Inside Pakistan’s Tech Investment Boom: “It’s like sipping from a firehose”

When Kalsoom Lakhani and Misbah Naqvi launched i2i Ventures, a $15 million Pakistan-focused venture capital (VC) fund, in 2019, they expected to close three deals per year. They’re now signing that many contracts each quarter.

“I can barely keep up with the deal flow,” Lakhani told Rest of World. “My days are insane. My partner and I work anywhere between 10- and 14-hour days. I’m meeting about four to five new teams each week, in comparison to one or two a year back.”

Pakistan’s tech startup sector is booming: in 2021, Pakistani startups raised $365.87 million in venture capital funding, more than in the previous five years combined. The sector had received seven times as much funding by the end of the first quarter of 2022 as it had in the first quarter of 2021.

The world’s fifth-most populated country has also piqued the interest of some of the world’s most well-known venture capital firms: Tiger Global made its first investment in Pakistan in December and has since funded at least two more startups.

But, according to Lakhani, these overseas investors are still “dipping their toes” in Pakistan, rather than perceiving it as a “strategic” investment destination. In reality, she is concerned about the influx of wealth.

 “There’s a lot of noise, and the valuations [that startups receive] aren’t always accurate.” What would have made me giggle a year ago is now the norm. When did we become so accustomed to such valuations?” I kept wondering.

Lakhani spoke with Rest of World via Zoom from Washington, D.C., about the reasons for the current uptick, the changes it has prompted on the ground, and why she is wary of the future.