Pakistan recorded the most financial revenue from startups in the previous year. With a 450 percent increase in funding and over $365 million raised, the industry thrived like never before.
If you follow Pakistan’s financial news on a daily basis, you would know that Airlift and Bazaar alone have raised a capital of $125 million in 2021. They have been the most prominent among all the other startups.
The emerging small and large business initiatives have revolutionized the e-commerce, technology, and transportation sectors. The last two years have been the major contributor to the growth of startups in Pakistan. However, there are a lot of gaps to be filled if we want to compete with the global standards of a successful business.
The Progression Of Small Businesses In Pakistan:
Pakistan is becoming the hub of small-scale businesses that are eligible to obtain investment from banks and public markets. However, out of a total of 60,000 registered businesses, only 576 are mentioned in the Pakistan Stock Exchange list. The rest remain identified by the Securities and Exchange Commission of Pakistan, but have no access to capital. So many businesses that have the potential to generate revenue do not obtain the financing that could lead to their growth and create employment opportunities in Pakistan.
Private equity and venture capital are two factors that can provide support to small and medium-scale businesses. Not only will additional funds be a source of growth for these businesses, but will also help them get on the right track. With the assistance of professional investors and counselors, they can create successful business models and improve their likelihood of success. Pakistan also favors international investors, so they can turn in their funds and benefit from the success of businesses operating within the country.
Why Is Pakistan A Safe Haven For International Investors?
Pakistan is a large, untouched market whose growing start-up potential can generate various benefits for international investors. The new business models have the potential for the international venture as well as private equity firms. The population of the country which is mainly composed of youngsters also serves as an asset for the country when it comes to generating income.
The Lean Towards Digital Payments
As we notice a surge in digital payment platforms and e-commerce, Pakistanis start to switch from cash to digital payment methods. However, most of the population still buys with cash and does not keep a bank account. Though, when we look at the increasing internet user base of the country, there seems hope for the switch.
Eliminated Language Barrier
Additionally, most of the youngsters within the country are fluent in English as it is the standard language for schools, courtrooms, and various organizations. This makes Pakistan a more approachable market for foreign investors. Various discussions and business meetings take place that has significantly contributed to the growth of start-ups within the country.
At the same time, entrepreneurs are also leaning more towards targeting the local market needs instead of copying similar business models from other countries. They are working to generate novel and innovative ideas to efficiently generate demand for a particular product or idea.
As Pakistan is a fluctuating economy that needs international support to stabilize the business sector, it is imperative for the state to provide a safe platform for foreign and local investors. The situation after the introduction of covid resulted in a surge in start-ups, which can be used by Pakistan to extract financial benefits.
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