The Venture Capital Association of Pakistan (VCAP), a platform aimed at facilitating startups, expressed its concern over the ‘recent and indefinite’ suspension of mobile broadband service across Pakistan and urged the authorities to address the issue at the earliest.
“We are deeply concerned with the recent and ‘indefinite’ suspension of mobile broadband usage by the Pakistan Telecommunications Authority (PTA), as well as the restriction and blocking of social media platforms like Twitter, Facebook and YouTube,” read a letter dated May 11, 2023, and signed by Indus Valley Capital, i2i Ventures, Sarmayacar and Zayn Capital, the founding members of VCAP. A copy of the letter is available with Business Recorder.
“These restrictions have an immediate and adverse impact on Pakistan’s startups, which are reliant on such platforms for new user acquisition and growth,” read the statement.
The Pakistani government blocked mobile broadband and social media websites in the aftermath of Pakistan Tehreek-e-Insaf (PTI) Chairman Imran Khan’s arrest.
Protests erupted throughout the nation and some areas also witnessed violence due to which the government took the decision to suspend mobile broadband.
Meanwhile, VCAP, in its statement, said that the suspension of mobile broadband also “greatly impacts Pakistani citizens, who are mobile-first, and use these digital solutions for financial services, mobility, food, commerce, and more”.
It said Pakistani startups raised over $700 million in funding in 2021 and 2022.
“In the past year, however, Pakistan’s political and economic instability has contributed to a slowdown in international investor activity, and startups have only raised $25 million in funding this year so far, 15% of what was raised in Q1 2022,” it said.
VCAP said the government’s latest “platform restrictions and mobile broadband suspension will only add to these negative investor perceptions, and will dramatically impact Pakistani startups’ ability to raise capital, grow their businesses, and create jobs”.
“Our ability to support these companies is deeply hindered by these recent developments, and we ask the Government of Pakistan and relevant authorities to immediately lift these restrictions, to allow for commerce and startup activity to continue uninterrupted,” it added.
Pakistan’s battered economy is facing another stress-test with the arrest of former Prime Minister Imran Khan, with concerns over an impending default and delay in the International Monetary Fund (IMF) programme also driving negative sentiment among investors.