Jan 09, 2024
Caretaker Information Technology Minister Dr Umar Saif announced the launch of the Pakistan Startup Fund (PSF) Tuesday, aiming to revitalise entrepreneurial activities in the country following a challenging year.
The initiative plans to allocate Rs2 billion annually towards supporting startups, offering equity-free capital to assist in securing venture capitalist (VC) rounds, and securing initial external investments for fledgling businesses.
The establishment of the PSF comes in the wake of a lacklustre period for Pakistani startups.
In 2023, these startups collectively garnered just over $70 million in funding, marking a staggering decline of more than 70% compared to the substantial investments witnessed in 2021 and 2022, as reported by independent monitoring firms.
Dr Saif took to the social media platform X to announce the PSF's launch, emphasising its role in injecting up to Rs 2 billion annually into Pakistani startups.
He detailed how the fund aims to assist local startups seeking foreign VC investments, enabling them to secure $1 million with the VC contributing $700,000 while receiving a grant of $300,000 from the Pakistan Startup Fund to facilitate closing the funding round.
Assuring startups, Dr Saif clarified that the government would not seek any ownership or board positions in return for the provided funding.
The PSF is strategically designed to mitigate risks for international investors considering an investment in Pakistani startups, the minister said.
He reassured that once the funds are allocated to startups, there will be no undue interference from the government's end.
Highlighting the ambitious goal of the PSF, Dr Saif outlined the aspiration to generate an annual value of at least Rs 50 billion within Pakistan's startup ecosystem through this initiative.
Anticipating a more promising outlook for local startups in 2024, Pakistani funding monitors remain optimistic, particularly after the upcoming general elections.
They expressed confidence in Pakistan's economic recovery and the electoral announcement, suggesting a restoration of investor confidence that is expected to elevate the country's startup landscape.
