KARACHI: Pakistani startups raised $163 million in the first quarter of 2022, which is more than half of the total startup funding in the last calendar year.

According to Kalsoom Lakhani, founder of Invest2Innovate, a platform that supports early-stage enterprises, major chunks of this funding came from large seed rounds and Series B rounds. As such, these are indications of the trend that 2022 will quickly surpass last year’s figure of $350m.

The funding raised across 15 deals in January-March is seven times higher than the amount generated in the same quarter of 2021 in which the startups attracted $22.2m.

In 272 deals, local startups have raised $728m since 2015.

Top-funded sectors in January-March were e-commerce ($202m), fintech ($17m) and trucking/logistics ($13m).

The average ticket size was $32m in e-commerce versus $5.8m in fintech in the latest quarter.

As for the investor type, “mixed” topped the list with the contribution of $122m across seven deals. A “mixed” deal is one in which at least one local investor and one international investor take part. The “international” category of investors brought in $36m in three deals while the “local” ones contributed $850,000 to four deals.

The top three deals in terms of the amount raised were Bazaar ($70m in Series B), Retailo ($36m in Series A) and Jugnu ($22.5m in Series A). The same three deals also constituted the top e-commerce deals for the January-March quarter.

“The fact that B2B e-commerce players raised later-stage rounds is a strong signal for the Pakistan market, especially given the concerns around ‘cooling-off’ or a dearth of growth-stage capital. Fintech also did well this quarter, albeit mainly via earlier-stage deals, like NayaPay’s $13m seed,” said Ms Lakhani in a social media post.

The top fintech deals in the first quarter were NayaPay ($13m in seed), Taro ($3.5m in pre-seed) and Metric ($900,000 in pre-seed).

As for the amount raised by stage, Series B funding topped the list with $70m in one deal. It was followed by the Series A rounds of $58.5m in two deals. As much as $29m was invested in seed rounds across five deals. Another five startups attracted $5.3m at the pre-seed stage during the last quarter.

Of the total funding amounting to $163m, female-cofounded startups received only $3.9m while male-founded startups got the rest of $159m.

According to the Pakistan Startup Ecosystem Report 2021, recent years have seen an increasing shift in how investors in developed economies have sought to broaden their holdings to emerging and frontier markets, including Pakistan. “In part, the strides made by the ecosystem can be attributed to a more facilitative policy regime,” it added.

Published in Dawn, April 3rd, 2022

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