Funding in Q4, 2024: USD 26.5 mn (Oct, Nov, Dec)
(Total Funding in 2024: USD 42.5 mn)
The fourth quarter of 2024 witnessed significant developments in the startup ecosystem, including the launch of the Pakistan Startup Ecosystem Report (PSER 2024), which mapped the ecosystem for the years 2022, 2023, and 2024. This followed the publication of the previous reports, PSER 2021, 2019, 2016 and 2014, which mapped the ecosystem for earlier years. The quarter also recorded the year’s largest deal, with Abhi—a fintech company—securing USD 15 million in funding led by Shorooq Partners and Amplify Growth.
The quarter also saw the launch of Shark Tank Pakistan. Amid the endless stream of family dramas revolving around traditional themes like family politics and long-suffering women, Shark Tank Pakistan offers a refreshing change by promoting entrepreneurship and providing a much-needed boost to the country’s startup ecosystem.
Meanwhile, macro-economic indicators also improved as the interest rate fell to its lowest level in two years, dropping to 13% in response to declining inflation. The inflation rate also reached a 6.5-year low of 4.9%.
Pakistan’s economic outlook has been gradually improving. According to the Asian Development Outlook (ADO) report released in September, Pakistan’s economic growth was projected at 2.8% for fiscal year 2025, subject to domestic and external risks. However, the ADB’s updated ADO report in December revised the growth projection to 3%.
Q4 Funding Overview
Pakistani startups raised USD 26.5 mn in Q4, 2024 across four publicly disclosed deals, marking a significant 76.7% increase compared to Q3, 2024. Q4 alone contributed 62% of the total funding raised in 2024.
Despite this growth, the figure was 30% lower than Q4 2023, when Pakistani startups secured USD 38 mn. The total funding in 2024 was 42.5% lower than 2023’s USD 74 mn. However, the global trend has been different.
According to Dealroom, global VC funding in Q4 stood at USD 93 bn, reflecting a 28% increase compared to Q4 2023, when global funding stood at USD 72.65 bn. Q4 funding was also 29% higher compared to Q3 2024. Dealroom has projected that global funding in 2024 will reach USD 336.5 bn, 7% higher than in 2023, which was recorded at USD 313.6 bn. Two deals with undisclosed amounts have also been reported.
Despite a positive shift in global VC funding, this pattern is not reflected locally. The hike in global funding was largely driven by an 82% increase in funding for AI, which rose from USD 55 bn in 2023 to USD 100 bn in 2024 (data as of December 17) according to Crunchbase. Meanwhile, Pakistan faced political instability and infrastructural challenges, such as electricity and connectivity issues, which are some of the factors contributing to reduced funding.
Two deals with undisclosed amounts—one involving Farmdar and the other Kravemart—were also announced during the quarter. Accelerate Prosperity announced an investment in SOC Vault, a cybersecurity startup focused on delivering cost-effective security solutions for small and medium-sized enterprises (SMEs). It also invested in Davaam, a startup transforming FMCG distribution with eco-friendly dispensing solutions that reduce plastic waste and costs.
Reported Deals in Q4 2024
October:
- Colabs secured USD 2 mn in a Pre-Series A funding round led by Shorooq Partners, marking a significant milestone for the coworking space startup.
- Abhi raised an impressive USD 15 mn through a credit financing round, also led by Shorooq Partners, further solidifying its position in the fintech space.
- Farmdar, an agritech startup, completed its Pre-Series A round with an undisclosed amount, led by Moment Ventures. Farmdar’s funding was the only deal to involve a local investor, with Indus Valley Capital participating alongside the international lead.
November:
- Neem, an embedded finance platform, raised a USD 4 mn credit facility from South Africa-based DNI Group to expand its Earned Wage Access (EWA) solutions.
December:
- Laam Technologies, an E-commerce startup founded in 2021 to promote South Asian fashion locally and globally, raised USD 5.5 mn in seed funding to enable it to invest in agentic (AI) capabilities and hire workforce in major markets.
- Krave Mart, an E-commerce grocery delivery platform raised an undisclosed amount from inDrive (via its new venture arm) for potential expansion into emerging markets.
Highest Funded Sectors
In Q4, the fintech sector attracted the highest funding, securing USD 19 mn, which accounted for 72% of the total funding raised. E-commerce followed with 21%, driven by Laam’s USD 5.5 mn funding round.
Fintechs also emerged as the top-funded sector for the year 2024, raising USD 30.5 mn—representing nearly 72% of the total USD 42.5 mn raised. Historically a leading sector, e-commerce accounted for 20% of the total funding in 2024, securing USD 8.5 mn.
Founder Gender Diversity
During Q4, male-founded startups dominated funding, securing 64% of the total USD 26.5 mn raised. The remaining 36% went to female-cofounded startups. Notably, no female-founded startups received publicly disclosed funding in Q4 or throughout 2024.
New Funds
Gobi Partners, a leading pan-Asian venture capital firm, has also officially announced the USD 50 mn Techxila Fund II. The launch of the second fund builds on the success of Gobi’s first Pakistan-focused venture capital fund, which has invested in 22 startups to date.
It aims to empower startups in Pakistan, with a focus on high potential sectors such as fintech, e-commerce, logistics and supply chain, health tech, and SaaS.
The Climaventures Fund, launched by Sarmayacar received USD 15 mn anchor funding from the UN’s Green Climate Fund (GCF), with plans to raise a total of USD 40 mn fund. The fund will focus on startups working in sectors like energy, recycling, e-mobility, and agritech. Sarmayacar has already targeted 15-20 ventures from a pool of 200 potential candidates.
Investor Confidence:
Investor confidence is showing a noticeable improvement compared to previous quarters, as evidenced by the significant increase in funding on a quarter-on-quarter basis. This uptick aligns with improving economic fundamentals, including a sharp decline in inflation and a reduction in interest rates, both of which create a more favorable environment for investment and growth. However, political instability and unexplained internet outages will remain a concern and could pose challenges to sustaining this positive momentum.
Looking Ahead:
As we move into the first quarter of 2025, there is a sense of cautious optimism within the ecosystem. This optimism is fueled by falling interest rates and improvements in key economic indicators, such as the KSE-100 index surpassing the psychological 100,000-point mark. The hope is that these positive developments will translate into increased deal activity in Q1 2025.