World Bank prepares a $50 million fund of funds to deepen Pakistan's venture capital market
Ignite would run the new fund, which would invest in professionally managed venture funds rather than in startups directly. Board approval is pencilled in for March 2027.
The World Bank is preparing a $50 million loan to help the Pakistani government set up a fund of funds for venture capital, according to project documents it disclosed on 19 October. The fund would put public money into privately managed venture funds, which in turn would back early stage and growth companies.
The operation is called the Pakistan Entrepreneurship and Private Investment Catalyst Project, with the acronym EPIC. The financing comes from the Bank's IBRD window. The borrower is the Ministry of Information Technology and Telecom, and Ignite, the ministry's not for profit technology fund, would implement it.
The gap it targets
The Bank's project information document says venture capital investment per capita in Pakistan is less than one tenth of the level in Egypt, Indonesia and Vietnam. It describes the problem as a shortage of professionally managed, patient equity capital, not a shortage of entrepreneurial talent.
The stated objective is to mobilise private investment and expand access to risk capital for innovative and high growth firms. The document points to Jordan's Innovative Startups and SMEs Fund as evidence that public money works best as anchor capital placed through professional funds, not as direct stakes in companies.
How the fund would work
The project has two components. The first capitalises and invests the Pakistan Fund of Funds. The second pays for the arrangements to establish, run and oversee it. A separate licensed management company would be established or competitively selected to make the investments on a commercial basis, according to the Bank's environmental and social review summary.
The same review expects past patterns to carry over. Startup investment in Pakistan has concentrated in fintech and ecommerce, followed by health, education and logistics technology. The Bank flags consumer protection, data privacy and conditions for gig workers as risks, and notes that Ignite has no environmental and social management system at the fund level yet. Women remain underrepresented among founders and venture capital recipients, it adds. The scope is national, with no fixed geographic footprint at this concept stage. The Bank's task team leader is Fahad Hasan, a financial sector specialist.
The documents give no loan terms. They give an estimated review date of 20 January 2027 and an estimated Board date of 24 March 2027. These are the first public documents for the project, so the portfolio, the fund's investment rules and the choice of manager are still to be decided.
