Pakistan startups raised over $74 million in funding through 11 disclosed deals, significantly higher by 121% from $33.5 million raised across eight disclosed deals in 2024, according to a report recently released by think tank Invest2Innovate.
The country’s startups closed 16 deals of which 11 were disclosed, with total reported funding of around S74.23 million comprising both the equity only deals of $8.18 million and hybrid finance of $ 66.04 million, the report said.
The year 2025 witnessed a sharp shift towards hybrid financing, in contrast to 2024 that remained equity-heavy amid prolonged funding drought conditions.
- Equity financing involves selling a stake in the company to investors in exchange for capital, which does not require repayment but dilutes the founders’ ownership and often gives investors a say in decision-making.
- Debt financing means borrowing money that must be repaid over time with interest, allowing founders to retain full ownership, though it creates fixed repayment obligations that can strain cash flows, especially in early stages.
- Hybrid financing combines elements of both equity and debt.
A total of 11 disclosed transactions were recorded across pre-seed, seed, and Series A stages, along with five additional rounds with undisclosed or quiet ticket sizes. These included XpertFlow, Blink, VMNebula, Lean Outset, and Chrio.
The $74.23 million funding was primarily driven by large funding rounds such as Haball’s $52 million and MedIQ’s $6 million. These were complemented by seed-stage investments in BusCaro, Metric–Max CF-AI, ScholarBee, NewVative, Shadiyana, Qist Bazaar, and myco.io.
Read more: Pakistani fintech Haball secures $52mn funding to grow Islamic finance business, plans Middle East foray
Key startup sectors included fintech and healthtech, edtech, wedding-tech, sports tech, mobility, logistics, energy, internet of things (IoT), entertainment, and e-commerce.
The final quarter of 2025 proved to be a signal-setting period rather than a volume-driven one. While the headline deal count remained subdued and most of the $74.23 million in equity and hybrid financing had been deployed earlier in the year, the last quarter revealed decisive structural shifts.
Notably, new categories emerged as alternative debt and Shariah-compliant capital moved into the mainstream, while exits validated growth-to-liquidity pathways.
Female founders and mixed-gender teams remained central to the 2025 deal flow. Female-founded and co-founded startups—including Shadiyana, BusCaro, Metric, MedIQ, and Lean Outset—accounted for eight of the 11 disclosed deals. These spanned pre-seed, seed, and Series A rounds across fintech, mobility, healthtech, and wedding-tech sectors.
Mehwish Salman Ali, Founder and CEO of Data Vault Pakistan and ZahanatAI, said the rise of women-led startups was an encouraging sign for the country’s entrepreneurial landscape, as “this trend will not only inspire more female professionals to launch startups but will also empower women employees within startups to unleash their talent with creativity and dedication”.
She added that women-driven initiatives were likely to introduce new ideas and generate sustainable economic activity across the country, extending beyond urban centers into rural areas.
“I am optimistic the trend will continue n 2026 and more female entrepreneurs will lead the startups, particularly in tech and artificial intelligence,” she remarked.
The final quarter also highlighted diversification in venture-scale financing. KalPay secured structured Shariah-compliant debt from Accelerate Prosperity, underscoring the shift of Shariah-compliant debt from a niche instrument to the mainstream.
This development positions debt financing as a viable structure for fintech startups, particularly in education and BNPL-focused ventures, expanding access to capital beyond traditional equity routes.
Meanwhile, Agrilift and Echooo AI—both backed by Accelerate Prosperity—reflected a parallel trend of debt financing diversification across non-fintech verticals, including agri-tech, climate-linked productivity, and creator economy infrastructure.
Collectively, these developments signal growing confidence in debt as a financing tool, enabling broader capital deployment across climate, agriculture, and digital services as the ecosystem moves toward 2026.
Azfar Hussain, Project Director at the National Incubation Center Karachi, said 2025 marked a period of correction and maturity for Pakistan’s startup ecosystem. He noted that capital became more selective, filtering out hype-driven ventures while strengthening founders focused on solving real-world problems.
Looking ahead, he said growth in 2026 would increasingly favour founders who invest in governance, product depth, and regional scalability rather than pursuing rapid expansion or vanity metrics. According to him, the ecosystem is entering a phase where business-first thinking outweighs fundraising-first narratives.
He further emphasised that startups with a strong understanding of compliance, balance sheets, and institutional collaboration would be best positioned, as capital would increasingly flow toward ventures combining impact, resilience, and commercial viability.
Last week, another think tank Data Darbar reported that startups in Pakistan had observed a modest recovery in equity funding during 2025, with capital raised climbing to $36.6 million from $22.5 million a year earlier, reflecting an increase of nearly 63%.
However, despite the uptick, funding levels remain well below historical peaks, as shown by data released by Data Darbar.
“Based on press or social media announcements, startups raised approximately $36.6 million in equity capital across 10 rounds, while four additional transactions did not disclose dollar values,” read the report.
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