Salman Sufi, who is in charge of the Strategic Reforms Unit for the Prime Minister of Pakistan, has said that the government may look into regulating the startup ecosystem. Sufi said in a tweet that businesses that only depend on getting money and then fail because they don’t have a strong corporate structure should be discouraged.
“We can’t let a few people ruin the market for the whole industry,” the PM’s assistant said. A number of users were quick to point out why it might be hard to regulate startup funding. The co-founder of TazahTechnologies, Abrar Ul Haq, wrote:
@SalmanSufi7, this is an area which you don’t have much expertise in.
Therefore, best to stay away from commenting on it, as it gives a bad impression of @pmln_org & political parties in general. #GOP & bureaucracy bankrupted #PIA. Must not be allowed to disrupt startup funding. https://t.co/V6btngveO9
— Fahd Sheikh (@FahdSheikh3) September 19, 2022
Ammar Khan, a well-known macroeconomist, also had doubts about Sufi’s idea.
Fahd Sheikh, an investment banker, also didn’t like the idea of the government getting involved in the startup ecosystem. He said, “Sufi’s idea didn’t get much traction, and many other users asked him why he would suggest something that could hurt the startup industry in Pakistan.”
It’s important to note that Pakistani startups have gotten a lot of money in the past few years. In 2018, less than $10 million was put into local start-ups. In 2019, that number jumped to about $50 million. In 2020, there was more growth, and startups were able to get investments of more than $65 million.
But the industry really took off in 2021, when Pakistani startups raised $350 million in 81 separate deals. This year, local startups have raised $322 million through September, so the trend is still going strong.
The fact that investments are going up at an exponential rate suggests that investors are getting more and more confident in the Pakistani startup ecosystem.