The year 2025 wasn’t a comeback year for Pakistani startups, but it stopped the freefall. Funding increased from 2024’s lows, a small betterment for an ecosystem recalibrating expectations. Data Darbar reports local startups raised roughly $36.6 million in equity across 10 rounds, with four transactions not disclosing amounts.
That’s a modest increase from $22.5 million in 2024, despite a slight dip in deal flow to 14 from 15.Some see progress, a bounce back from the lowest point.Others point out the numbers remain well below 2021 and 2022 highs, and even pre-COVID levels. Both views are valid.
Critically, the small base means any single round can considerably impact overall activity. The average disclosed equity deal size was around $3.7 million, up from last year. Though, this likely underestimates actual activity, as four deals didn’t disclose amounts, especially at seed and angel stages.
Female-led startups raised $8.8 million in disclosed equity funding, about a quarter of the total, despite a larger share of deals. This is a notable improvement over 2024, though, like other numbers, the low base amplifies even small changes.
as the global venture capital world inches upward in dollar value, the race is not notably suitable for a developing country, given the lack of compute and scale
Fintech again led in both volume and capital. Haball’s Pre-Series A funding, backed by Zayn VC and Meezan Bank, and metric’s $1.3 million seed round were key. Consumer-facing fintech was selective, with Qist Bazaar raising $196,000 in debt as part of its Series A from Bank Alfalah.Other angel and early-stage rounds added to the volume, but didn’t dramatically change the overall figures.
Healthtech was the second most active sector. MediQ’s $6 million Series A, led by Rasmal Ventures and Joa Capital, and Xylexa’s $1 million seed round were major raises. Accelerator-backed startups like BeMe showed continued investor interest in digital health.
More captivating developments occurred outside of equity. Debt financing rose in popularity, and bank-fintech partnerships grew, with banks providing capital for loan books and fintechs leveraging their distribution.Haball’s $47 million debt raise from Meezan Bank was the largest single deployment of capital this year, potentially exceeding all other equity raises combined.
consolidation also continued, with Bazaar Technologies acquiring Keenu, a leader in point-of-sale payments. These transactions, while not reflected in traditional equity metrics, suggest a shift toward balance-sheet-led growth and platform integration.
Globally, venture capital increased 30.8 percent to $512.6 billion in 2025, nearing 2022 levels but still 32 percent below 2021’s peak. However, this headline number hides complexities. It’s a story of two halves: artificial intelligence (AI) surged, with investment up 80 percent to $270.2 billion, reaching an all-time high and growing at a 10-year compound annual growth rate of 33 percent.
Meanwhile, all other sectors combined raised $242.4 billion – less than AI – essentially flat year-over-year. Over the past decade, these sectors have barely grown at a 3.5 percent compound annual growth rate, with 2025’s total lower than in 2018.
Deal volume also declined, falling to 37,745 in 2025, down 11.5 percent.Yet, AI’s share climbed to a record 31.4 percent. Venture capital activity is now more concentrated than ever.
This concentration is evident geographically, with North America accounting for over 79 percent of global AI funding, almost 20 percentage points higher than the 10-year average. The rest of the world, including Asia and Europe, managed just over a fifth. Within the US,a few companies – OpenAI,Anthropic,and xAI – are driving much of the growth.
This mirrors public markets, where the “Majestic 7” stocks contributed 40 percent of incremental market capitalization between 2014 and 2024.
For Pakistan, these global trends offer few lessons. The concentration in AI funding reflects capital chasing winners in categories requiring high burn rates and R&D. That race isn’t suited for a developing country lacking computing power and scale. Pakistan may remain a net buyer.
Mutaher Khan is co-founder of Data Darbar and works for the Karachi School of Business and Leadership, and Natasha Uderani is co-founder of Data Darbar.
Published in Dawn, The Business and Finance Weekly, January 12th, 2026
