Pakistan is embarking on an ambitious sovereign venture capital fund launch, aimed at attracting global investors back into country’s startup ecosystem. Umar Saif, Pakistan’s interim Minister for Information Technology and Telecommunications and a prominent figure in the country’s startup landscape, unveiled the initiative in an effort to revitalize the local entrepreneurial scene.

Initially, Pakistani government aims to invest $10Mn annually via the fund, with primary focus on supporting local early-stage startups who already have external commitments. The range of investment could be between $2Mn-$3Mn depending on company sizes. This initiative is set to address a critical gap in the funding ecosystem for emerging businesses in Pakistan, and if successful, can breathe new life into Pakistan’s startup ecosystem.

“Pakistan is setting up this fund where they want to entice global investors at an early stage,” Saif commented on the development. The Pakistani government, it seems, aims to provide additional incentives for global investors to engage with and support early-stage Pakistani companies. By establishing a dedicated venture capital fund, the country hopes to rekindle interest among international investors, positioning itself as an attractive destination for capital deployment in the startup space.

The backdrop for this strategic move is the recent downturn in fundraising by Pakistani startups. According to data from Invest2Innovate, the country witnessed a significant decline from the record-breaking $700 million that had been secured by startups in 2021 and 2022. While economic and political instability have greatly influenced that downturn, overall global startup funding scenario, specially in emerging markets, has also contributed its bit.

Beyond the venture capital fund, Umar Saif envisions a holistic approach to the development of Pakistan’s tech industry. Recognizing the imperative to enhance the skills of the workforce, he proposes the implementation of a mandatory internship program for university students. This proactive measure aims to address the skills gap among graduates that has been identified as a bottleneck for the growth of the tech sector.

The move to attract global investors to engage with early-stage Pakistani companies also underscores a broader strategy to position the country as an attractive destination for international capital. The success of this initiative could enhance Pakistan’s standing in the global investment community and stimulate foreign direct investment in the technology and startup sectors. Additionally, Saif’s vision extends to the establishment of a network of offices for freelancers, providing infrastructure and support for independent professionals. This initiative aligns with the broader goal of catalyzing the growth of the tech ecosystem in Pakistan and fostering a conducive environment for innovation.