Since July 22, numerous unauthorised exchange outlets have been closed after the military intelligence agency summoned currency dealers to address the rising dollar rate in the open market. photo: file
LAHORE:
More than 170 venture-backed startups, a combined enterprise value exceeding $4 billion, and growth of 3.6 times since 2020, faster in percentage terms than India and several established global hubs.
On paper, Pakistan’s technology ecosystem looks ready for lift-off. Yet one number is conspicuously absent: zero unicorns and no company generating more than $100 million in annual revenue, indicating that the missing ingredient is not talent, but capital.
According to data compiled by Dealroom.co and inDrive in its Pakistan Tech Report 2026, the country’s startup base has expanded rapidly, with around 32 companies raising their first venture capital round each year. Since 2020, enterprise value of VC-backed firms has grown 3.6 times, while companies founded after 2015 have seen value expand more than elevenfold.
Yet the report repeatedly flags underfunding at all stages as the ecosystem’s central bottleneck. Pakistan has produced breakouts, with around 17 companies raising between $15 million and $100 million, and two scaleups with funding above $100 million. Thirteen firms generate between $25 million and $100 million in annual revenue. However, none has crossed the billion-dollar valuation mark or achieved $100 million-plus revenue scale. This ceiling reflects structural funding gaps rather than an absence of ambition or capability.
Pakistan’s fundamentals suggest strong supply-side readiness. Roughly 59% of the population falls within the working-age bracket of 15 to 64 years, with a median age around 21-22. Smartphone penetration stands near 68%, while mobile broadband coverage reaches about 81% of the population. Early 2025 data, incorporated in the report, show approximately 116 million internet users, nearly 46% penetration, alongside 190 million active SIM connections. These are not indicators of a digitally dormant economy. They point instead to a large, young, increasingly connected market capable of supporting scale.
The challenge lies in capital depth and continuity. Early-stage rounds have emerged, but growth-stage financing remains thin. Many founders start locally, yet a significant share of capital is raised abroad, weakening the domestic investment flywheel that typically fuels repeat founders and reinvestment cycles.
“Pakistan’s founders are operating at global standards in fintech, enterprise software and mobility,” said Ahmad Aziz, a UAE-based tech economist. “What they lack is consistent Series B and C capital. Without that, companies plateau at $30-50 million in revenue instead of compounding into $300 million businesses.” The absence of late-stage funding affects more than valuations. It influences risk appetite, hiring plans and product expansion. Startups optimise for capital efficiency rather than aggressive scaling. While that discipline can strengthen fundamentals, it can also delay market dominance in fast-moving sectors such as fintech and AI-enabled services.
International investors have begun to test the waters, particularly in fintech and transportation. Corporate and operator-led venture arms such as Veon Ventures and Yango Ventures have participated in selected deals. Logistics, delivery and mobile payment startups have secured rounds ranging from the mid-teens to around $40 million.
But ecosystem-wide, venture capital inflows remain modest compared to regional peers. Even within the broader ‘New Frontier’ group of emerging ecosystems, which now attract about 11% of global VC and collectively exceed $2 trillion in enterprise value, Pakistan’s capital intensity per startup remains relatively low. This funding gap may paradoxically represent opportunity. In undercapitalised ecosystems, early entrants often capture disproportionate upside once scale begins. India, frequently cited as a comparator, was at a similarly early stage 10-15 years ago, before sustained capital inflows produced a generation of unicorns and repeat founders.
For Pakistan, the next phase hinges on three interlinked shifts. First, deeper pools of domestic institutional capital, including pension funds and insurance vehicles, need regulatory pathways to participate in venture allocations. Second, diaspora capital must transition from remittance flows into structured venture participation. Third, successful exits, even mid-sized ones, must recycle wealth back into early-stage investing. Women-led startups illustrate both the promise and the constraint. Pakistan accounted for 288 applications to the Aurora Tech Award in 2025 out of roughly 3,400 globally, a disproportionately high share relative to ecosystem size. Yet most female-founded ventures remain at the pre-seed stage, underscoring how small amounts of catalytic capital could unlock broader impact.
The broader macro environment adds cautious optimism. Real GDP growth rebounded to around 3% in FY2024-25, signalling gradual stabilisation. While growth remains moderate, macro stability is a prerequisite for long-term venture confidence. Ultimately, ecosystems do not fail because of talent scarcity. They stall when capital does not match capability.
Pakistan has built a base – more than 170 startups, double-digit growth in enterprise value, and founder experience accumulating across sectors from fintech to health tech. What remains missing is sustained growth capital capable of converting breakouts into global champions. If that constraint is addressed over the next five to seven years, today’s $4 billion ecosystem could multiply several times over. If not, the country risks remaining a proving ground for early innovation rather than a producer of global-scale technology companies.
