The Pioneering Women Shaping Pakistan's Startup Ecosystem

By Payam Akram and Sunita Rappai 

When Oraan, a female-founded startup aiming to provide Pakistani women with simple, inclusive, and accessible financial services, first looked for funding to kickstart its launch, the journey was not easy.

Halima Iqbal, Oraan’s CEO, says she was often met with “biases and skepticism from potential investors and stakeholders who doubted our ability to scale and sustain business.”

In 2021, she came across i2i Ventures, Pakistan’s first female-led venture capital fund, set up in 2019 by venture capital veterans, Kalsoom Lakhani and Misbah Naqvi. Impressed by Oraan’s concept and business plan, i2i provided crucial early-stage financing for the startup alongside other investors, helping it reach over 2 million Pakistani women to date with secure, user-friendly financial products and services.

The fund’s support goes beyond finance, says Iqbal. “They act as partners, not just investors, working closely with founders to ensure success. Their focus on gender diversity and inclusion, and targeted support for women-led businesses, is what makes them truly unique.”

i2i Venture’s extensive support for startups is why IFC recently announced a $3 million investment in the fund under its  Startup Catalyst Program, which invests in incubators, accelerators, and seed funds supporting innovative early-stage startups in underserved markets. 

The financing comprises up to $2 million from IFC’s own account and up to $1 million from the Women Entrepreneurs Finance Initiative (We-Fi), which supports women-owned and led firms and builds the capacity of women entrepreneurs to run high-growth businesses.   

The aim? To ensure startups like Oraan can continue to access the crucial funding and support they need to grow and scale, as Zeeshan Sheikh, IFC’s Country Manager for Pakistan and Afghanistan, says. 

“There is tremendous potential in Pakistan for startups to develop and scale up new technologies and tech-enabled business models that address issues such as climate change or help increase access to quality education, healthcare, and financial services, among others,” he points out.

“But early-stage entrepreneurs, and particularly women, face significant challenges in accessing the resources they need to launch and grow their businesses. Tackling this is critical to build ecosystems that boost innovation and entrepreneurship.”

Fostering an inclusive ecosystem

While Pakistan has many of the key elements for a thriving startup ecosystem—including a young population, growing tech adoption, and increasing entrepreneurial support—regional and global challenges like political instability and economic volatility have hindered access to crucial funding.

Venture capital funds like i2i Ventures are vital to help close this financing gap. The fund's aim is simple: to back bold founders solving some of Pakistan’s biggest problems by investing in pre-seed and seed-stage startups and providing them with hands-on support.

Prior to founding i2i Ventures, both Lakhani and Naqvi worked with startups in Pakistan for over a decade. In 2011, Lakhani founded sister company Invest2Innovate, a pioneer in the country’s startup ecosystem. It provides business support to entrepreneurs and connects them to investors, while also offering market insights and research. Their experiences have given both unique insights into the needs and challenges of the country’s startups.

“We saw firsthand both how hard it was to build businesses in Pakistan, and how resilient Pakistani founders were as a result,” says Naqvi.  “i2i Ventures was born from that experience—of seeing up close the potential of startups in the market, and the need for founder-centric investors who understood business and market challenges and could support their growth at the early stage.”

As well as drawing on training, mentoring services, and research from Invest2Innovate to expand their support to their portfolio companies, i2i Ventures strives for gender parity. This includes encouraging their companies to hire more women into senior management roles and create more gender-inclusive workplaces.  A third of i2i Venture’s portfolio is also made up of women-led startups.

This is essential in a country where almost $60.5 million was raised for 29 deals with male-founded startups last year, compared to just $10.5 million for five deals with female-founded startups, according to Invest2Innovate’s 2023 annual report. As Lakhani describes it, women-led startups are often considered “investment worthy but not investment ready.”

But it’s not just women founders who benefit. Ali Moeen Malik, co-founder of ezBike, credits much of his success to the support provided by i2i Ventures. His company is building the ecosystem for electric Pakistan, which is much needed given rising fuel costs and the overarching climate crisis.

“From connecting us with potential funders to refining our business strategy, i2i Ventures has been instrumental at every stage,” he says. “They’ve provided not only financial backing but also strategic guidance, helping us to navigate numerous challenges and boost our growth and development.” 

Other companies in i2i Venture’s portfolio include Abhi, a fintech salary advance platform aiming to empower both businesses and employees by changing how company payrolls are managed; and Truck It In, which is working to improve efficiency in the country’s very fragmented trucking and logistics industry. 

The importance of early-stage capital and expertise

For IFC, supporting these innovative startups and bolstering the nascent ecosystems that are essential for their growth and survival is vital to drive sustainable and inclusive growth in emerging markets.  

It is also part of the institution’s “counter-cyclical” role. Within the backdrop of reduced venture capital funding globally, IFC is helping to fill the gap by investing in strong local VC managers like i2i Ventures who can build a pipeline of future direct and joint investments.

To date, IFC’s Startup Catalyst Program, launched in 2016, has supported 22 accelerators and seed funds that have invested in over 1,180 startups in 24 emerging markets.

IFC is also an implementing partner for the Women Entrepreneurs Finance Initiative (We-Fi) and has worked closely with them to implement ScaleX, a program that works with venture capital investors, accelerators, and entrepreneurs worldwide to level the playing field for startups owned or led by women. ScaleX also previously supported i2i Ventures in creating a more holistic gender lens framework in its investing and investment management.

As Hanh Nam Nguyen, IFC's We-Fi Program Manager, says, "We-Fi is committed to supporting women entrepreneurs through funds such as i2i Ventures, which not only enable more private sector financing for women startups but are also working to make the ecosystem more supportive for women founders.” 

These initiatives also reflect the World Bank Group’s new gender strategy for 2024-2030, with its bold ambition to accelerate gender equality to end poverty on a livable planet, through concerted action, financing, and programs.

“By providing startups with access to early-stage capital and expertise, we can foster an inclusive startup ecosystem that drives entrepreneurship, boosts gender and inclusion, supports innovation, and creates jobs,” says Farid Fezoua, Global Director for Disruptive Technologies, Services, and Funds at IFC. “We’ve seen the difference this has made to lives around the world—and the positive signal it sends to the wider investment community.”

Lakhani and Naqvi agree—and they’re excited about what the future holds.