Startup funding shrinks 40pc to $104m.

KARACHI -- Startups in Pakistan raised a total of $103.8 million in 22 deals in the April-June quarter, down almost 40 per cent from the preceding quarter when the flows amounted to $173m.

Data compiled by Data Darbar, a website that tracks investment flows into the country's tech ecosystem, shows the average ticket size remained $4.9m in April-June, down 54.3pc from $10.8m in January-March. (The average ticket size takes into account the undisclosed funding as well.)

'The dip is reflective of the global slowdown in startup funding,' Data Darbar co-founder Mutaher Khan told Dawn in an interview.

Pakistan's startup ecosystem has been in financial turmoil as major players like Careem, Swvl, Truck It In and VavaCars have laid off employees, rolled back services and even suspended operations altogether.

'Globally, investors are shying away from late-stage funding. That's why you see the average ticket size shrinking by half in the latest quarter,' said Mr Khan.

The top five rounds in April-June were conducted by ecommerce startup Dastgyr ($37m), fintech Abhi Finance ($17m), healthtech Medznmore ($11.5m), fintech Sadapay ($10.7m) and transportation startup Bykea ($10m).

Deals are often announced with a lag. That's the reason Mr Khan expects the deal flow - or the number of transactions - will also go down over the next quarters in line with the reduction in the average ticket size.

Venture capitalists-backed startups are struggling to find new funding for rapid customer acquisition. VCs aren't willing to write blank cheques anymore to help startups acquire new customers at a heavy price. Investors are asking entrepreneurs to hit early breakevens instead of focusing solely on revenue mobilisation.

'No big rounds have taken place since...