Launch of Pakistan’s Startup Ecosystem Report 2019

Introduction: Unveiling the Report at 021 Disrupt Conference

Invest2Innovate, in collaboration with The World Bank, launched the 2019 Startup Ecosystem Report at Nest I/O’s 021 Disrupt Conference in Karachi on Sunday, November 3rd. The report, conducted via the Women Entrepreneurs Finance Initiative (We-Fi) of The World Bank, provides a comprehensive analysis of the startup landscape in Pakistan, focusing on finance, regulation, and gender dynamics.

Comprehensive Analysis: Methodology and Stakeholders

Data Collection and Research Methods

The findings of the report are based on both secondary research and primary data collected from four groups of stakeholders: digital entrepreneurs, investors, intermediaries, and policy reform advocates. A total of 161 individuals participated, offering diverse insights into the ecosystem.

Key Insights and Findings

The report also includes an analysis of deal flow data from 2015-2019, with a particular focus on the years 2018 and 2019. This data helps identify significant trends and challenges in the startup investment landscape.

Identifying the Gaps: Capital, Gender Disparities, and Regulatory Hurdles

Early-Stage Capital Gap

One of the primary findings of the report highlights the early-stage capital gap for digital startups in Pakistan. Many startups struggle to secure the necessary funding to scale their businesses.

Gender Disparities in Funding

The report reveals stark discrepancies in funding raised by women entrepreneurs compared to their male counterparts. Out of 96 deals between 2015-2019, only 24 (24%) were with women-led companies. Furthermore, only 4% ($6 million) of the total $154 million raised during this period went to women-led businesses.

Navigating the Tax Regime

Both investors and entrepreneurs face complexities in navigating the tax regime in Pakistan. The report details these challenges and offers recommendations for simplifying tax policies to better support the startup ecosystem.

Benchmarking and Comparative Analysis

Pakistan’s Position in the Global Ecosystem

The report compares Pakistan’s digital entrepreneurship ecosystem with other benchmark countries, providing an overview of where the country stands, its direction, and key learnings. This comparative analysis helps identify areas where Pakistan can improve and adapt best practices from other ecosystems.

Critical Insights from Stakeholders

Focus on Quality Over Quantity

Stakeholders, especially investors, indicated that many incubators focus too much on the number of startups they graduate rather than improving the quality of their companies. This insight suggests a need for incubators to prioritize developing robust, scalable businesses.

Detailed Analysis of Women Entrepreneurship

The report provides a detailed analysis of women entrepreneurship in Pakistan, which has not been conducted at this level of detail before. This analysis is crucial for understanding and addressing the gender disparities in the ecosystem.

Collaborative Efforts and Feedback

Roundtable Session in Islamabad

Last month, the report was workshopped during a roundtable session at the World Bank Office in Islamabad. Key stakeholders provided instrumental feedback, particularly in the tax policy section, helping refine the report’s recommendations.

Looking Ahead: Newsletter and Webinar for Wider Engagement

Report Insights Newsletter

i2i plans to release a Report Insights Newsletter to provide a brief overview of the key findings and highlight the most relevant figures for the general public. This newsletter aims to make the report’s insights accessible to a broader audience.

Webinar for In-Depth Understanding

Along with the newsletter, i2i will conduct a webinar session to improve understanding of the analysis and facilitate the application of recommendations. This session will be valuable for policy advocates and business support intermediaries.

Key Recommendations

Some of the key recommendations from the report include improving the regulatory environment to support startups and investors, increasing access to capital for early-stage startups, and incorporating best practices to provide more gender-equitable access to funding.

You can download the complete report here. Also check out the i2i newsletter for a quick, bite-sized overview of the report. Follow the hashtags #PSER2019 #i2iWBreportlaunch for snippets from the report on social media.