ISLAMABAD: Pakistan on Tuesday launched the first-ever “Pakistan Startup Fund” (PSF) aimed at catalyzing venture investments in Pakistan and positioning Pakistani startups as significant players on the global stage.
Addressing the launching ceremony of PSF held here, Caretaker Federal Minister for Information Technology (IT) and Telecommunication Dr Umar Saifs said that the government will allocate up to Rs 2 billion for the PSF every year.
The Fund is structured as an equity-free capital to help close a VC round for a startup, he said, adding that the PSF is designed to help a startup raise its first external investment.
Pakistan’s startup funding falls 77.2% in 2023
Ignite National Technology Fund will take charge as the executing body, ensuring transparency through an independent steering body overseeing the operations.
The minister said that in the past four years, around $800 million were invested in Pakistani startups and said that the network of eight National Incubation Centers (NICs) are supporting startups in the country, and over 4,000 startups are indicative of a vibrant entrepreneurial landscape.
Saif said that if there is a startup in Pakistan and a foreign venture capitalist (VC) is evaluating the startup for $1million investment, the VC only needs to invest $700,000- the PSF will give a grant of $300,000 to help close the round, he maintained.
He went on to say that PSF is designed to lower the risk for international investors to invest in Pakistani startups. “With PSF we hope to create a value of at least Rs 50 billion per year in the startup ecosystem in Pakistan,” he said.
Saif said the Fund represents a transformative initiative in the realm of entrepreneurship and technological innovation. By focusing on the burgeoning potential within the country’s startup ecosystem, the PSF will accelerate economic growth and innovation in the country.
The Fund will underwrite the risk of venture capitalists by providing equity-free grants to the startups as the last cheque in an investment round. It will not only provide financial support by also foster an environment of innovation and entrepreneurship vital for the success and scalability of startups.
He said this event presented a unique opportunity to venture capitalists to delve deeper into the PSF. Dr Umar Saif noted that the PSF will pave the way for exciting collaborations and open doors to more innovative and prosperous future.
He said that the fund will connect innovative startups, venture capitalists and investors. He said that the Ministry of IT and Telecommunication will continue supporting technological innovation and entrepreneurship.
The ceremony was attended by local and international venture capitalists, investors, ambassadors, heads of known tech companies, and senior officers of the Ministry of IT and Telecom and its attached departments.
The IT minister said the government wants to facilitate and accelerate the growth of innovative ventures in Pakistan through the PSF. This initiative will not only provide financial backing but also create a conducive environment for startups to flourish, he added.
Copyright Business Recorder, 2024
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