Government launches Pakistan Startup Fund in major boost for entrepreneurs

Pakistan's IT minister Dr Umar Saif (second from left) is pictured during the launch ceremony of Pakistan Startup Fund in Islamabad, Pakistan, January 9, 2024. (Government of Pakistan)
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Updated 09 January 2024
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Government launches Pakistan Startup Fund in major boost for entrepreneurs

  • Pakistani startups raised over $70 million in 2023, marking a significant decline of over 70 percent compared to preceding two years
  • Caretaker IT Minister says government hopes to create value of at least Rs 50 Billion per year in Pakistan’s startup ecosystem

ISLAMABAD: The government launched the Pakistan Startup Fund (PSF) today, Tuesday, which aims to invest Rs2 billion per year in startups, Caretaker Information Technology Minister Dr. Umar Saif said after a dismal year for entrepreneural activities in the country.  

According to Saif, the PSF is structured as an equity-free capital that would help close a venture capitalist (VC) round for a startup and help it raise its first external investment. 

The development takes place after an unimpressive year for Pakistani startups. In 2023, they raised over $70 million, according to independent monitoring firms, marking a significant decline of over 70 percent compared to the major funding influx in 2021 and 2022. 

“Today we launched the Pakistan Startup Fund (PSF) which will invest up to Rs 2 Billion every year in Pakistani startups,” Saif wrote on social media platform X, formerly Twitter. 

“If you are a startup in Pakistan and a foreign VC is evaluating your startup for a $1 million investment, the VC only needs to invest $700k — the Pakistan Startup Fund will give you a grant of $300k to help close the round.”

Saif assured startups that the government would not acquire any shares or a board position in exchange for the funding. He said the PSF is designed to lower the risk for international investors to invest in Pakistani startups. He added that once the government issues the funds to startups, “we won’t hassle you at all.”

“With PSF we hope to create a value of at least Rs 50 Billion per year in the startup ecosystem in Pakistan,” he wrote. 

Pakistani funding monitors last week expressed optimism about 2024, expecting a more promising year for local startups after general elections are held in the country. 

They noted that Pakistan’s ongoing economic recovery and the announcement of elections have restored investor confidence, which is expected to boost the country’s startup ecosystem.


Pakistan nears $1.5 billion deal to supply weapons, jets to Sudan

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Pakistan nears $1.5 billion deal to supply weapons, jets to Sudan

  • Deal may include drones, air defense systems and Karakoram-8 aircraft, with possible JF-17 fighters
  • The sale is expected to bolster Sudan’s army in the ongoing civil war with the Rapid Support Forces

ISLAMABAD: Pakistan is in the final phases of striking a $1.5-billion deal to supply weapons and jets to Sudan, a former top air force official and three sources said, promising a major boost for Sudan’s army, battling the paramilitary Rapid Support Forces.

Their conflict has stoked the world’s worst humanitarian crisis for more than 2-1/2 years, drawing in myriad foreign interests, and threatening to fragment the strategic Red Sea country, a major gold producer.

The deal with Pakistan encompasses 10 Karakoram-8 light attack aircraft, more than 200 drones for scouting and kamikaze attacks, and advanced air defense systems, said two of the three sources with knowledge of the matter, who all sought anonymity.

It was a “done deal,” said Aamir Masood, a retired Pakistani air marshal who continues to be briefed on air force matters.

Besides the Karakoram-8 jets, it includes Super Mushshak training aircraft, and perhaps ‌some coveted JF-17 ‌fighters developed jointly with China and produced in Pakistan, he added, without giving figures ‌or ⁠a delivery ‌schedule.

Pakistan’s military and its defense ministry did not immediately respond to requests for comment.

A spokesman for Sudan’s army did not immediately respond to a message requesting comment.

Assistance from Pakistan, especially drones and jets, could help Sudan’s army regain the air supremacy it had toward the start of its war with the RSF, which has increasingly used drones to gain territory, eroding the army’s position.

PAKISTAN’S DEFENSE AMBITIONS

The deal is another feather in the cap for Pakistan’s growing defense sector, which has drawn growing interest and investment, particularly since its jets were deployed in a conflict with India last year.

Last month, Islamabad struck a weapons deal worth more than $4 billion with the Libyan National Army, officials said, for one of the South Asian nation’s largest arms sales, which includes JF-17 fighter jets and training aircraft.

Pakistan has also held talks with Bangladesh on a defense deal that could includes the Super Mushshak training jets and JF-17s, as ties improve ties with Dhaka.

The government sees Pakistan’s burgeoning industry as a catalyst to secure long-term economic stability.

Pakistan is now in a $7-billion IMF program, following a short-term ‌deal to avert a sovereign default in 2023. It won IMF support after Saudi Arabia and other Gulf allies provided financial and deposit rollovers.