital adoption and rising IT exports, which reached $3.2 billion in FY24, showcase the opportunities for innovation and expansion.
Sectors such as fintech, e-commerce and cleantech continue to attract attention, with fintech securing $30.5 million of the total startup funding in 2024. The report also celebrates major achievements, including SadaPay’s acquisition by Turkey’s Papara (valued at around $2 billion), PostEx’s $7.3 million pre-Series A funding, and COLABS raising $2 million to expand into the MENA region.
However, PSER 2024 also draws attention to persistent challenges that hinder ecosystem growth. Issues such as gender disparity, with women comprising only 39 per cent of the workforce and receiving just 18.75 per cent of total startup funding since 2015, are compounded by brain drain and infrastructure gaps. Connectivity remains a significant hurdle, with 47 per cent of the population lacking internet access and frequent disruptions causing an estimated $238 million in losses in 2023.
Regulatory complexities, low R&D investment (0.16 per cent of GDP vs a global average of 2.62 per cent), and limited access to capital further strain the ecosystem’s potential.
Despite these hurdles, the report identifies emerging opportunities, such as the digital economy’s potential to generate Rs9.7 trillion in value by 2030. It emphasises the need for coordinated action from all stakeholders, including harmonising regulatory frameworks, improving infrastructure and providing targeted support for women entrepreneurs.
