In a significant step toward boosting Pakistan’s startup landscape, sAi Venture Capital is set to launch the country’s first local currency venture capital fund in seven years.
The endeavor is aimed at securing approximately $10 million in investments, primarily from local sources, to fill the void left by foreign investors. This initiative carries a ray of hope amidst the backdrop of high-interest rates and global economic uncertainties.
sAi Venture Capital has strategically channeled its investments into critical sectors, including healthcare, agriculture, and education. Now, it embarks on a new frontier by venturing into the IT services sector, forging alliances with international partners who are at the forefront of technology.
Ahsan Jamil, the co-founder of Sai Venture Capital, said the fund is currently 40% committed, and it recently received approval from the Securities and Exchange Commission of Pakistan (SECP). An ecosystem doesn’t “develop until you have local smart capital,” Jamil was quoted as saying in a Bloomberg report.
Why local currency VC Fund is needed?
Pakistan’s startup ecosystem witnessed a significant funding downturn during the second quarter of 2023 (April-June), reaching its lowest point since the first quarter (Q1) of 2020, according to data compiled by Data Darbar. This marked a staggering 95% decrease compared to $104.1 million the previous year.
During the 2023 Q2, Pakistani startups managed to secure a mere $5.2 million in funding – a substantial 77.5% drop every quarter from $23.1 million in the first quarter of 2023, indicating enormous volatility in Pakistan’s ability to attract investors.
The launch of local currency VC fund marks a promising development for Pakistan’s startup ecosystem, as it strives to attract local capital and expertise, fostering innovation and growth in key industries. The sAi Venture Capital initiative has the potential to reshape the entrepreneurial landscape in the region.
Pakistan Startup Fund
In a related development, Pakistan’s Ministry of Information Technology and Telecom has announced to launch ‘Pakistan Startup Fund’ to draw venture capitalists to Pakistan and boost the startup culture in the country.
Muhammad Zohaib Khan, Chairman of Pakistan Software Houses Association (P@SHA), said that the ministry is actively working on establishing the Pakistan Startup Fund, to attrat venture capitalists and support Pakistan’s startups. This fund will utilize resources from IGNITE, the National Technology Fund, which is supported by the federal government’s telecom industry revenues.