KARACHI: According to a Pakistan Tech and VC landscape report by Data Darbar and Indus Valley Capital, the total capital raised by Pakistani companies in 2023 was $75.8 million, a significant decrease of 77% from the previous year. In a similar vein, the number of deals fell to 39 percent, the lowest since 2019, a drop of 41.8 percent.
As a result, the median deal size decreased by 60% to $1.2 million, while the average ticket size decreased by 64.2 percent to $2.2 million. Sixty-one percent of the entire investment went into seed-stage deals, which received the majority of capital. Pre-seed rounds, however, nearly disappeared as investors insisted on more momentum before disbursing funds.
Over the last five years, e-commerce has continued to be the leading industry, accounting for 21.2 percent of deals and 46.4 percent of funding. The grocery vertical in e-commerce attracted the largest capitalization share. Fintech saw a precipitous decline as well, bringing in $20.1m, or nearly 80% less than in 2022.
Similar declines were seen in the worldwide venture capital ecosystem, with funding values plunging by 34.9 percent in 2023 to $345.7 billion, the lowest level since 2019. Compared to North America, which saw a 30 percent reduction in funding, Asia fared better, declining by 36.8 percent.
The research also noted that, in contrast to 209 in 2022, 97 distinct investors participated in deals in Pakistan. Local investors made up only 24.4 percent of all investors in Q42023, indicating their continued underrepresentation. Among the most active investors were notable ones like Indus Valley Capital, SOSV, Zayn VC, and Fatima Gobi Ventures.
