A report compiled by tech blog, Data Darbar, revealed that the third quarter of 2022 has been the worst for Pakistani startups as the investment fell to $55.6 million, down 46.2% from the preceding quarter when the flows amounted to $102.9m. Data Darbar co-founder, Mutaher Khan, said; “Besides a global slowdown in start-up investments amid uncertain macros and a change in monetary stance, there’ve also been spill-overs from the closure of a star start-up (Airlift) as well as fraud allegations against a fintech (TAG).”
Slowdown in Pakistani Startups Funding
The year-on-year decline in Pakistani startup funding reached 68% with only 18 deals in total, which is the lowest since Q1 2021, due to which the average ticket size dropped to $4.6m in July-September as compared to $4.9m a quarter ago. It should be noted that some heavily funded startup also wrapped up their business this year, including; Airlift, Careem, Swvl, Truck It In, VavaCars, and others.
According to the funding based on the latest three-month period, start-ups raised $9.8m in six pre-seed rounds, $28m in four seed rounds, $6m in two pre-Series A rounds, and $11m in a single Series A round. The data further revealed that the total number of investors in the three-month period was 52 versus 81 in the preceding quarter.
Domination of Fin-tech Sector
The last three months were dominated by the fin-tech sector, which was sitting at the top with most deals and total funding at 8 and $35.85 million, respectively. The second best-performing sector was e-commerce where start-ups attracted $18.9m in five deals. The top five investment rounds included; fin-tech DBank ($17.6m), fin-tech OneLoad ($11m), eCommerce start-up PriceOye ($7.9m), eCommerce start-up 24seven.pk ($6m) and ecommerce start-up DealCart ($4.5m). Mr. Mutaher Khan expected a further decline as the “investors continue to have significant dry powder, many of them are hesitating from deploying any capital and can afford to wait for one to two quarters.”