In the 60th episode of the misaal podcast, I had an amazing conversation with Mutaher Khan, diving into the nitty-gritty of Q3 2023 startup funding in Pakistan.
Here’s a snapshot of our conversation:
- Market Slowdown: We’ve hit a slow patch in Pakistan’s startup realm, reminiscent of the calmer days of late 2018 – the world before COVID-19.
- Pre-seed Funding Dip: There’s a notable shrinkage in pre-seed funding rounds, potentially reshaping the initial fundraising escapade for newbie startups.
- Startup Closures: The recent shutdowns of startups like MedznMore and Jugnu have stirred the pot, sparking debates on the local startups’ grit and responses to hurdles.
- Transparency in Funding Announcements: We emphasized the need for a no-nonsense approach in funding announcements and press releases to nurture a culture of openness that could magnetize trust and more greenbacks.
- The Art of a Good Press Release: The magic of a compelling press release can significantly amp up a startup’s street cred and help birth a culture of openness and accountability.
So, the once buzzing startup ecosystem in Pakistan is taking a breather.
In Q3 2023, Pakistani startups raised $6.8 million in disclosed equity funding across five deals.
That’s a whopping 87% dip compared to the $55 million pocketed in Q3 of 2022, although a 40% jump from the $5 million raised in Q2 of 2023. The deal count shrunk by 44% YoY and 29% QoQ.
Mutaher compared the current dip in deal-making to 2018, pre-COVID-19. He noticed investors being more cautious, and while hopeful for a rebound, he doesn’t see it happening immediately.
Seed funding for startups has become challenging. With a drop in pre-seed funding, investors are becoming more conservative. Mutaher suggests that new entrepreneurs should prepare for a harder fundraising journey.
The shutdowns of MedznMore and Jugnu have caused concern. These events sparked conversations about resilience and strategy in the startup community. The startup world is challenging, and while not all succeed, there are valuable lessons in both successes and failures.
Mutaher emphasizes the importance of transparent funding disclosures to build trust and attract more investments. He believes in fostering a culture where honesty is paramount for investors everywhere.
A press release should present facts and highlight a startup’s vision and achievements. Mutaher believes genuine storytelling can enhance a startup’s reputation and promote transparency in Pakistan’s startup community.
Mutaher suggests a time of reflection in Pakistan’s startup world. The recent decline in deals and initial funding prompts investors and entrepreneurs to rethink their strategies. The challenges faced by startups highlight the need for resilience and adaptability. Transparent communication and genuine storytelling in press releases are crucial for building trust and establishing an open, accountable startup environment.
Mutaher Khan provides valuable insights into the current landscape and suggests key principles for a stronger, trust-driven future in the ecosystem.