The first half of 2021 has proven to be stellar for Pakistani startups. According to data compiled by Data Darbaar, total investment into the country's ecosystem crossed $120 million across 35 unique deals.
This figure is almost twice as much as the $66 million registered during the whole of 2020, when 48 deals were recorded.
Activity was mainly led by the e-commerce sector which cumulatively bagged more than $42m across 11 deals in the first six months of the current year, surpassing the $11.2m recorded during all of 2020.
This marks a shift from the domination of transport and logistics which had led the investment value in each of the last two years.
Aside from the Series B of Jabberwock Ventures — the parent company of Cheetay and Swyft — which was never officially disclosed but is reported to be around $20m, Tajir recorded the biggest deal worth $17m at Series A.
The e-commerce sector's ascent to the funding leaderboard from second position came on the back of a handful of business to business (B2B) startups working towards digitising the retail supply chain, or what the i2i Insights calls DukanTech.
It was these players that raked in the overwhelming majority of the money at $36.6m, making up 87 per cent of the sector’s total.
All five of them — Bazaar, Retailo, Tajir, Salesflo and Dastgyr — had raised a combined $6.2m in 2020, thus representing a surge of almost six times in less than a year.
Grocerapp, which operates in the direct to consumer segment, also secured $5.2m earlier in June.
Fintech too finally lived up to the buzz that surrounds it, at least as far as fundraising is concerned, as it raked in close to $32m during the period under review.
The major drivers here were Sadapay’s $7.2m and TAG’s $5.5m among electronic money Institutions while trading platforms Seedlabs and KTrade bagged $6.4m and $4.5m, respectively.
In comparison, the entirety of 2020 had seen $9.6m poured into the sector, almost single-handedly contributed by Finja’s $9m, which added another $1.15m from Habib Bank Ltd in 2021 to finally close its Series A round.
More than half of the deals came at the seed stage while six were Series A. Unlike 2020, which saw 10 Pre-Series A, only one such round has been recorded so far.
City-wise, Karachi continued to top the charts with 21 deals under its belt worth roughly $48.4m. On the other hand, Lahore led in terms of value if Jabberwock’s investment is included.
As far as founder demographics are concerned, there was hardly any noticeable change since around 97pc of the total capital went to male-founded startups across 27 deals.
Only two were entirely led by women while six had women as co-founders. Similarly, 86pc of the investment went towards startups that had at least one foreign-educated founder.
On the supply side of money, the first half of 2021 saw the participation of 88 unique institutional investors of which 65 were international.
Venture capital firms naturally dominated the overall tally at 53 while the number of corporates was 10. The remaining were either traditional or blockchain-focused investment companies, private equity or syndicates.
The period also saw the entry of some major global names into the Pakistani ecosystem, most notably Kleiner Perkins which has invested in more than 1,200 startups to date and boasts at least 17 unicorns, including Instacart.
The recent flurry of foreign investors has helped increase the round sizes significantly, which can be gauged from the fact that 20 of the 35 deals were worth more than $1m.
At least 15 of these had one or more foreign lead investors. However, as far as the deal count is concerned, Fatima Gobi Ventures was the most active with four investments.
Sarmayacar, Global Founders Capital and i2i Ventures closely followed with three deals each.