IFC is building a dedicated fund for Pakistani startups, it tells finance minister
Work on an entrepreneurs' fund is progressing, the World Bank Group lender told Muhammad Aurangzeb in Islamabad. It has given no size, structure or launch date.
The International Finance Corporation is working on a dedicated fund for Pakistani entrepreneurs and startups, its officials told Finance Minister Muhammad Aurangzeb at a meeting in Islamabad on 6 October.
IFC briefed the minister on progress toward an entrepreneurs' fund meant to strengthen the startup ecosystem, according to the finance ministry, and is building it with relevant stakeholders. Simon Andrews, its director for Pakistan, Afghanistan, the Kyrgyz Republic, Tajikistan and Turkmenistan, and Naz Khan, its principal country officer for Pakistan, represented the lender. No size, structure or launch date has been announced.
Thin early stage money
Early stage money is the thinnest layer of Pakistan's startup market. A report by i2i Ventures published on 6 October counted $74.7 million raised across five deals in the third quarter, but one deal, Fasset's round, made up about 91 percent of it. Without Fasset, startups raised roughly $6.7 million in the quarter. A fund that writes cheques at the seed and pre Series A stage would address that gap.
IFC's existing startup investments in the country include i2i Ventures and Sarmayacar, which suggests the new vehicle could follow the same route of backing fund managers rather than individual companies. That is an inference: neither IFC nor the ministry has said how the fund would invest.
The wider agenda
The startup fund was one item among several. The two sides also discussed developer finance models for affordable housing, IFC's AgriConnect initiative, which aims to draw private money into agriculture through better storage and electronic warehouse receipts that lenders can accept as collateral, and public private partnerships in water and power. On the power side, the talk covered advanced metering across distribution companies.
Aurangzeb named entrepreneurship, small and medium enterprise finance, agricultural finance, affordable housing and public private partnerships as the areas where private capital should be mobilised. He said domestic resources should be complemented by international development finance, and stressed the need for affordable, longer term financing for small businesses, entrepreneurs, agriculture and housing, according to the ministry's statement.
