A new report by Dealroom and inDrive puts Pakistan’s startup scene in an interesting light. The good news: venture-backed startups in the country have crossed a combined enterprise value of $4 billion, growing 3.6x since 2020. The growth rate outpaces India, New York, Paris, Dubai, and London, making Pakistan the second fastest-growing tech ecosystem in the world behind only the Bay Area.
That is genuinely impressive. And yet, buried right beneath that headline is a harder truth: Pakistan still has no unicorn. Not a single startup has crossed $100 million in annual revenue. And only 32 companies manage to raise their first VC round each year.
So what exactly is going on?
The Numbers Tell Two Stories at Once
The Dealroom and inDrive report, titled “The Rapid Rise of Pakistan Tech,” paints a picture of a market full of potential that keeps bumping into the same ceilings.
On the positive side, Pakistan now has over 170 VC-backed startups. Among them are 17 “breakouts” that have raised between $15 million and $100 million, two scaleups with over $100 million in total funding (grocery platform Bazaar and Telenor Microfinance Bank, which received $185 million from Ant Group in 2025), and 13 “Colts” generating between $25 million and $100 million in annual revenue.
In 2025 alone, fintech Haball secured a $52 million round and healthtech company MedIQ raised $6 million. Pakistani founders are also attracting meaningful international capital, with the United States ($797 million) and the UAE ($545 million) identified as the largest sources of investor funding into the country.
The demographic fundamentals support long-term optimism too. Pakistan has 240 million people, a median age of just 21 to 22 years, 190 million active mobile SIM connections, 81% 3G/4G coverage, and 68% smartphone penetration. Real GDP grew at 3% in FY2024/25. This is a large, young, and increasingly connected market.
But here is where the story gets complicated.
The Ceiling Nobody Seems to Be Breaking Through
Despite all this momentum, Pakistan’s ecosystem has a structural problem that the report is candid about: capital scarcity is the main constraint, and it is keeping companies stuck.
Most startups are raising money to capture domestic market share, not to expand internationally. Without larger pools of growth capital, companies hit a ceiling where they are big enough to survive but not funded enough to go regional or global. The result? A cluster of solid, profitable-ish companies that are essentially stalled at scale.
“Pakistani founders often remain domestically focused and expand too late,” said Qaiser Noor, a board member of eight entities in Saudi Arabia, speaking to Business Recorder. “To create unicorns, Pakistani companies must design globally from day one, raise larger regional funds, align with international regulators, and target higher-value enterprise and cross-border use cases rather than low-margin domestic volumes.”
The gap compared to regional peers is stark. In the first half of 2025, Singapore attracted $725 million in fintech investment alone. Southeast Asia saw $1.4 billion in fintech funding in the same period. Pakistan’s fintech sector, despite having over 450 startups and $390 million in cumulative funding, attracted just $52.5 million in H1 2025.
For context, India secured $3.1 billion in venture funding in just the first quarter of 2025. Pakistan, since 2015, has attracted less than $1 billion in total venture capital. India has raised $161 billion over the same period.
The Funding Rollercoaster
To understand where Pakistan’s ecosystem stands today, you need to look at where it has been.
2021 and 2022 were the boom years. Startups raised $347 million and $331 million respectively, attracting global attention and producing a generation of well-funded companies. Then the bust arrived hard. By 2023, funding dropped 77% to $75.6 million. In 2024, things got worse before they got better, with only 15 funding rounds recorded all year and just $37 million raised.
The correction reflected both global venture capital pullback and Pakistan-specific challenges: political instability, inflation, a volatile rupee, and an economic crisis that shook investor confidence.
2025 brought a genuine but uneven recovery. Equity funding climbed to $36.6 million (according to Data Darbar’s equity-only figures) while broader estimates including debt put total startup financing closer to $74 million. Q2 2025 alone saw $60.2 million raised, more than the entire 2024 total. The IMF’s Extended Fund Facility, the State Bank’s rate cuts to 12%, and stabilizing macroeconomic conditions helped restore a degree of investor confidence.
But the recovery has been concentrated. Larger deals are happening, but fewer startups are getting funded. The average deal size in 2024 was $3.75 million, up 68% from 2023, while deal volume remained low. Capital is flowing to the best-positioned companies, leaving early-stage founders and less-connected entrepreneurs struggling.
What Is Actually Working
Amid the challenges, certain sectors and themes are showing genuine traction.
Fintech remains dominant, which makes sense given Pakistan’s large underbanked population and the infrastructure gaps that create obvious opportunities. Startups in payments, lending, and embedded finance have attracted the most consistent investor attention. Companies like Haball, ABHI, and SadaPay have demonstrated that there is real demand for digital financial services.
Mobility and logistics have also attracted meaningful capital, with delivery startups raising $16 to $40 million rounds and platforms addressing last-mile logistics challenges in a fragmented market.
Health tech is emerging, with MedIQ’s recent raise signaling that investors are beginning to look beyond fintech. Education technology, enterprise software, and climate tech are identified as sectors with significant untapped potential.
Women-led startups, while still underrepresented, are showing progress. 288 women founders applied to the Aurora Tech Award in 2025, predominantly in health tech, AI, and sustainability. The share of ecosystem funding going to women-led startups rose from 1.4% historically to around 10% by 2025, though the absolute numbers remain small and most women founders are still stuck at pre-seed stage.
International investor interest is also diversifying. Speedinvest made its first Pakistani investment leading ABHI’s $17 million Series A. Shorooq Partners from the UAE deployed $15 million into a Pakistani fintech. Gobi Partners established the $50 million Techxila Fund II specifically targeting Pakistani startups. These are meaningful signals that global and regional investors are beginning to take Pakistan seriously.
The Real Constraint: Think Local, Get Stuck
The Dealroom report is careful about what it calls the “lean startup” narrative. Yes, capital scarcity can breed resourcefulness. But it also creates a trap. Companies that cannot raise growth capital cannot hire international teams, cannot navigate foreign regulatory environments, cannot build the cross-border infrastructure needed to compete globally.
“Most of these companies are stuck scaling domestically,” the report notes. And that is a structural problem, not an individual founder problem.
Consider how successful international fintechs have scaled. They embedded themselves into payroll systems, supply chains, and platforms from early on. They designed for cross-border compliance from day one. They raised larger rounds that gave them the runway to build international operations before they needed them. Pakistani startups, by contrast, are often raising $3 to $5 million rounds to prove domestic traction, then finding that next rounds of $20 to $50 million are hard to come by in a market where growth-stage investors are scarce.
The result is companies that dominate their domestic category but cannot access the capital needed to become regional or global players. And because there are few exits and few IPOs to point to, international investors remain hesitant, creating the circular challenge that has constrained the ecosystem for years.
“Global investors back markets with repeated exits and large listings,” Noor explained. “Pakistan has seen very few billion-dollar technology exits.”
What the Dealroom Report Gets Right About the Opportunity
Here is where the report makes a genuinely interesting argument. Capital scarcity in frontier markets creates an opportunity for strategic early entrants.
If you invest in Pakistan now, before the ecosystem matures and valuations rise, you are getting access to world-class founders, large addressable markets, and growing companies at prices that would not be available in more developed ecosystems. The potential upside is significant precisely because capital has been constrained.
Yoram Wijngaarde, Founder and CEO of Dealroom, put it clearly: “Pakistan stands out as a New Frontier tech ecosystem with strong momentum but clear structural gaps. Our data shows a rapidly growing base of VC-backed startups and accumulating founder experience, yet capital remains the main constraint.”
inDrive’s own position reflects this thesis. As Pakistan’s number one ride-hailing platform, the company is transitioning from pure operator to ecosystem investor, combining capital with operational infrastructure and distribution access. Andries Smit, Chief Growth Businesses Officer at inDrive, described it this way: “Pakistan is an emerging tech ecosystem with all the right fundamentals in place. As the number one ride-hailing platform in the market, inDrive has seen this first-hand. That’s why we’re increasingly moving beyond being an operator to also becoming an ecosystem investor.”
The India comparison is instructive here. A decade ago, India’s startup ecosystem looked a lot like Pakistan’s does today: fast-growing, full of potential, but constrained by limited capital and few exits. Today, India’s tech sector is worth an estimated $700 billion. If Pakistan follows even a fraction of that trajectory, early investors stand to benefit enormously.
What Needs to Change
The path from $4 billion to a genuinely world-class ecosystem requires addressing several structural issues that individual founders cannot solve on their own.
Domestic capital needs to deepen. Pakistan’s institutional investor base, including pension funds, insurance companies, and corporate treasuries, remains largely absent from the venture ecosystem. Creating incentives for domestic capital to flow into startups would reduce dependence on episodic foreign investment.
Policy needs to support globally-oriented businesses. Dollar retention accounts for tech exporters, clear data protection frameworks, simpler company formation for international structures, and consistent treatment of digital services companies would all help founders build globally from day one rather than retrofitting international capabilities later.
Infrastructure investment cannot be optional. Reliable electricity and fast internet are not luxury concerns for tech companies. They are prerequisites. Progress is happening, but the pace needs to accelerate.
Growth-stage capital needs to exist. This is the most critical gap. Pakistan has seed investors. It has some early-stage VCs. What it lacks is consistent growth capital for companies ready to scale from $5 million to $50 million in revenue. Without this layer, even well-funded early-stage companies stall.
Exit pathways need development. More acquisitions, more IPOs, and more large-scale partnerships with international companies would create the track record that attracts institutional investors. Each successful exit makes the next fundraise easier for every Pakistani founder.
The Verdict
Pakistan’s $4 billion startup ecosystem is real and growing. The 3.6x growth since 2020 is genuinely impressive and reflects the quality of founders the country is producing. The demographic fundamentals are among the best in Asia.
But the honest assessment is that the headline number flatters a market that is still working through deep structural challenges. No unicorn, no company above $100 million in revenue, only 32 new VC-backed companies per year, and most of those companies growing domestically rather than globally. These are not minor footnotes. They are the core story.
The Dealroom and inDrive report frames this as an opportunity, and they are right. Early investors who understand frontier markets and bring more than just capital, including operational expertise, distribution access, and international networks, can generate significant returns while helping address the ecosystem’s structural gaps.
For Pakistani founders, the message is both encouraging and challenging. The ecosystem is real. The momentum is real. But breaking through the ceiling requires thinking globally from day one, building products designed for cross-border scale, and seeking out the investors who understand what it takes to build world-class companies from difficult markets.
Pakistan has produced remarkable entrepreneurs who have succeeded despite everything working against them. Imagine what becomes possible when the infrastructure finally starts working with them.
“The Rapid Rise of Pakistan Tech” was produced by Dealroom.co and inDrive and published in January 2026. The report draws on Dealroom’s proprietary database with analysis as of October 2025.