The Quest for Unicorns
Start-ups are part of Pakistan’s most recent success stories withtechnology acting as the great enabler. Pakistan is a country ofunequal opportunities driven largely by the privileges of birth. Thehigher up people are on the privilege scale, the greater their accessto quality in terms of education, learning, health, and every other resourcethat determines their quality of life. The digital space has become a hugeequaliser in this respect.
Smartphone penetration has provided access to information andeducational resources, previously beyond the reach of thousands ofPakistanis, so that today start-ups represent the best chance for Pakistanisto leapfrog into better opportunities. New vistas have opened for youngPakistanis, enabling them to overcome entrenched barriers, perhaps evenmore so for women, who have found a gateway to validate their talent thatmay have been unattainable before.
Along with this has come a tremendous sense of excitement andpossibility. Most significantly, start-ups have become important contributorsto Pakistan’s economy, so much so that as per the recent budgetannouncement, they are slated to come under the tax net. On this score,the government must tread with care. This is still a fragile ecosystemoperating in a fragile economy, and economic difficulties have alreadydented the progress achieved in earlier years. According to the PakistanExport Board and the Pakistan Software Houses Association (P@SHA),the highest annual funding obtained by a start-up venture was in 2021and raised approximately $365.8 million. The funding trajectory then wentfrom $75.6 million in 2023, to $22.5 million in 2024, and so far in 2025 thefunding raised so far has been $196 million. Clearly, the momentum hasbeen stymied and recent ‘connectivity’ issues have created multiple issuesfor start-up entrepreneurs and, in fact, pose a tangible threat to the furtherdevelopment of the ecosystem. Microsoft’s recent decision to close itsoperations in Pakistan after 25 years is another unfortunate developmentand a strong indicator of the seriousness of the mounting issues that needaddressing by all stakeholders and most of all the government.
The dream is of course for Pakistan to have its own unicorn, and thisis entirely possible given the success of overseas Pakistanis, such asAmir Husain, founder of SparkCognition and Sauleh Asif, whose start up,Cursor, has reportedly been valued at $10 billion in the US. But in Pakistan,given systemic challenges, the idea of a new venture crossing the onebillion dollar value threshold remains elusive. And yet, the potential isthere. Start-ups and the entrepreneurship ecosystem can, if given the rightopportunities and incentives, bring about a transformative change in theeconomy and create significant employment opportunities. They have thetalent, the drive and the passion. All they need is to be facilitated.
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