Shaping Tomorrow: The Growth of AI Startups in Pakistan

Introduction: AI as a Central Tenet of Modern Growth

Artificial Intelligence (AI) has increasingly emerged as a fulcrum of global economic transformation. From transforming healthcare systems to revolutionizing agricultural production, AI is no longer viewed as a utopian dream but as a reality of the day that fuels competitiveness, efficiency, and growth. Nations that make strategic use of AI are placing themselves at the apex of the Fourth Industrial Revolution, reshaping both their national economies and their global standing.

For Pakistan, the stakes are particularly high. With its youthful, tech-savvy population, increasing internet penetration, and expanding digital economy, the nation stands at a critical juncture. The issue is not if Pakistan will embrace AI, but how rapidly and efficiently it can to make growth inclusive. Optimistically, the state is starting to react with purpose-driven policies and programs, including the National Artificial Intelligence Policy, as part of the wider Digital Pakistan Vision. Such initiatives reflect the insight that AI is not a mere technology, but a national development tool to be strategically leveraged.

The Startup Ecosystem in Pakistan: From Nascent to Emerging

A decade ago, Pakistan’s startup ecosystem was limited in scope, dominated by small-scale ventures in e-commerce and services. Today, the picture is very different. According to data from local incubation centres, startup investments have multiplied, accelerators are expanding, and global venture capital is taking notice of Pakistani entrepreneurs.

Pakistan’s startup ecosystem has shown spectacular growth in the last five years. According to research in 2021 alone, local and international investors poured in capital totalling over USD 350 million, a higher inflow in 2021 than in the last six years combined. Similarly, in 2020, Pakistan raised USD 83 million, more than double the funding in 2019. This includes market developments in the AgriTech space, as the startup ecosystem has shown a burgeoning environment for growth of more digital agriculture interventions.

The launching of National Incubation Centers (NICs) in cities like Lahore, Karachi, Islamabad, Quetta, and Peshawar has been key to incubating this growth. Supported by public-private sector collaborations, these centres offer funding, mentorship, and networking. They have helped startups not just survive but grow. Programs like Ignite’s National Technology Fund have further provided crucial support by financing innovative projects and fostering an entrepreneurial culture.

This transformation has created fertile ground for AI startups. Where innovation used to be about developing a food delivery app or a cab service, now it is more about developing AI-based solutions for agriculture, healthcare, fintech, and logistics. The ecosystem is shifting away from “copycat” approaches towards deep-tech innovation specific to Pakistan’s specific problems.

Agriculture: The AI-Enabled Third Green Revolution

Agricultural technology, or AgriTech, refers to the use of technology to improve agricultural practices and techniques for increased output and improved outcomes. In the past two decades, agricultural production has undergone a period of rapid digital transformation that is driven by digital connectivity, data systems, artificial intelligence (AI) and analytics, Internet of Things (IoT), robotics, sensors, and imagery devices. AgriTech operates at the intersection of the technology and agriculture ecosystems, making it important therefore to understand and analyse drivers and trends of digital technologies as a means to unpack AgriTech in Pakistan.

Building upon the preceding section the majority of Pakistan’s AgriTech growth has been spurred by the private sector, which plays the dual role of creating and scaling AgriTech solutions. Increased digitalisation and overall tech literacy have also enabled AgriTechs to operate in a more conducive and ripe market, as compared to early AgriTechs like Mandi Express that required more capital to build technology. This enables more recent startups such as Tazah and EasyFresh to gain traction at a faster pace. Other notable tech Agri E-Commerce start-ups include: AgriDunya, Easyfresh, PakAgri etc. In Smart Farming: crop2x, IVS, Cowlar, RemoteWell etc all of which are focused on developing AI-powered platforms that provide farmers with real-time advice on soil health, irrigation scheduling, and pest management and experimenting with sensor-based drip irrigation etc. Other start-ups are centred around Digital Advisory (FarmDar, AgriByt, Industrus etc), Agri DFS (Beythak, Reap Agro) and Digital Procurement (Crop Drop).

Policy and Government Role: Laying the Foundations

It is important to note however that the rapid growth of AI startups in Pakistan has not happened in isolation. It is being shaped and accelerated by policy interventions that aim to create a conducive environment for innovation.

The National Artificial Intelligence Policy is one such milestone. Developed by the Ministry of Information Technology and Telecom, it outlines a roadmap for integrating AI across key sectors such as healthcare, agriculture, education, and governance. The policy emphasizes:

• Capacity building through specialized AI training programs and university curricula.
• Regulatory frameworks for ethical AI use, data protection, and intellectual property.
• Public-private partnerships to channel investments and scale successful innovations.
• Regional collaboration to leverage international expertise and technology transfer.

Complementing this, the government’s Digital Pakistan Vision is focused on digitizing governance and building digital infrastructure, both of which form the backbone for AI adoption. Projects such as the Pakistan Business Portal, aimed at simplifying business operations, and Ignite’s support for AI-focused startups highlight the government’s increasing commitment to digital innovation.

Of provincial policies, Punjab’s Agriculture Policy 2018 dedicates the most attention towards agricultural innovation and technology. To increase investment and incorporate technology, the policy aims to optimise subsidy programmes through technology-enabled targeting, improve access to finance through mobile money, incentivise SMEs by matching grants, and establish warehouse receipt financing. The Punjab Government has also developed a digitised e-Credit solution, which is integrated with the NADRA database to enable easier access to credit for farmers.

These policy frameworks are not merely symbolic, rather, they are essential for addressing structural barriers such as lack of high-end computing infrastructure, fragmented data governance, and insufficient R&D funding. By setting clear priorities, Pakistan is signalling to both local and international investors that AI is a national development priority.

The Road Ahead: Charting Pakistan’s AI Future

While progress is evident, challenges remain. Pakistan must navigate several hurdles to fully realize the promise of AI startups:

• Infrastructure Gaps: Access to high-performance computing remains limited, making advanced AI development costly.
• Talent Shortages: Despite a large youth population, there is a shortage of specialized AI researchers and data scientists.
• Financing: Many startups struggle to secure funding beyond seed stage, especially in deep-tech areas that require significant R&D.
• Trust and Adoption: Farmers, doctors, and consumers alike must trust AI solutions: requiring awareness campaigns and capacity-building.

Maybe above all, Pakistan needs to infuse inclusivity and ethics into its AI journey. Women, who make up a significant proportion of agricultural labour, need to be part of the AI adoption process. Likewise, AI needs to be regulated to make sure that it serves to increase social equity and not to counteract it.

Conclusion: Shaping Tomorrow Through AI Startups

AI startups in Pakistan represent more than technological ambition; they embody the possibility of reshaping the nation’s future. With the right policies, infrastructure, and investment, these ventures can catalyse a new wave of growth that is inclusive, sustainable, and globally relevant.

The emergence of AI is not merely about developing more intelligent machines; it is about developing wiser societies. For Pakistan, this represents an opportunity to bypass development phases and become a major player in the digital economy. In cultivating its AI startups, Pakistan is not merely crafting tomorrow: it is guaranteeing that the future will be one where its citizens, industries, and institutions prosper in the era of intelligence.