Daily Times

CDC Group (CDC), the UK’s development finance institution and impact investor, has made an anchor investment in Techxila Fund I, a fund managed by local venture capital (VC) firm Fatima Gobi Ventures (FGV). CDC’s commitment will help to boost Techxila Fund I’s investments in Pakistan-focused early stage startups, helping to drive transformational impact and spurring economic and social development in the country.

Increasing interest from international investors such as global VC firms, bodes well for Pakistani startups. In the first half of 2021 alone, Pakistani startups raised more funding from VCs than the previous five years combined. Despite a global pandemic, foreign funds accounted for over 70 per cent of Pakistan’s total VC funding in 2020 and 2021. This rise in VC funding has helped fuel the country’s economic growth – the country has seen an increase in its middle-class over the last two decades, with estimated 84 million Pakistanis (42 per cent of the population) considered middle-class in 2017. In the first half of the year, 101 million broadband users and 98 million 3G/4G subscribers were recorded in the country – indicating the significant market penetration and showing there is still much room for growth. CDC’s funds injection into Techxila will enable FGV to expand its investment portfolio across a myriad of verticals including FinTech, Logistics, EdTech, and HealthTech sectors. Such tech-enabled business models can contribute to job creation at scale and enhance consumer access to essential goods and services. By partnering with local VC firms such as FGV, CDC aims to catalyse domestic VC markets and channel funding to early-stage entrepreneurs. Additionally, the partnership will support FGV in putting Environmental, Social and Governance (ESG) practices at the forefront of its investments and this alignment is expected to have a positive demonstration effect for other investors in the market.