kistan’s startup ecosystem witnessed a significant downturn in 2024, as venture capital funding shrank by 70 percent to just $22.5 million compared to $75.8 million in 2023, according to data compiled by Data Darbar.

The number of funding deals also dropped sharply by 61 percent, with only 15 deals closed this year, down from 39 last year. Despite this decline in deal volume, the average size of investments rose markedly.

The average deal size climbed 68 percent to $3.75 million, while the median deal size surged 158 percent to $3.1 million, indicating that investors are concentrating on fewer but larger bets.

Early-stage funding remained dominant, with Pre-Series A rounds constituting 48 percent of total disclosed capital, and seed-stage funding accounting for 38 percent. Series A funding, however, fell to just 14 percent of the total, down from 25 percent in 2023. Notably, there were no Series B deals reported during the year.

The persistent gender disparity in startup funding was evident again in 2024. Startups founded solely by men received 75.6 percent of the total funding, while mixed-gender teams secured 24.4 percent. No funding was recorded for female-founded startups.

Debt financing provided some relief amid the equity slowdown. A total of $20.5 million was raised through 28 debt deals, with fintech attracting the largest share at 46.7 percent, followed by e-commerce at 37.8 percent. Real estate and cleantech sectors received 8.9 percent and 6.7 percent, respectively.

Mergers and acquisitions (M&A) activity also slowed, with only five deals recorded—a 44 percent decline from nine deals in 2023 and significantly fewer than the 17 deals seen in 2022. In a shift from previous years, 80 percent of this year’s M&A transactions were domestic. From 2020 to 2024, a total of 38 M&A deals took place, including 25 cross-border and 13 domestic deals. Product-based companies accounted for 14 deals, service firms 18, and mixed business models six.

In contrast to the sluggish startup scene, Pakistan’s broader tech sector posted strong growth. The information and communications technology (ICT) sector expanded by 8.5 percent in 2024, significantly outpacing the country’s overall GDP growth of 1.73 percent. ICT exports surged 33.7 percent year-on-year to $3.6 billion. Computer services made up the bulk of this total at $3.1 billion, growing 38.5 percent, while information services exports experienced a remarkable 341.5 percent increase to $22.4 million. Telecom services contributed $550 million to exports.