By Faiza Virani
Pakistan鈥檚 once-promising tech startup ecosystem is in crisis. Once poised to be the next emerging-market for digital innovation, the country is now facing high-profile exits, as well as an 88% drop in startup funding.
July will witness the closures of giants such as Careem, which will wrap up its ride-hailing operations in the country by July 18. Meanwhile, several high-profile startups have shuttered operations in the past 18 months, including:
Airlift (Raised $85M, shut down 2022)
Swvl (Exited Pakistan 2022, NASDAQ-listed)
VavaCars (Exited in 2023)
Truck It In (Pivoted then folded in 2024)
MedznMore and Jugnu (ceased or paused operations)
Dastgyr, Bykea, and others are reportedly in survival mode
Between 2021鈥2024, over 55 funded startups either shut down or pivoted radically, according to Bloomberg.
Startup funding collapses
According to data compiled by Invest2Innovate (i2i), startup funding in Pakistan plummeted from $355 million in 2022 to just $43 million in 2024 鈥 an 88% decline.
In 2025, Haball, a Pakistan fintech firm, raised $52 million to expand its shariah-compliant supply chain financing and payments services. However, this could be an anomaly in a wide capital glut that the industry is facing.
For perspective, India attracted $7.5 billion in startup funding in 2024, while Bangladesh attracted $140 million.
Industry leaders are citing the following reasons for the industry in decline: a diminished commercial viability amid persistent rupee depreciation (The rupee has depreciated 30% since 2022) as well as regulatory bottlenecks, tax unpredictability.
Maheen, a tech founder in the education sector recently put it: 鈥淵ou can鈥檛 expect global tech to stay when the internet breaks every other day and your investor can鈥檛 send money in without six approvals.鈥
Skills and infrastructure decline
Over 5,000+ software developers have relocated to Canada, UAE, and Germany in the past 12 months, while 10,000 tech workers migrated from Pakistan in 2023, according to the Bureau of Emigration.
Universities have reported a drop in Computer Science graduate retention locally 鈥 from 73% in 2020 to 41% in 2024.
Freelancer remittances dropped from $400 million in FY23 to $290 million in FY24 鈥 a decline of 27.5%.
Meanwhile power outages averaging 6-8 hours daily in Lahore and Karachi are commonly reported while Internet speeds ranked 126th globally by Speedtest (June 2025).
Additionally, many startups now incorporate in Dubai, Singapore or Delaware to access foreign VC funding, stable banking and IP protection.
Furthermore, investors cite lack of dollar-retention accounts for tech exporters, as well as sudden tax changes and unclear digital services regulations.