One market broke
records. The other
lost nine-tenths
of its funding.

Capital in this region is not scarce. It is unevenly distributed, and the distribution follows institutional confidence rather than need or talent.

Two curves

Pakistani startups raised roughly USD 347 million in 2021 and USD 331 million in 2022. By 2023 that had fallen to USD 75.8 million. In 2024 it fell again to USD 22.5 million — a 70.4% year-on-year decline, and the first half of that year saw just USD 3 million, down 92% year on year. 2025 brought a partial recovery to about USD 36.6 million, still roughly a tenth of the peak.123 It was the steepest decline among the emerging markets MAGNiTT tracks.

Over broadly the same period, Saudi Arabia deployed USD 750 million of venture capital in 2024, holding first place across MENA and taking around 40% of all capital deployed in the region, across a record 178 deals. In the first half of 2025 alone it deployed USD 860 million — up 116% year on year, and more than the whole of 2024.456

Figure 1

Pakistani startup funding, disclosed equity by year (USD m)

2021$347m

2022$331m

2023$75.8m

2024$22.5m

2025$36.6m

What actually explains the divergence

The tempting explanation is founder quality, and it is wrong. Pakistan's founders in 2024 were substantially the same people who raised USD 347 million in 2021.

What changed was the environment capital reads before it commits. Global rates rose and emerging-market risk was repriced everywhere — but Pakistan fell furthest because currency volatility, import restrictions and macroeconomic uncertainty made the exit maths unmodellable. When an investor cannot model an exit, they do not negotiate harder; they stop showing up.

Saudi Arabia's rise is the mirror image and is not primarily about oil revenue. It reflects a deliberately constructed set of institutions: sovereign-backed fund-of-funds activity, a regulatory environment built to be legible to foreign capital, and public targets that give investors a policy direction to underwrite against.

Capital does not follow need. It follows the ability to model an outcome.

Why a social enterprise should care about a VC chart

We are not a startup and we do not raise venture capital. We pay close attention to these numbers anyway, for three reasons that apply to anyone building an organisation across these two markets.

The domestic funding route in Pakistan is closed for now

Any plan that assumed local risk capital would fund a social venture through its early years has to be rewritten. At USD 22–37 million a year across an entire national ecosystem, there is no meaningful pool for anything with a blended or below-market return profile. The realistic capital sources are institutional, philanthropic and increasingly regional.

The Gulf is where the deployable capital sits

That is a straightforward reading of the numbers rather than a strategic preference. It also shapes what an organisation has to be able to produce: capital deployed through institutional channels arrives with reporting requirements attached, and those requirements are the ones we have written about elsewhere — baseline, boundary, attribution, verification.

Ecosystems are built by evidence, not enthusiasm

Both markets are full of well-intentioned community activity — accelerators, demo days, mentorship networks, volunteering platforms. Almost none of it is measured against outcomes. Saudi Arabia's own experience is instructive: the national volunteering platform passed 1.2 million registered volunteers, six years ahead of the Vision 2030 target, and a registered volunteer remains an input metric.7

The constraint on both ecosystems is the same, and it is the constraint we exist to address: too few organisations can demonstrate what their activity actually produced.

What we take from it

Three operating conclusions, stated plainly because they shape how we build.

• Do not build a model that requires domestic risk capital in Pakistan. Build one that earns revenue from delivery and advisory work, and treats grant or institutional capital as catalytic rather than as the operating base.
• Build the reporting capability before it is demanded. Institutional capital arrives with a results framework attached. An organisation that has to construct one under deadline will produce a weaker version than one that designed it in.
• Treat verified track record as the scarce asset. In a market where funding has fallen 90%, the organisations that keep operating are the ones that can show what happened last time — not the ones with the best narrative.

The uncomfortable version of all this: a funding collapse is a filter, and it does not filter for quality of intent. It filters for whoever can produce evidence a cautious investor can act on.