GCC expansion funding is now at the centre of how Pakistani startups plan and pitch to investors, according to findings shared at the closing ceremony of invest2innovate’s (i2i) two-year project, Ecosystem Signals 2026. The event, supported by Visa Foundation, brought together founders, investors, and ecosystem leaders to discuss where capital is going next in Pakistan.
The numbers behind the conversation are striking. Hybrid financing (equity plus debt) rose from just $1 million in 2024 to $66 million in 2025, accounting for 89% of total funds raised, which came to $74.2 million in 2025. That is a structural change, not just a one-year blip.
Pakistan startup funding nearly doubled in 2025
While current funding levels remain well below the $350 million-plus peaks of 2021 and 2022, the 2025 figures signal a meaningful recovery and a shift toward more diversified financing structures. Total reported funding came to roughly $74.2 million in 2025, almost double the funds raised in 2024.
This increase came in line with fundraising through hybrid financing models, replacing the previous equity-only funding approach. The change helped startups in sectors including logistics, healthtech, transportation, entertainment, and wedding tech, with additional undisclosed deals in sports tech and SaaS or cloud computing.
i2i CEO Sarah Munir said that for 2026 and onwards, as macroeconomic conditions improve and investor confidence slowly returns, funding is expected to remain selective and efficiency-driven, with greater emphasis on hybrid financing structures, revenue-backed growth models, and capital-efficient startups. She added that the ecosystem is entering a phase where more disciplined capital deployment and diversified funding pathways could create a healthier, more sustainable investment environment.
DFIs and bilateral lenders enter the picture
One of the biggest signals from Ecosystem Signals 2026 was about who is coming into the market next. At a panel discussion on ‘Where Capital Goes Next in 2026’ at the ceremony, i2i Ventures co-founder Misbah Naqvi said that bilateral and multilateral creditors and development finance institutions (DFIs) were interested in supporting the development of the startup ecosystem in Pakistan.
This matters a great deal. DFIs, such as the International Finance Corporation (IFC), tend to bring patient, long-term money. When they move into a market alongside commercial banks and venture capital, it signals that the ecosystem is being taken seriously at a policy and institutional level, not just by risk-seeking private investors.
It also opens up new funding routes for founders who cannot or do not want to give away equity at early stages. Debt-linked instruments from DFIs often come with lower costs and longer repayment windows than commercial loans, giving startups more room to grow before a big equity round.
GCC expansion is now part of the fundraising story
Pakistani founders are not just looking for capital at home. GCC expansion funding has become a key part of how startups position themselves to investors. The Gulf Cooperation Council, which includes the UAE, Saudi Arabia, Qatar, Kuwait, Bahrain, and Oman, is one of the fastest-growing tech and startup markets in the world.
Finance Minister Muhammad Aurangzeb confirmed in December 2025 that remittance inflows reached $38 billion in FY2025, with projections of $42 billion for the current year, and more than half of that originates from GCC states. That deep economic tie between Pakistan and the Gulf is now shaping startup strategy too.
Real deals show this trend is already happening. Haball, a Pakistani fintech startup transforming B2B financial operations through digitized payments and Shariah-compliant financing, raised a $52 million Pre-Series A round led by Zayn VC and backed by Meezan Bank, scaling its platform to handle over $3 billion in payments. The startup is now eyeing expansion into the GCC.
Myco completed a $6 million Series A round in 2025 with Rasmal Ventures from Qatar and Joa Capital from Saudi Arabia as lead investors. These investments are expected to enable the startup to scale across the GCC.
MedIQ, through its integration of AI in both clinical and operational processes, has already established itself in the Middle East, including its 2023 entry into Saudi Arabia.
On the government side, BridgeStart Pakistan, announced a strategic partnership with Startupbootcamp to open new pathways for local businesses into the GCC innovation ecosystem. As a result, high-potential Pakistani startups will gain exclusive access to international accelerators.
What changed and what still needs fixing
E-commerce funding collapsed in 2025, falling from the largest funded sector in 2024 at 55.2% of capital to a negligible share. This shows that investors are now far more selective. They want real business models, not just user growth stories.
Female-founded startups secured 31% of deals in 2025, up from 13% in 2024, signalling improved access, though their share of capital slipped to 14% from 16%, underscoring a persistent scale gap. More women are getting deals, but the amounts remain smaller. That gap still needs to close.
Capital is more selective than in the 2021 boom period. Investors want stronger unit logic, cleaner payment rails, tighter governance, and more realistic expansion plans. For founders, this means the era of raising on a big pitch deck alone is over. Numbers, discipline, and a clear path to regional scale now matter more.
The GCC expansion funding trend is not a shortcut. It requires founders to understand Gulf markets, local regulations, and what investors in Dubai or Riyadh are actually looking for. But for Pakistani startups that do the work, the opportunity is real and growing.
Frequently Asked Questions
What is invest2innovate’s Ecosystem Signals 2026?
Ecosystem Signals 2026 was a two-year project run by invest2innovate (i2i), supported by Visa Foundation. It tracked Pakistan’s startup funding trends and ended with a ceremony where ecosystem leaders discussed capital flows, financing structures, and the role of DFIs and bilateral lenders in Pakistan’s startup market.
What is hybrid financing and why does it matter for Pakistan startups?
Hybrid financing combines equity (shares in the company) with debt (a loan that must be repaid). It included bank-linked debt financing, and that is a structural signal. When a startup market starts opening non-equity funding routes, it gets more mature. It also means founders do not have to give away as much of their company early on.
Why are Pakistani startups targeting GCC expansion in their fundraising?
The GCC is a large, high-income market with growing digital adoption and strong ties to Pakistan through remittances and the diaspora. Compared to mature markets like the US and EU, the GCC offers unique opportunities driven by its distinct macroeconomic factors, trade dynamics, and extensive sovereign funding. Regional governments are pushing for diversification away from oil-dependent industries, creating a surge in startup activity backed by sovereign wealth funds, corporate investors, and strategic partnerships. Pakistani founders who can show a GCC entry plan are finding it easier to attract both local and regional investors.
What sectors are attracting the most startup investment in Pakistan right now?
The strongest signals still come from fintech, B2B payments, commerce infrastructure, logistics, and practical software. E-commerce has lost its earlier dominance, and investors are now focused on startups with clear revenue models and the ability to scale regionally, including into the GCC.
