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Is Pakistan the Next Leading Investment Opportunity?

Darcy Alexander
Darcy Alexander

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Is Pakistan the Next Leading Investment Opportunity?

Have you ever thought about investing in a Pakistani startup? Probably not, right? Let’s face it, Pakistan has historically confronted years of corruption, an unstable infrastructure and a complicated business environment. But what if I told you that legislation has evolved, encouraging entrepreneurship, investment and mass adoption of technology – in turn creating a more stable economy. Would you consider investing now?

Since the implementation of new Government initiatives, this densely populated country, with a growing consumer-led economy and the right intrinsic drivers is attracting startups – meaning Pakistan is quickly becoming a leading investment opportunity. Located in the initial stages of the S-curve of entrepreneurship, Pakistan has been likened to ‘the Indonesia opportunity that most missed’ and is arguably “the largest untapped market, with plenty of greenfield opportunities and little competition for both startups and venture capitalist investing.”

Consumer spending in Pakistan
Emporium Mall – Lahore
There are five main aspects as to why Pakistan is becoming a great investment opportunity;

A youthful population with a growing middle class

Home to over 220 million people and a yearly 6% projected growth through to 2026, Pakistan is one of the fastest-growing economies in Asia. Due to improvements in digital infrastructures and the rapid adoption of technology by its people, Pakistan has declared that people living below the poverty line has halved in the last ten years.

64% of the nation are below the age of thirty, meaning that over half of the population are digital natives. The improvement of connectivity, along with access to affordable data, ($0.69 per 1GB – one of the lowest in the world) has rapidly driven digital consumption. Witnessing a four-times growth in data-enabled mobile connections in the last three years, Pakistan has gained 252 million telecoms and broadband subscribers combined, and 35 million active social media users. E-Commerce has also shown record growth of over 35% in the first quarter of the fiscal year. This taps into over 65% of the population who reside in rural areas – allowing businesses unprecedented access to an otherwise untouched populace.

Disposable income has also increased, with a significant rise in middle-income households expected to be established by 2025. Boasting more than 360,000 software developers, Pakistan has a large and growing technical talent base – more than Indonesia, Egypt or the UAE. Currently, there are estimated over 10,000 Pakistanis working in Silicon Valley, with a large proportion looking to return home to raise their children or take care of elderly parents – bringing with them an abundance of knowledge and skills which can be used to launch startups and/or influence upcoming generations.

“We are now looking at Pakistan because it has all the intrinsic drivers to make it the next big South Asian market for startups,” says Ozair Ali, Co-founder/COO, Alter Global: “it has a large population, a burgeoning middle class, increasing internet penetration, and existing incumbents in key industries rife for disruption. Yes, the country has challenges but the infrastructure here is comparable to countries such as Bangladesh.”


Cellular mobile, FLL & WLL Subscribers


Broadband Subscribers

Broadband Penetration



Mobile Wallets

Government initiatives for increased investment

Pakistan’s digital participation has previously been stymied by weak infrastructure, low internet penetration rates and a lack of online payment services. According to Shahjahan Chaudhary, director of the National Incubation Center Karachi, “excessive taxation, constraints on capital flows and bureaucratic headaches” have presented significant challenges for growing tech startups, adding that the government should be thinking of ways to support the local ecosystem to “truly benefit from its talented entrepreneurs.”

The government listened. Cultivating a business environment that supports entrepreneurship and innovation has been prioritised by the current government. As stated in the Prime Minister’s first speech to the Nation, PM Imran Khan pledged The “Doing Business Reform Strategy 2018-21” in a commitment to promote Pakistan on the investment map.

Recognising the importance of simplifying business, prioritising technological transformation and improving the investment climate has led to almost 300 reforms being implemented since 2016. This has resulted in Pakistan climbing 39 positions in two years in the East Of Doing Business (EODW) rankings. Scores bettered in the following categories: starting a business, registering property, construction permits, paying taxes, getting electricity and trading across borders.

The launch of the “Digital Pakistan” initiative in December 2019, headed by former Google executive Tania Aidrus, revealed a determined agenda to increase access and connectivity, enhance digital education and introduce a new era of e-governance. Pakistan’s digital transformation movement “is central to the government’s plan to create an enabling environment for tech startups and stimulate economic growth,” says Miriam Partington, DW.

In a bid to increase investor confidence and create a stable political landscape, Prime Minister Khan has pledged to rid Pakistan of chronic corruption. So far, the government has been successful in supporting the startup space by:

Pakistan Prime Minister
Prime Minister Imran Khan

A successful investment landscape

“I set up the operations for my startup in Pakistan in 2016 because it allows me to operate at a fraction of the costs compared to the UK and access qualified talent,” says Sana Shah, Startup founder from Pakistan.

Even in the difficult climate of Covid-19, Pakistan has seen a 63% increase in venture capital funding between 2019 and 2020. In fact, 2020 saw a record high level of VC funding, increasing across all quarters. According to Magnitt’s 2021 Emerging Venture Markets Report, $77 million was invested in Pakistan-based startups, resulting in a 97% year-on-year increase. Magnitt also reported that 2020 proved follow-on capital would flow to Pakistan quickly for those startups that execute well. Similar to the MENA region, Covid-19 impacted industries led the way in Pakistan with E-Commerce, FinTech, Healthcare and Education startups seeing the most transactions.

With only 13 locally-established venture capital funds, the majority of funding for Pakistani startups has come from abroad, bringing foreign and experienced funding. This allows the local startup environment to thrive beyond its boundaries and cultivate local talent.

The triumphant return of Wapistani’s

Forming one of the biggest tech talent pools in the world, Pakistanis residing abroad have gained skills, knowledge and experience working in more mature ecosystems. Now, they’re keen to seize opportunities back home. Whether it’s becoming founders, advisors or investors, the two million Pakistani’s living and working abroad form a well-connected and interested diaspora. Many are looking to “help their country’s ecosystem in its next phase of growth,”says Aatif Awan, Founder & Managing Partner at Indus Valley Capital.

The term ‘Wapistani’ was coined by Awan’s early-stage venture capital fund after announcing the launch of their dedicated programme at an online conference by Nest I/O in 2020. The aim is to create more jobs and fuel economic growth by bringing Pakistani’s home within the next 2 years. The programme is designed to make repatriation easier, with a particular focus on three main areas; career, concierge and community.

The dedicated programme will help returning Pakistani’s make the right career decisions through personalised introductions and connections with top startups looking for senior or specialised talent. The concierge will be dedicated to helping returning Pakistanis make important life choices related to housing, children’s schooling and medical care. And finally, the community will comprise a network of fellow Wapistani’s who are moving back home, at the same time.


Now you’ve read about the landscape in Pakistan, I’ll pose my original question again: would you invest in a Pakistani startup? After all, it could just be the next undervalued opportunity. What was once considered a risky investment, is now being seen as a high-yield opportunity. With a young, tech-savvy population, a market of over 220 million people with a burgeoning middle class, increasing levels of local capital, growing opportunities for entrepreneurs, decreasing levels of corruption nationwide, a more stable political landscape under Prime Minister Imran Khan, and a huge talent pool of highly skilled professionals, this consumption-led country has all the right intrinsic drivers to yield potential business, which is why investors are already growing increasingly confident that Pakistan has the next exciting business propositions.

اور آخر میں میں آپ کو ایک زبردست دن کی خواہش کرتا ہوں

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