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VC activity in Q3 2021 across Pakistan has continued the remarkable peak the ecosystem has been witnessing throughout the year. Remarkably, startups in Pakistan raised almost double the funding in Q3 2021 alone than the entirety of H1 2021 as recorded in our Pakistan Q3 2021 Venture Investment Report. This in turn sets another quarterly and half-yearly record for the booming VC ecosystem. It was 10 deals closed in August that accounted for 75% of all funds raised in Q3 2021, driving the ecosystem’s year-over-year growth to a stellar 288% compared to Q3 2020.
There were many hallmarks to Pakistan’s impeccable VC growth in 2021, whereby Transport & Logistics (T&L), FinTech, and E-commerce startups raised 85% of all funds by Q3 2021, driving Pakistan’s 240% YoY growth in funding compared to full-year 2020. Amidst one of the most active years for investor participation in the Pakistani startup ecosystem, where US-based investors accounted for almost half of all active investors in Pakistan this year, deal distribution trends were particularly interesting for this geography. Investors showed great interest in Early-Stage funding rounds ($500k-$3M), accounting for 40% of all deals closed by Q3 2021. This is particularly remarkable compared to more developed Emerging Venture Markets like KSA and Egypt, where Early Stage rounds accounted for 45% and 30% respectively.
This particular trend does not only signify a healthy 2021 deal flow but also sets the stage for a consistent drive in startup growth capital coming into 2022. So who were the startups raising the highest funds in that category? We explore the top 3 funding rounds under $3M in Q3 2021:
Oraan- $3M SEED round
In a big win for the Pakistani FinTech space in general, and Pakistani women entrepreneurship in specific, the women-led FinTech Oraan closed a stellar $3M to modernize a crowdfunding tradition. Oraan is disrupting ROSCAs (rotating credit and savings associations), or committees of people who contribute money to a pool distributed to a member each month. This model has been widely adopted informally in Pakistan amongst families and communities, which the Pakistan-based FinTech has set forth to decentralize and automate.
Based on Oraan’s research, only about 7% of Pakistani women are financially included, creating an even wider gap amongst the 6% Pakistani communities account for in the global unbanked demographic. By developing an automated and widely accessible ROSCA, Oraan is not only empowering the unbanked but is also aggregating dynamic financial data that can further expand their services and potential. The Women-led startup launched with a $185K angel investment in 2019 and has raised $300K in SEED & Pre-Series A rounds before their latest $3M fundraise. Their latest round, adding a strong backing to their network from Zayn Capital, Wavemaker Partners,i2i Ventures, Hustle Fund, Haitou Global, and Plug and Play Ventures.
Walee- $2.7M SEED round
Despite investor focus on more booming sectors like T&L and E-commerce, a content marketing startup managed to raise funds for a different function of digitization. The influencer content marketing platform Walee, raised $2.7M in a SEED round to fully expand its SaaS digital marketing operation, and capitalize on its influencer marketing platform.
Since its launch, Walee grew its following and influencer network, aggregating an impressive network of 50,000 Micro to A-list influencers collaborating with more than 5,000 brands subscribed to the platform. This equity financing from communications group Z2C comes as Walee scales to meet strong regional demand pertaining to influencer search, campaign management, and measurement. In a great show of Tech stack and business acumen, the Pakistan-based startup also offers feature-rich enterprise solutions in the region, providing sentiment and semantic analysis for social and digital media content, in multiple regional languages including Arabic.
Freightix- $2.3M Pre- Series A
Freightix joins the list of most anticipated T&L ventures, integrating Tech, data, and interconnectivity to streamline shipping operations across Pakistan. The Pakistan-based startup raised a $2.3 M Pre-Series A round backed by SparkLabs Ventures and South Korean car manufacturer Daewoo. This comes amidst local and global investor interest in the democratization and decentralization of shipping, where instead of the traditional fleet owning models, Pakistan-based T&L startups are connecting suppliers to shippers in access over ownership, asset-light, models that are only made possible through Tech-integrated platforms.
Driving the 180% YoY funding growth in Pakistan-based T&L startups by Q3 2021, are some of the most innovative ventures coming from the region including Airlift Technologies, closing Pakistan’s highest funding round to date, Birdgelinx raising a stellar $10M Seed round, and Rider which most recently raised $2.3M to fuel its journey into Tech-driven, customer-centric, solutions to last-mile delivery in Pakistan.
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