Pakistani startups collectively raised a record $365.87m in 2021, which is 450pc more than the $66.44m raised in 2020.
The year 2021 was when Pakistani startups finally joined the big leagues, collectively raising a record $365.87 million, which was 450 percent more than the $66.44 million not only raised in 2020, but all the previous years combined. was more than the amount. The number of deals also increased to 82 from 49 a year ago, showing an increase of 67 per cent.
It was helped by some big tours, notably Airlift’s Huge $85m Series B. But beyond that, the average ticket size reached $5.30m this year, up from $1.36m in 2020.
Other startups that raised $10 million or more during the year include Bazaar, which raised $36.5m in two rounds, Jabberwock (Cheatey) who raised $18m, TAG, a cumulative, which raised $17.5m, Tajir $17m, QisstPay who raised $15m, Creditbook Safe $12.5m and Bridgelinx which raised $10m. Collectively, these companies accounted for 57.85 per cent of all invested capital.
Despite the increase in capital amid rising ticket sizes, most of the activity was concentrated in the early stages as seed deals accounted for the lion’s share of 46, followed by 15 in the pre-seed round and nine in Series A. Meanwhile, only two Series B rounds were recorded.
Sector-wise, e-commerce dominated the fundraising landscape, raking in $174.6m across 20 deals. However, about half the capital came from a single startup – Airlift.
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Fintech, on the other hand, led for the first time in terms of deal count (24), raising almost $97m. It was mostly spread across the payment, credit/lending and ledger space. Meanwhile, the transportation and logistics industry slipped to third place with eight deals and $35.4m.
Starting in 2020, there is also a growing trend of Pakistani startups trying to streamline them. groceries Ecosystem – a phenomenon carried out in 2021. From B2B marketplaces to ledger apps, there were at least 11 deals within the broader Dukantech — which primarily spanned the fintech and e-commerce sectors — over $87 million.
Another sign of healthy activity was the growing number of startups raising multiple rounds in a single year, as eight such instances were recorded in 2021. In this, Bazaar, CreditBook, Abhi and TAG raised capital in two separate phases, while TruckIt In, PostX and Fresh went for expansion rounds.
But, pouring more capital into the ecosystem does not mean that it is becoming accessible to all to raise funds. For example, women-led startups only managed to raise a little over $4m in three deals, against $250.8m raised by male-led companies. The remaining $111 million (13 deals) went to startups co-founded by mixed-gender teams.
Similarly, having overseas education also appears to pay dividends as startups with founding teams holding at least an international degree accounted for about 87pc of the dollar value ($317.3m) during the year , well in line with the trends of 2020.
The year 2021 saw some of the most notable investors entering the Pakistani market, including Tiger Global, Kleiner Perkins, Global Founders Capital and Stripe, lead several tours. It was foreigners who helped increase the size of the deal. This is evidenced by the fact that 49 deals were each valued at more than $1m, with international firms being the sole leads in 27 and co-led with local investors in another 11. This is only a function of the sheer size of investment vehicles taken up by Pakistan-based venture capitalists, which are increasingly falling short of the capital requirements of some startups.
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