I was 16 or 17 when I first started hearing about startups. It was early 2019, and at the time, everything around them felt exciting, fast, and full of possibility.
The real boom came in the early 2020s. Every few weeks, there was another funding announcement, another founder profile, another LinkedIn post about “building for scale,” “disrupting legacy systems,” or “reimagining the future.” Startups were no longer just businesses. They became symbols. They were sold as proof that Pakistan had finally entered some new era of innovation, modernity, and global relevance. If a company raised money, it was treated like success. If it grew fast, it was seen as visionary. If it burned cash while calling it expansion, that too was somehow part of the plan.
But as the years passed, it started to feel like something else, less like pure business-building and more like a performance. Growth was always the headline, but often it seemed like performance had an even bigger role in keeping the whole thing alive.
For a while, a lot of people bought into it. I did too. One of the main reasons I built this site was to cover that ecosystem. Part of it was genuine curiosity. Part of it was personal ambition. I thought it might help me find my way into venture capital, which I eventually did and found far less interesting than it looked from the outside, and maybe even help me later when I built a company of my own which I am doing right now.
Investors wanted the next breakout company. Media wanted the next big story. Founders wanted momentum. Everyone wanted to believe Pakistan had found its own version of the global startup dream, where capital would keep flowing, valuations would keep rising, and the only thing that mattered was growth. Profitability could come later. Sustainability could come later. Hard questions could come later. The future was the product being sold, and for some time, the market was happy to keep buying.
Now that mood is dead. As Farooq Tirmizi, founder of Elphinstone, put it, Pakistan’s startup ecosystem may be facing a “very long winter,” not just a short downturn.
Funding has fallen off a cliff. Layoffs have become common. Some companies have downsized, others have quietly faded, and a few have collapsed in full public view. The ecosystem that once sounded loud, ambitious, and almost self-congratulatory now feels defensive, cautious, and far less certain of itself. The glamour has thinned out. The language has changed. Suddenly, the conversation is not about blitzscaling or disruption. It is about runway, survival, restructuring, and whether the business was ever real enough to last in the first place.
That shift forces an uncomfortable question. Was Pakistan’s startup boom actually about building strong businesses, or was a big part of it just theatre built on cheap money, weak fundamentals, and borrowed hype?
The answer is somewhere in the middle, but not comfortably so.
The boom itself was real. Pakistan did attract serious capital. According to reporting on MAGNiTT data, startups in Pakistan raised $365.8 million in 2021, followed by $332.4 million in 2022. Then the fall came hard. In 2023, funding dropped to $75.6 million, a 77.2% decline year-on-year. By the first half of 2024, startups had reportedly raised only $3 million, down another 92% compared to the same period a year earlier. That bleak picture matches what ecosystem insiders have been saying. William Chu of SparkLabs Fintech has argued that startup funding is still “very much at a standstill,” despite occasional signs of recovery.
Those numbers matter because they expose how much of the ecosystem’s confidence was tied to the continued presence of capital. When money was abundant, it covered flaws. It allowed weak models to stay alive longer than they should have. It allowed founders to prioritize story over structure. It allowed investors to pretend that scale would solve everything. Once that money dried up, reality became much harder to avoid.
And reality, frankly, was not flattering.
A lot of startups in Pakistan were built in a way that looked impressive from the outside but fragile from within. They hired fast, expanded fast, marketed aggressively, and treated rapid growth almost like a moral virtue. Bigger teams meant momentum. New cities meant traction. Discounts meant adoption. Losses were brushed aside as temporary because the assumption was that market share came first and discipline could be figured out later. In theory, the next round of funding would help bridge the gap. In practice, that meant many companies were not building to endure. They were building to raise again.
That distinction matters more than people admitted at the time.
A business built to survive behaves differently from a business built to impress investors. One watches margins. One obsesses over whether customers will still pay when the subsidies disappear. One expands carefully. The other can get addicted to appearance. It starts managing perception as much as performance. In that environment, fundraising becomes more than a tool. It becomes the whole scoreboard.
Even the Pakistan Institute of Development Economics has argued that some investors entered the market with weak due diligence and backed startups with unsustainable models, especially in categories where customer acquisition costs often made little long-term sense. That is where startup theatre begins.
Startup theatre is not just about lying. It is more subtle than that. It is about creating the impression of strength before strength actually exists. It is about making burn look like ambition, making noise look like momentum, and making visibility look like validation. It is about learning the language of scale before proving the logic of the business. It is about acting like you are building the future when you have not yet shown that you can survive the present.
Pakistan’s ecosystem became especially vulnerable to this because it adopted many of the aesthetics of global startup culture without always having the conditions to support them. In bigger markets, the tolerance for loss-making growth is already risky enough. In Pakistan, that model was even shakier. Consumer purchasing power is lower. Inflation is harsher. Currency depreciation hurts. Logistics are messy. Regulation can shift without warning. Talent is available, but scaling infrastructure is not easy. This is not a market where you can casually burn cash forever and assume the problem will fix itself at scale.
Yet for some years, a lot of companies behaved as if it was.
Airlift became the clearest example of how quickly this model could rise and then unravel. It was once one of the most celebrated startups in the country, raising $85 million in 2021, at the time the largest funding round by a Pakistani startup. Then in 2022, it shut down after failing to secure fresh capital amid the global downturn. Reuters reported that Airlift’s collapse came as rising rates and worsening market sentiment made fundraising far harder. Dawn also noted the scale of its rise before its shutdown and layoffs.
Airlift mattered beyond its own business. It became symbolic. It showed just how quickly a startup can be turned into a national success story and how quickly that story can fall apart once the capital engine behind it stalls. The issue was not just that one company failed. Startups fail all the time, everywhere. The deeper issue was what that failure revealed about the ecosystem around it. If one of the biggest and most visible startups in the country could fall that fast, then maybe the broader structure was not as strong as it had looked.
And it wasn’t.
By early 2024, Profit reported that Cheetay was considering a shutdown, Dastgyr had cut around 50% to 60% of its workforce, and YAP had dramatically reduced its Pakistan team. Those developments were tied to a capital crunch, rising costs, and weak fundamentals. The pattern was hard to ignore. This was no longer about one overhyped company. It was an ecosystem-wide correction.
Still, blaming everything on the global environment would be dishonest. That said, the external environment did matter. Mudassir Sheikha, Careem’s co-founder and CEO, pointed to Pakistan’s “challenging macroeconomic reality” and global capital pressures when explaining why the economics had become harder to justify. Global conditions absolutely changed. Higher interest rates reduced investor appetite for risk, and safer assets suddenly looked far more attractive than speculative startup bets. That much is true. But easy money going away did not create bad economics. It simply stopped hiding them.
That is the key point. The downturn did not kill strong businesses. It exposed weak ones.
Pakistan’s startup ecosystem also suffered from a strange cultural distortion. Fundraising itself began to look like achievement. A startup that raised capital was not seen as a company with more responsibility and pressure. It was treated like proof of excellence. Founders were celebrated for rounds rather than results. Media coverage often amplified funding announcements with more excitement than scrutiny. Valuation became shorthand for importance. Being venture-backed became a kind of social credibility marker.
That kind of ecosystem teaches bad habits. If attention goes to whoever raises the most, then naturally more companies will optimize for what gets attention. More founders will become storytellers before they become operators. More investors will chase heat instead of discipline. More media coverage will focus on hype cycles instead of business durability. The whole system starts rewarding the performance of success rather than success itself.
It also encouraged imitation. A lot of Pakistani startups were built around versions of models already seen in other markets: quick commerce, delivery, fintech, B2B marketplaces, logistics platforms, and so on. That is not a problem by itself. Adaptation is normal. The problem comes when imported models are treated as inherently valid just because they worked somewhere else or attracted money somewhere else. Pakistan is not India, not the Gulf, not Southeast Asia, and definitely not Silicon Valley. Founders cannot just copy a structure, localize the branding, and assume the economics will eventually behave.
Many didn’t seem to fully absorb that. Or maybe they did, but the incentive structure pushed them in the other direction. When capital is available, optimism gets rewarded. Restraint looks unsexy. Slow growth looks weak. Profitability looks small-minded. In that climate, discipline can actually make a founder look less ambitious than someone losing money dramatically with a better story.
That is absurd, but ecosystems are often absurd until reality humiliates them.
To be fair, not everything from this period was empty. That is where lazy criticism gets it wrong. Pakistan’s startup wave did produce real things. It brought talent into tech, product, marketing, operations, and finance. It normalized the idea that Pakistani founders could build at a larger scale. It created demand for modern tools, better user experiences, and faster digital services. It also exposed gaps in logistics, commerce, and financial access that traditional businesses had long ignored. Even failed startups can leave behind useful infrastructure, trained talent, and better market understanding.
So the point is not that the entire startup wave was fake. It wasn’t.
The point is that too much of it became theatrical. It was too dependent on capital, too addicted to narrative, and too willing to confuse motion with strength. The ecosystem was not built entirely on fraud, but it often behaved as if money raised was the same thing as value created. It isn’t.
What is happening now may actually be useful, even if it is ugly. As Kalsoom Lakhani of Invest2Innovate has noted, the current climate has also highlighted founder resilience and adaptability, which may matter more now than hype ever did.
This downturn is forcing a reset. It is stripping the glamour away and asking much tougher questions. Can this company make money? Can it hold customers without bribing them through discounts? Can it survive without constant fundraising? Does it solve a painful enough problem that people will keep paying for it even in a bad economy? These are not anti-startup questions. They are the only questions that matter if the goal is to build something real.
And maybe that is exactly what Pakistan’s ecosystem needed.
In healthier startup environments, not every ambitious business is forced into the venture capital mould. Some companies should raise money. Others should bootstrap, grow carefully, and build profitable foundations before chasing scale. Pakistan especially needs more of the second type. It needs founders who understand operations, not just storytelling. It needs investors who reward discipline, not just charisma. It needs media that stops treating funding rounds like trophy ceremonies. Most of all, it needs a startup culture that values survival and substance over aesthetics.
There are signs that the ecosystem is already being forced in that direction. Even in this much weaker environment, a few companies have still managed to attract capital. Business Recorder reported in August 2024 that DealCart raised $3 million in seed funding, while NayaPay appeared on Forbes Asia’s “100 to Watch” list. These do not prove that the old boom is back. They suggest something else: money has not disappeared completely, but it is far more selective now.
That is probably better.
By 2025, the overall picture still looked subdued. Reporting indicated that startup funding remained far below the 2021 and 2022 highs, even if there were hints of modest recovery from the absolute lows. That suggests Pakistan is not heading back into another easy-money frenzy anytime soon. It is entering a smaller, harsher, more grounded phase. For founders who were only good at theatre, that is bad news. For founders who can actually build, it may be the best thing that could happen.
Because the real future of Pakistani entrepreneurship will not be built by whoever can make the loudest claim about disruption. It will be built by people who can create businesses that work in this country as it actually exists. Not in pitch decks. Not in imported startup fantasies. Not in investor-friendly slogans. In the real Pakistan, where margins matter, customer trust matters, cash flow matters, and bad assumptions get punished brutally.
That is less glamorous, but far more serious.
Maybe the startup hype is over. Good.
Pakistan does not need another cycle of inflated optimism where every funded app is treated like a national breakthrough. It does not need more founders performing certainty while their unit economics bleed. It does not need more investors rewarding burn as long as the deck looks polished. And it definitely does not need more startup media coverage that mistakes fundraising for achievement.
What it needs now is much simpler and much harder.
It needs businesses with discipline.
It needs founders with realism.
It needs capital with patience.
It needs ambition, but stripped of fantasy.
The theatre is ending, and frankly, it should.
Because if Pakistan wants a real startup ecosystem, one that lasts longer than the next funding cycle, then this correction is not the tragedy. It is the test.
And maybe, for the first time in a while, the performance is over and the actual work can begin.