TLDR:
- Pakistan’s startup ecosystem is facing funding difficulties with zero dollars raised in the first quarter of fiscal year 2024.
- Global venture capital funding saw a slight recovery in Q1FY24, but the number of deals dropped significantly.
In the first quarter of fiscal year 2024, Pakistani startups faced a funding crisis, raising zero dollars. This marked the lowest total in over five years, highlighting the challenges in the local startup ecosystem. On a global scale, venture capital funding showed a modest recovery in Q1FY24, reaching $95.7 billion across 7,520 deals. While this represents a 14.2% increase compared to the previous quarter, the number of deals dropped by 36.9%, indicating a challenging environment for startups seeking funding.
The regions of North America and Asia, which historically account for the largest share of VC investments, are still struggling to bounce back. Exit events, such as initial public offerings and mergers, which drive return on investments in VC, remain rare globally. The exit value of VC was at its lowest since Q2FY15, emphasizing the lack of liquidity events that can offer returns on initial valuations. This global trend may impact Pakistan’s entrepreneurial finance landscape, with local investors facing challenges in closing subsequent funds.
Overall, while there are early signs of a recovery in the global venture market, there is still a long way to go before reaching pre-crisis levels. The challenges in VC funding and exit events highlight the complexities facing both local and global startup ecosystems in the current economic climate.
