Pakistan’s investment landscape maintained a steady recovery trajectory in 1H2025. This was supported by improving macroeconomic fundamentals and rising investor confidence, despite persistent geopolitical risks that continued to shape a conservative investor outlook.
Macroeconomic Stability Driving Investor Confidence
Improving macro fundamentals, including easing inflation, fiscal consolidation, and a stronger external account, contributed to a more favorable investment backdrop and lifted investor sentiment in 1H2025. Business sentiment rose to +11% and foreign investor sentiment up to +17%, according to the OICCI. This lays the groundwork for stronger capital flows ahead, supported by a continued rebound in consumer confidence index, which rose 9.2% QoQ and 24.6% YoY.
Venture Capital Snapshot
Venture capital activity in 1H2025 reflected notable progress, with five transactions raising $58.2 million cumulatively, compared to $43 million total funding raised last year. There were five deals across fintech, healthtech, sports tech, e-commerce, and mobility sectors with an average deal size of $11.6 million, as compared to $1 million SPLY. The 1H2025 performance marks the highest first-half funding since 2023.
Venture Capital Funding Snapshot – 1H
A standout transaction was Haball, which raised $52 million, underscoring growing investor appetite for high-valued ventures. Late-stage investments remained dominant, accounting for 60% of total deal volume in 2025, consistent with trends in 2024.
Top Deals 1H25
Startup Funing – QoQ
Strategic partnerships emerged as a key growth lever for startups, driven by embedded finance platform NEEM’s collaboration with EFU Life and Leopards Courier Services, further deepening sector footprints through tailored financial solutions. Fintech, e-commerce, and healthtech sectors retained their positions as key investment verticals.
In addition, debt financing constitutes 81% of the total funds raised in the first half of 2025, presenting an opportunity for equity investors to step in with value-added capital, particularly as companies seek strategic partners, to support their next phase of growth.
Sector Wise Funding
Stage Wise Deals
IPO Momentum amid Global Slowdown
Pakistan’s equity market emerged as the top-performing asset class in FY2025, delivering an exceptional 58% return, a clear indicator of investor optimism anchored in sustained macroeconomic stability.
In contrast to global trends, where IPO activity fell to a nine-year low, Pakistan’s IPO market demonstrated resilience in 1H2025, with two successful listings raising $8.1 million, accounting for 35% of the total capital raised in 2024. Both offerings were notably oversubscribed, with BF Agro attracting demand 16 times its offer size, highlighting strong demand for quality listings and public markets as a viable funding route for well-positioned companies.
Half – Year IPO Funing Snapshot
M&A Activity Reflects Strategic Realignment
M&A activity during 1H2025 continued at a measured pace, Noteworthy among these was the acquisition of FINCA Microfinance Bank by ABHI and TPL Corp, followed by the launch of ABHI Microfinance Bank with a capital infusion of PKR 2.6 billion. The transaction underscores investor commitment to Pakistan’s expanding fintech ecosystem and the drive toward broader financial inclusion.
Investor appetite from large domestic groups also gained traction. High-profile targets currently up for acquisition include Barrett Hodgson, Rafhan Maize, and Attock Cement, while successful transactions such as CCL Holding’s acquisition of Mitchell’s Fruit Farms and ongoing bids for PIA by groups like Lucky Cement and Arif Habib highlight increasing deal flow and opportunities for strategic investors.
In addition, Pakistan’s mineral sector is attracting renewed investor interest, driven by the country’s vast untapped reserves of gold, copper, coal and other critical minerals vital for renewable energy. The sector has attracted attention from key international players, including Saudi Arabia’s Manara Minerals, alongside interest from the U.S., China, and Denmark. In a strategic move to unlock the sector’s potential, government established the Pakistan Mineral Investment Forum in April 2025, aimed at accelerating foreign capital inflows alongside advancing the National Minerals Harmonisation Framework 2025, an effort aimed at streamlining policies.
Emerging Trends in Pakistan
The technology sector is proving to be a dynamic and attractive sector for investors, with IT exports reaching $3.5 billion during 11MFY25, reflecting a robust 19% year-on-year growth. The momentum highlights the sector’s expanding role as a key driver of innovation and value creation in the economy.
Pakistan’s technology ecosystem with recent initiatives laying important groundwork for future growth. The establishment of the Pakistan Crypto Council, allocation of 2000 MW for crypto mining, and plans to form a technical committee for drafting a comprehensive virtual asset regulatory framework signal the government’s initial steps toward formalizing digital asset regulation. In parallel, the launch of Data Vault Pakistan’s AI-focused data center in Karachi stands out as one of the few dedicated infrastructure projects aimed at supporting artificial intelligence innovation within the country. Collectively, these efforts are helping to establish a foundational ecosystem that can attract meaningful investment in the years ahead.
Initiatives to Strengthen Investment Funding Ecosystem
Pakistan continues to strengthen its venture capital ecosystem through targeted initiatives. The Pakistan Startup Fund enhances private VC rounds through government co-investment, while BridgeStart offers startups critical international exposure. Karachi’s National Incubation Center (NIC) has introduced milestone-based grants via a new accelerator in partnership with Orbit Startups. Meanwhile, Dubai-based Yango Ventures’ $20 million fund for early-stage startups across Pakistan and emerging markets, coupled with partnerships with global technology leaders like Google Cloud, further solidify the ecosystem’s foundation. These efforts collectively aim to broaden access to funding and scale Pakistan’s startup landscape.
Outlook: Navigating Forward with Hope
Looking ahead, while geopolitical uncertainties continue to shape a cautious investor sentiment globally, Pakistan’s investment outlook remains hopeful, supported by a stable macroeconomic foundation, improving investor confidence, and targeted policy initiatives aimed at fostering entrepreneurship and innovation.
The accelerating development of Pakistan’s tech ecosystem, evident through initiatives in AI infrastructure, digital asset regulation, and increased IT export performance, offers new avenues for scalable, future-facing investments.
Continued progress on structural reforms, enhancements in the ease of doing business, and sustained support for venture and growth-stage capital will be pivotal in unlocking further investment inflows and driving long-term economic resilience.