To invigorate Pakistan’s startup landscape, Umar Saif, Pakistan’s interim Minister for Information Technology and Telecommunications, has announced the launch of an ambitious sovereign venture capital fund reports Bloomberg.
The initiative is designed to attract global investors back into the country’s startup ecosystem, providing a much-needed boost to local entrepreneurs.
Initially, the Pakistani government plans to invest $10 million annually through the fund, with a primary focus on supporting local early-stage startups with existing external commitments.
The investment range is anticipated to be between $2 million and $3 million, depending on the sizes of the companies. This initiative seeks to bridge a critical funding gap for emerging businesses in Pakistan and, if successful, breathe new life into the country’s startup ecosystem.
“Pakistan is setting up this fund where they want to entice global investors at an early stage,” commented Umar Saif, emphasizing the government’s desire to provide additional incentives for global investors to engage with and support early-stage Pakistani companies. The establishment of a dedicated venture capital fund positions Pakistan as an attractive destination for international capital deployment in the startup space.
The strategic move comes against the backdrop of a recent downturn in fundraising by Pakistani startups. Data from Invest2Innovate reveals a significant decline from the record-breaking $700 million secured by startups in 2021 and 2022. Economic and political instability, coupled with global trends in emerging markets, has contributed to this decline.
Beyond the venture capital fund, Umar Saif envisions a comprehensive approach to developing Pakistan’s tech industry. Recognizing the need to enhance the skills of the workforce, he proposes the implementation of a mandatory internship program for university students. This proactive measure aims to address the skills gap among graduates, identified as a bottleneck for the growth of the tech sector.