Govt plans to earmark up to Rs2b for startup fund every year
The caretaker government has launched the first-ever Pakistan Startup Fund with the aim of attracting investment into information technology-related innovation projects.
For this initiative, the government has allocated Rs2 billion and it will provide a 30% grant annually for start-up ventures. Caretaker Federal Minister of IT and Telecommunication Dr Umar Saif launched the Pakistan Startup Fund at a ceremony on Tuesday.
The fund is aimed at catalysing investment into Pakistan and positioning the country’s startups as significant players on the global stage. Ignite National Technology Fund will take up the role of executing body to ensure transparency through an independent steering body to be tasked with overseeing the operations.
Speaking at the inaugural ceremony, the IT minister announced that the government would earmark up to Rs2 billion for the Pakistan Startup Fund every year. The fund is structured to have equity-free capital to help close a funding round for a startup, he said, adding that the fund had been designed to help startups search for external investment.
The minister elaborated that if a foreign venture capitalist would be evaluating a Pakistani startup for an investment of $1 million, it would need to invest only $700,000 while the startup fund would provide a grant of $300,000 to close the funding round. He further said that the fund would lower the risk for international investors seeking to pour capital into Pakistani startups. “With the Pakistan Startup Fund, we hope to create a value of at least Rs50 billion per year in the startup ecosystem.”
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Saif emphasised that the fund represented a transformative initiative in the realm of entrepreneurship and technological innovation. By focusing on the burgeoning potential of Pakistan’s startup ecosystem, the fund will help accelerate economic growth and innovation. It will underwrite the risk for venture capitalists by providing equity-free grants to the startups.
It will provide financial support by fostering an environment of innovation and entrepreneurship vital for the success and scalability of startups.
The minister called the event a unique opportunity for venture capitalists to delve deeper into the Pakistan Startup Fund, which would pave the way for exciting collaborations and open doors for a more innovative and prosperous future. Saif stressed that the Ministry of IT and Telecom would continue to support technological innovation and entrepreneurship. About $800 million has been invested in the startups over the past four years.
He pointed out that a network of eight National Incubation Centres (NICs) was supporting the startups and over 4,000 startups in the country were indicative of a vibrant entrepreneurial landscape. The ceremony was attended by local and international venture capitalists, investors, ambassadors, heads of tech companies and senior officers of the Ministry of IT and Telecom.
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