During Q1 2021, Pakistani startups raised $18,700,000 in disclosed funding across eight deals.
Compared to the first quarter of 2020, it’s an increase of 1,378% from $1,265,000. However, compared to the fourth quarter of 2020, it is a 6% decline from $19,645,000 million.
Q1 2021 Funding
For the startup ecosystem, given the global pandemic, 2020 was a remarkable year in terms of funding. Pakistani startups raised a record $56 million across 28 deals. Compared to 2019, the amount of funding increased 50% whereas deals were up 47%.
And the first quarter of 2021 didn’t disappoint. In fact, it’s a solid start to the year.
Let’s do the numbers.
$300,000
Chkar, the Gilgit-Baltistan based hospitality startup, raised $300,000* in Seed funding from MFSYS.
$6,500,000
Bazaar, the Karachi-based B2B e-commerce marketplace startup, raised $6.5 million in Seed funding from Indus Valley Capital, Global Founders Capital, S7V, Wavemaker Partners, Derayah Venture Capital, and Next Billion Ventures.
This is Bazaar’s second round of funding. In 2020, it raised $1,300,000 in Pre-Seed funding from Indus Valley Capital & Alter Global.
This brings Bazaar’s total funding to $7,800,000.
$2,000,000
RINSTRA, the Islamabad-based digital media platform, raised $2 million in Series A funding from undisclosed investors.
$150,000
24Seven.pk, the Lahore-based grocery delivery startup, raised $150,000 in Seed funding from the SOSV accelerator.
$150,000
Dastgyr, the Karachi-based B2B e-commerce marketplace startup, raised $150,000 in Seed funding from the SOSV accelerator.
$1,400,000
Remotebase, the Lahore-based startup HR Tech startup placing remote engineers, raised $1,400,000 in Seed investment from Indus Valley Capital, Draper Associates, and Hustle Fund.
$1,000,000
Sehat Kahani, the Karachi-based telemedicine startup, raised $1,000,000 in Pre-Series A funding from Islamic Development Bank, 10Pearls Ventures, Mentors Fund, Impact Fund, Impact Investment Exchange, KASB Securities and Din Group.
This is Sehat Kahani’s second round of funding. In 2018, it raised $500,000 in Seed funding from GSMA Ecosystem Accelerator and Elahi Group of Companies.
This brings Sehat Kahani’s total funding to $1,500,000.
$7,200,000
SadaPay, the Islamabad-based FinTech startup building a neobank, raised $7,200,000 in Seed funding from Recharge Capital, Kingsway Capital, and Raptor Group.
This is SadPay’s second round of funding. In 2019, it raised $2,100,000 in Pre-Seed funding from Kingsway Capital and Raptor Group.
This brings SadaPay’s total funding to $9,300,000.
*Converted from PKR.
Apart from disclosed funding rounds, there were some notable undisclosed funding rounds.
Safepay raised seed funding from Stripe. Unity Retail raised seed funding from Boston Equity Partners. And BOGO raised seed funding from Fetchsky and Wah Brands.
Some Thoughts
Much of what has transpired in the ecosystem in the last couple of years — and continues to — has to do with smart money VCs and the Wapistani effect.
Let me explain.
In recent years, startup founders have complained that dumb money investors plagued the ecosystem and created founder unfriendly term sheets. However, in the past couple of years, things have changed. Now, there are many smart money VCs like Indus Valley Capital, Sarmayacar, i2i Ventures, Fatima Gobi Ventures, and Lakson Investment Venture Capital.
They are changing the narrative and helping the ecosystem evolve to a more desirable state. And VCs outside Pakistan have noticed it. There have been many recent funding rounds where Pakistan-focused VCs have led the rounds with foreign VCs participating, and vice versa.
All in all, an excellent development.
Then there’s reverse brain drain, commonly referred to as the Wapistani effect. A term coined by Rabeel Warraich and further developed by Aatif Awan.
Western educated and or trained Pakistanis, are heading back driven by the ‘naya Pakistan’ promise and new-found optimism. To make the move easier, Aatif Awan at Indus Valley Capital has launched a dedicated program to help with relocation.
The startup ecosystem is thriving with tons of momentum on both capital and talent fronts. Now, if we could get one big exit, that would be fantastic.
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