The Pakistan Startup Fund (PSF), launched to facilitate startup investment, will commence accepting funding applications from March onwards.
The development was shared by Dr Umar Saif, Caretaker Minister of IT & Telecom, and Science & Technology, in a post on social media on Wednesday.
“Pakistan Startup Fund – designed to facilitate Pakistani startups to close early stage VC funding round – will start accepting funding applications in March,” he said.
Under the PSF, launched just days ago by the caretaker minister, the government will invest up to Rs2 billion a year in the startup sector.
“The PSF is designed to help a startup raise its first external investment,” Dr Saif had said during the launch of PSF.
Last year in October, Dr Saif, in a conversation with Business Recorder on the sidelines of GITEX GLOBAL 2023, said the caretaker government is establishing a ‘Pakistan Startup Fund’, using revenue from IGNITE – which in turn is funded by a portion of the federal government’s telecom receipts.
“We will use IGNITE, which gets a portion of the telecom revenue and a few billion rupees go into it every year,” Dr Saif had told Business Recorder at the Dubai World Trade Centre.
“This funding will be converted into a ‘Pakistan Startup Fund’.”
Dr Saif back then said the government would then become the “last check of equity-free capital in a venture capital round”.
What is PSF?
The PSF is structured as an equity-free capital to help close a VC (Venture Capital) round for a startup.
“If you are a startup in Pakistan and a foreign VC is evaluating your startup for a $1 million investment, the VC only needs to invest $700,000 — the Pakistan Startup Fund will give you a grant of $300,000 to help close the round,” Dr Saif had said while explaining the PSF.
“We won’t take any equity/shares in your startup or a board position etc.
“PSF is designed to lower the risk for international investors to invest in Pakistani startups; once we have written you a cheque, we won’t hassle you at all .. betting on you and your VC investors to drive your success,” he added.
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