There was much to cherish for Pakistan’s tech entrepreneurs in 2019, be it their own growth trajectory or the progressive measures taken by the regulator.

Investment-wise too, there was a fair bit of hype, starting with the highest-ever Series A round by Bykea, only to be broken by Cheetay, which again lost the mantel to Airlift.

But beyond these star players, how did the overall investment landscape look like and what were the key trends? We compiled some data, using public news and own sources, plus support from PriceOye.pk and the National Incubation Centres.

Based on that, Pakistani start-ups raised a total of $42.1 million across 28 deals. This represents a money-wise increase of 71 per cent from $24.55m in 33 deals (as per an ecosystem report) last year.

For those clueless about what these numbers signify, let’s take figures from the region and try to compare. While India with its $14 billion of startup investments is way too ahead for any reference, some countries in the Middle East can better serve that purpose. Egypt, for example, recorded 141 deals and raised around $99m, according to data from Dubai-based database Magnitt. Before you get disappointed by the lack of money locally, it’s worth mentioning that $42m of the Egyptian total came from Swvl, the smart bus service that has since expanded to Pakistan.

Now into the details. The average investment amount was about $1.56m, again in part to the huge rounds raised by the three above-mentioned startups. Take them out of the data, and the mean ticket value drastically goes down to $600,000.

Airlift, Cheetay and Bykea ride away with the lion’s share of overall investment, picking up $27.7 million in 2019

Sector-wise, transport and logistics was the undisputed leader in terms of both fundraising and deals, accounting for roughly 72pc of the overall value. E-commerce was a distant second with respect to financing, while tying along with education and health as per the number of deals.

Unsurprisingly, most of the deals were at seed stage, accounting for 18 of the 28, representing a total value of $7.4m. Over half of that came from TelloTalk’s $1.6m and Airlift’s $2.2m, which was the only startup to do two rounds of financing in 2019. Meanwhile, nine startups closed Series A worth a cumulative $34.5m.

Almost all the money was poured into the three major cities, with Lahore taking a clear lead with $25.8m, and Airlift and Cheetay making up for around 85pc of the aggregate across six deals. Meanwhile, startups from Karachi yielded $12.55m, but saw 14 deals recorded, putting it ahead on that front. Islamabad followed with roughly $3.15m in six companies.

Yet another interesting feature was the disproportionate representation of foreign university graduates among this cohort, as 13 of those raising a round had at least one founder who did their higher education (mostly undergraduate, but not always) abroad. Their dominance was even stronger in terms of money raised, with these returnees picking almost $33m of the aggregate amount, which comes in at an extraordinary 78pc.

Whether their education means some extraordinary skill/aptitude compared to the local graduates or it represents a better network at disposal giving them access to wealthier individuals and those in positions of power is a whole another debate. And it’s not exclusive to Pakistan either. Even the United States, which is far more meritocratic than us, has its own share of such cases, and the influence of elite schools — mostly Stanford, MIT, Harvard, Berkeley etc — is well-documented in all spheres of control.

Among the local graduates, however, there was no single standout school that seemed to drastically improve the startup’s fundraising chances. In terms of professional background too, as many as 10 startups had at least one founder with international work experience and these accounted for close to three-quarters of the aggregate amount.

Meanwhile, only two had a team of fresh graduates. That again is not surprising as 22-year-olds barely have the financial stability to pursue a journey of entrepreneurialism, that too experimenting with new business models. Unsurprisingly, there was also a striking imbalance with respect to gender as only five of the 27 startups had at least one woman in the founding team.

Moreover, two-thirds of these companies had at one point been part of an incubation programme but only fetched around 31pc of the total invested amount. On the other hand, the non-incubated startups raked in over $29m of the overall funded value.

As for the most active investors, there wasn’t a clear winner. But at least five put money in two ventures each and the overall landscape was led mostly by institutional players, including venture capital and corporates.

However, given the general confidentiality concerns of startups, it is not possible to verify many of the figures and should thus be taken with a pinch of salt. Plus, a lot of this money comes in tranches, so this amount doesn’t mean it has been invested already.

For more accurate figures, stakeholders in the ecosystem will have to be more transparent about their milestones, including but not limited to investment rounds.

Published in Dawn, The Business and Finance Weekly, January 20th, 2020