Pakistan’s nascent startup ecosystem takes a nosedive as economic crisis sets in

Mahua Venkatesh

New Delhi, July 14: Is Pakistan’s worsening economic crisis starting to impact its startup ecosystem, which was abuzz until recently? With the most watched startup in Pakistan – Airlift, announcing its closure due to lack of funding, many fear there may be no more as many of them have prioritized the rapid expansion and funding rather than sustainability.

“While the global recession and the recent downturn in capital markets have affected economic activity across the board, they have had a devastating impact on Airlift and made its closure inevitable. On July 12, Airlift’s operations will be permanently closed,” said the grocery and pharmacy delivery man. app-based startup that has attracted more than $85 million in funding, said in a statement.

The airlift was billed as the country’s first unicorn. A unicorn is a startup with a valuation of $1 billion or more.

According to the Express Tribune, Pakistani startups were sizzling like a hot Karachi afternoon last summer, bringing in record funding and creating positive buzz across the country.

“Fast forward to the summer of 2022 and a bitter cold blows through the global startup ecosystem as recession fears loom and the era of easy money and low interest rates comes to an end. end,” the newspaper said.

The simmering economic crisis and growing political uncertainty in Pakistan have also hit the fledgling industry.

The South Asian nation has more than 3,700 startups. Besides Airlift, Bazar, Bykea, Jugnu are some of the top startups.

Sudip Kr Goswami. The co-chairman of Assocham Startup Council told India Narrative that the uncertainty of the global economy has hit the startup ecosystem across the globe.

“Like the US and China, India has a much wiser and stricter policy and framework for the startup industry. The policy is transparent and based on global standards, which makes it easier to fund,” said Goswami, adding that the framework is regularly modified to adapt to the situation. changing dynamics.

“I don’t know if that’s the case in Pakistan,” Goswami said.

He also noted that the global economic uncertainty has also impacted India’s startup industry.

However, most Indian startups have now shifted gears and are focusing on maintaining their operations rather than expanding, although 2021 has brought joy to the industry as more than 30 companies in India have risen to the top. the prestigious Unicorn list.

A strong and well-thought-out startup ecosystem is fundamental to the economic growth of any country as it creates jobs, increases tax revenue while improving the quality of life.

Startup Blink, a global research center that tracks the startup ecosystem, said that as an entrepreneur, location will greatly influence your startup’s chances of success.

The Express Tribune article also pointed out that there are a few startups and founders who have shown the vision to build their businesses more sustainably in anticipation of this type of macroeconomic earthquake. But the focus should be on quality.

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