The World Bank has proposed a $50 million Pakistan Fund of Funds to channel investment into the country’s thin venture capital market, in a plan that would see public money anchor professionally managed funds that back Pakistani startups. The proposal is set out in the Bank’s initial project information document for the Pakistan Entrepreneurship and Private Investment Catalyst Project. It is a proposal only at this stage: nothing has been approved, and no money has been disbursed.
What the Pakistan Fund of Funds would do
A fund of funds does not write cheques to startups. It commits capital to professionally managed venture capital funds, and those funds then invest in companies. Under the proposal, the entire estimated project cost of $50 million would be financed through the International Bank for Reconstruction and Development (IBRD), the World Bank’s lending arm, leaving no financing gap. The implementing agency named in the document is Ignite, the national technology fund that works under the Ministry of Information Technology and Telecommunication. Using public capital as an anchor is meant to draw additional domestic and international private investors into funds they would otherwise consider too risky or too small.
Photo: Ahmad Haq via Wikimedia Commons, CC BY-SA 4.0
Why the Bank thinks Pakistan needs it
The project document is blunt about the gap. Venture capital investment per capita in Pakistan is less than one tenth of the levels seen in Egypt, Indonesia and Vietnam, economies at a broadly comparable stage. Pakistani founders routinely raise tiny early rounds or relocate abroad to access capital, even though the country’s technology exports and startup output keep growing. The Fund of Funds is designed to expand access to risk capital for innovative and high-growth firms, support productivity and job creation, and strengthen the domestic venture capital market itself, drawing on the model of Jordan’s Innovative Startups and SMEs Fund. The Bank classifies the project’s environmental and social risk as moderate, with safeguards to be applied as the portfolio develops.
The road from proposal to approval
- 19 October 2026: the initial project information document is disclosed by the World Bank
- 22 October 2026: the proposal is first reported in Pakistan, by Dawn
- 20 January 2027: review of the project is expected
- 24 March 2027: the World Bank Board is scheduled to consider approval
That timetable matters for founders reading the headlines: even in the smoothest case, capital from the Pakistan Fund of Funds would reach venture funds, and then startups, well after the Board decision. It also lands in an already busy policy landscape. The government’s own Pakistan Startup Fund, which offers equity-free grants of up to 30 percent of a funding round, is operational and taking applications, and a second $10 million phase was announced on 28 August 2026, though its international fund manager partners are not yet finalised. The Securities and Exchange Commission of Pakistan’s Venture Capital Bill 2026, which would govern funds of this kind, remains draft legislation.
The support that already exists for founders
The Fund of Funds would not be the first public support a Pakistani founder can reach for. The Pakistan Startup Fund, run under the Ministry of Information Technology and Telecommunication, offers an equity-free grant of up to 30 percent of an investment round to startups that are legally incorporated in Pakistan, are active tax filers, and have secured, or are close to securing, private investment; the published grant range runs from US$50,000 to US$1 million. Ignite, the proposed implementing agency for the World Bank project, is also the organisation behind the National Incubation Centers in Pakistan’s major cities, where many early-stage teams find their first workspace and mentors. What none of these programmes supplies at scale is follow-on venture money, the second and third rounds that turn a promising startup into an employer. The proposed fund aims squarely at that missing layer.
What it would mean if approved
If the Board approves the project in March 2027, Pakistan would gain a standing pool of anchor capital for venture funds, the layer of the ecosystem that founders feel most directly when they try to raise a first institutional round. It would sit alongside other recent institutional firsts, such as Karandaaz Pakistan’s accreditation with the Green Climate Fund, covered in our report on Karandaaz Pakistan’s Green Climate Fund accreditation, and alongside the founders already winning backing, including the five women-led startups in our story on the She’s Next Pakistan winners. More startup and business coverage is collected on our Pakistani Startups and Business Success page. For now, the Fund of Funds remains a well-developed proposal with a date in front of the Board, and we will follow it to the vote.
Sources
- World Bank targets Pakistan startup funding gap with $50 million plan, TechJuice
- World Bank proposes $50M Fund of Funds for Pakistan’s startups, UrduPro
- Photo: Victorgrigas via Wikimedia Commons, CC BY-SA 3.0
Umar is an engineer by profession and a passionate writer by passion. He has a deep interest in sharing good news related to Pakistan and has been working hard to promote the positive image of his homeland. Umar has written numerous articles on various topics related to Pakistan, such as technology, sports, culture, and economy.