Venture Capital - Pakistan

Pakistan

Highlights

Pakistan is projected to reach a Total Capital Raised of US$14.60m in the Venture Capital market market by 2024.
The Early Stage market is expected to dominate the market in Pakistan with a projected market volume of US$12.01m in 2024.
In global comparison, the United States is anticipated to generate the most Capital Raised, amounting to US$136.6bn in 2024.
Pakistan's Venture Capital scene is gaining momentum with a surge in tech startups attracting local and international investors.

Key regions:

Market definitionIn-Scope/Out-of-scopeMarket structureReportsMethodology

The Venture Capital market in Pakistan has been experiencing significant growth in recent years, driven by several key factors.

Customer preferences: Entrepreneurs in Pakistan are increasingly seeking venture capital funding as a means to finance their startups. This is due to the fact that traditional sources of financing, such as bank loans, are often difficult to obtain, particularly for early-stage companies. Venture capital provides entrepreneurs with the necessary capital to scale their businesses and bring their innovative ideas to market. Additionally, venture capital firms often provide valuable expertise and guidance to startups, which can be a major draw for entrepreneurs.

Trends in the market: One of the key trends in the Venture Capital market in Pakistan is the increasing number of venture capital firms and funds. This is a result of a growing interest in investing in startups and the recognition of the potential for high returns. As more venture capital firms enter the market, competition for investment opportunities has intensified, leading to higher valuations and larger funding rounds for startups. Another trend in the market is the focus on technology startups. Pakistan has a large and growing population of young, tech-savvy individuals, which has created a fertile ground for the development of technology startups. Venture capital firms are increasingly targeting these startups, as they have the potential for rapid growth and scalability. This trend is also being driven by the increasing availability of high-speed internet and the proliferation of smartphones in Pakistan.

Local special circumstances: One of the unique aspects of the Venture Capital market in Pakistan is the strong presence of diaspora investors. Many Pakistani entrepreneurs and professionals who have achieved success abroad are now investing in startups in their home country. These diaspora investors bring not only capital but also valuable networks and expertise, which can be a major advantage for local startups. Another special circumstance in Pakistan is the government's focus on promoting entrepreneurship and innovation. The government has launched several initiatives to support startups, including tax incentives, funding programs, and the establishment of incubators and accelerators. These efforts have helped create a favorable environment for venture capital investment in the country.

Underlying macroeconomic factors: The Venture Capital market in Pakistan is also influenced by underlying macroeconomic factors. The country has been experiencing steady economic growth in recent years, which has created a larger consumer market and increased demand for innovative products and services. This has made Pakistan an attractive market for venture capital investment. Additionally, Pakistan has a young and growing population, which provides a large pool of talent and potential customers for startups. The country also has a relatively low cost of living and a favorable regulatory environment, which further enhances its appeal as a destination for venture capital investment. In conclusion, the Venture Capital market in Pakistan is developing rapidly due to increasing customer preferences for venture capital funding, the emergence of new trends such as technology startups, the presence of diaspora investors, the government's support for entrepreneurship, and underlying macroeconomic factors. These factors are driving the growth of the market and creating opportunities for both entrepreneurs and investors in Pakistan.

Data coverage:

Data encompasses B2B and B2C enterprises. Figures are based on the amount of capital raised, the average of deal size and the number of deals.

Modeling approach / Market size:

Market sizes are determined through a combined top-down and bottom-up approach, building on a specific rationale for each market segment. As a basis for evaluating markets, we use data from OECD, annual financial reports of key players, industry reports, third-party reports, publicly available databases, and survey results from primary research (e.g., the Statista Global Consumer Survey). In addition, we use relevant key market indicators and data from country-specific associations, such as GDP, CPI, number of small and medium-sized enterprises (SME), new businesses registered (number) . This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the S-curve function and exponential trend smoothing are well suited for forecasting digital products and services due to the non-linear growth of technology adoption.

Additional notes:

The market is updated twice a year in case market dynamics change. The impact of the COVID-19 pandemic and the Russia-Ukraine war is considered at a country-specific level.