Pakistani startups likely to see largest growth of funding in 2021: Report

Backed with impressive figures, Pakistan is showing strong signals of growth as an emerging startup hub revealed MAGNITT, the largest online community for startups across the MENA region titled 2021 Emerging Venture Markets Report.

As per the report, with a 45% increased deal flow and a 97% increase in funding, Pakistan saw a record level of investments in 2020 as compared to 2019, as it has seen increased interest from local, regional as well as international players in its Pakistani startupps.

As per the report, Venture Capital funding in Pakistan was up 97% to USD77 million. Whereas, total number of deals reached a new record at 48 transactions in 2020 up 45% from 2019. The year 2020 saw a record high level of VC funding for Pakistan when excluding the USD89mn CarFirst round in 2018 - 45% of funding came from a $22M Series A raised by Airlift Technologies and $13M Series B raised by Byke.

The report predicted that in 2021, Pakistan is likely to see the largest growth rate of total funding as it continues its strong growth trajectory.

“2020 proved that follow-on capital would flow to Pakistan quickly for startups that execute well. Airlift raised a large round, $12M, within just 7 months of us leading their initial rounds. Bykea raised a $13M series B round, led by Prosus. Many top VCs including First Round Capital, Prosus, Global Founders Capital, Village Global, Quiet Capital, GFC, YCombinator, Pioneer Fund have invested in Pakistan in 2020. We expect this trend to accelerate in 2021, as Pakistan crosses the 100M broadband subscribers milestone.”

“We’re focused on bringing the Pakistani diaspora, aka Wapistanis, back to the country to help the startup ecosystem in its next phase of growth,” said Aatif Awan, Founder & Managing Partner at Indus Valley Capital.

Among the sectors, the transport industry overtook E-Commerce in Pakistan by total funding, climbing 3 spots in the ranking while accounting for 28% of capital invested. In addition, E-Commerce ranked first by number of deals (33%), followed by FinTech (11%).

Talking about the quarterly development, the report stated that in a positive sign for the Pakistani ecosystem, despite COVID-19, VC funding and deals were up across all quarters, compared to 2019. Q3 ‘20 led the way for funding with $40M invested - Q3 ‘20’s record-high VC investment, was mostly due to $22M Airlift Technologies and $13M Bykea deals - In Q4, all 17 deals were at Early Stage, with the largest round being Healthcare Tech MEDZnMORE ($2.6M)