The Securities and Exchange Commission of Pakistan (SECP) has officially granted a license to KOKO Tech Pakistan (Private) Limited, a subsidiary of Alibaba Group, to operate Buy Now, Pay Later (BNPL) services in Pakistan.

According to the SECP, KOKO Tech Pakistan will introduce modern, AI-powered credit assessment systems along with globally proven digital infrastructure. This is expected to bring more innovative and data-driven financing solutions to the local market.

The initiative aims to improve access to consumer financing, especially for young individuals, freelancers, and small businesses that often face challenges in obtaining loans through traditional banking systems.

With the backing of Alibaba’s global expertise and strong financial resources, KOKO Tech Pakistan is well-positioned to support small and medium enterprises (SMEs), promote e-commerce growth, and contribute to Pakistan’s transition towards a more inclusive, technology-driven financial ecosystem.

The SECP also noted that this move represents a direct inflow of foreign investment into Pakistan’s financial sector.

Speaking on the development, SECP Chairman Dr Kabir Ahmed Sidhu said that the entry of Alibaba Group will enhance competition and drive innovation in the country.

He further added that Pakistan continues to be an attractive destination for international investors, thanks to its large population, increasing digital adoption, and improving regulatory environment.

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Pakistan’s IT and IT-enabled services sector recorded $2.97 billion in export inflows during July to February FY2026, marking a 19.6% year-on-year increase. However, a steady drop in monthly receipts over the past two months has tempered expectations around the government’s $5 billion annual target.

IT Exports Hit $2.97 Billion in July to February FY2026

According to data from the State Bank of Pakistan (SBP), Pakistan’s ICT export earnings grew by 19.78% year-on-year, reaching $2.61 billion in the first seven months of the current fiscal year ending June 2026, up from $2.18 billion during the same period last year. Cumulative inflows reached $2.97 billion by the end of February 2026, compared with $2.48 billion in the same period of FY2025.

IT exports now account for over 10.8% of Pakistan’s total exports. This is considered a historic milestone, reflecting the country’s gradual economic shift from traditional goods like textiles and rice toward high-value digital services.

Monthly Receipts Show a Two-Month Decline

Despite the cumulative growth, monthly figures reveal a softening trend. The sector peaked at $437 million in December 2025, before declining to $374 million in January 2026 and $365 million in February 2026, a drop of over 16% in just two months.

Analysts project exports to grow 18 to 20% in FY2026, which could bring the total to around $4.5 billion. This figure still falls short of the ambitious $5 billion target set under the government’s national economic plan, Uraan Pakistan. At the current monthly run rate of approximately $365 million, full-year IT exports are likely to plateau around $4.4 to $4.5 billion.

Geopolitical and Regional Pressures Add Uncertainty

The slowdown in monthly inflows is partly attributed to broader global uncertainty. Ongoing regional tensions have prompted clients, particularly across the US and GCC markets, to delay digital transformation and expansion projects. This has reduced near-term order flow for Pakistani IT firms.

The growing tendency of international companies to outsource software development, cybersecurity, and digital transformation projects has boosted Pakistan’s profile as an affordable IT services provider. Even so, regional instability continues to introduce uncertainty into forward planning for many of these engagements.

Beyond export figures, Pakistan’s broader startup ecosystem reflects a market in a phase of cautious maturation, with genuine momentum tempered by structural funding constraints.

Ecosystem Value Surpasses $4 Billion

Pakistan’s venture capital-backed startups have surpassed a combined enterprise value of $4 billion, up 3.6 times since 2020, according to the January 2026 Pakistan Tech Report by Dealroom.co and inDrive. The growth rate outpaces larger ecosystems including India, New York, Paris, and Dubai, placing Pakistan among emerging “New Frontier” tech markets.

The country now hosts over 170 VC-backed startups, with roughly 17 “breakouts” that have raised between $15 million and $100 million, two scale-ups that have crossed $100 million in funding, and 13 “Colts” generating between $25 million and $100 million in annual revenue.

According to TechList Pakistan, which tracks startup funding activity across the country, deal flow in early-stage rounds, particularly pre-seed and seed, has remained consistent through Q1 2026. Fintech, healthtech, and B2B SaaS have emerged as the three most active verticals during this period.

Startup Funding Rebounds in 2025

Pakistani startups secured over $74.23 million in equity and hybrid financing in 2025, spanning pre-seed, seed, and Series A rounds across fintech, mobility, healthtech, and other sectors. According to Data Darbar, local startups raised about $36.6 million in equity across 10 disclosed rounds, a modest increase from $22.5 million the previous year, though deal volume slipped slightly from 15 to 14 transactions.

Fintech and Healthtech Lead Investment Activity

The fintech sector continues to dominate investment activity, with startups such as Haball and Metric securing sizeable Pre-Series A and seed funding rounds. Analysts say fintech’s appeal lies in its ability to integrate with banking infrastructure, simplify payments, and tap into an underserved market of SMEs and digital consumers.

Haball secured a $52 million Pre-Series A funding round led by Zayn VC and backed by Meezan Bank. The company has scaled its platform to handle over $3 billion in payments, disbursing more than $110 million in financing while supporting thousands of SMEs and multinational clients.

Healthtech is emerging as the second major growth engine. MedIQ’s $6 million Series A and Xylexa’s $1 million seed round highlight strong investor appetite for solutions that address healthcare accessibility, a critical need in a country of over 240 million people.

No Unicorns Yet: The Capital Gap Remains

Despite the momentum, no Pakistani startup has yet reached unicorn status or surpassed $100 million in annual revenue. Limited domestic capital is widely identified as the primary bottleneck holding the ecosystem back from the next level of scale.
Globally, venture capital investment reached $512.6 billion in 2025, up 30.8% from 2024, with artificial intelligence alone accounting for $270.2 billion. For Pakistan, these global trends highlight the structural challenge of competing in capital-intensive sectors like AI without matching infrastructure or investment scale.

Female-Founded Startups Gain Ground

One of 2025’s notable trends is the rise of female-led startups, which raised $8.8 million in disclosed equity, accounting for more than 24% of total funding. Startups including Shadiyana, BusCaro, Metric, MedIQ, and Lean Outset were among the female-founded or co-founded ventures contributing to this shift. TechList Pakistan has closely documented this trend through its founder coverage and funding trackers.

Policy Reforms Supporting Export Growth

The State Bank of Pakistan raised the permissible retention limit in Exporters’ Specialised Foreign Currency Accounts (ESFCA) from 35% to 50%. This allows IT exporters to retain a larger share of their dollar earnings, a reform that has provided greater liquidity for companies reinvesting in global operations.

Pakistan’s 5G spectrum auction, conducted in March 2026, is expected to unlock new product categories in healthtech, edtech, IoT, and industrial automation that have remained structurally inaccessible on existing infrastructure. Building quality talent, empowering grassroots entrepreneurship, and accelerating local AI adoption are identified as the three pillars needed to position Pakistan as a competitive global IT export hub.

Long-Term Target: $10 Billion by 2029

National long-term targets foresee $10 billion in annual IT exports by 2029, a goal that requires a significant acceleration from the current growth trajectory. IT exports now constitute over 40% of Pakistan’s total services exports, supporting foreign exchange stability, high-value employment, and entrepreneurship. This cements the sector as a core pillar of Pakistan’s broader economic strategy.

Closing the gap between the current pace and the $5 billion FY2026 target will require reversing the recent monthly decline, broadening client geographies beyond the US and Gulf, and continuing to scale startups into globally competitive businesses. The structural groundwork is being laid, but sustained execution remains the sector’s defining test going forward.

Sources: State Bank of Pakistan (SBP), Ministry of Information Technology and Telecommunication, Data Darbar, Dealroom.co / inDrive Pakistan Tech Report (January 2026), Topline Research, Pakistan Software Houses Association (P@SHA), TechList Pakistan.

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The platform, named Wukong, enables businesses to automate complex workflows by coordinating multiple AI agents within a single interface. It can handle tasks such as document editing, spreadsheet management, meeting transcription, and research, making it a comprehensive productivity tool. Currently, Wukong is available through an invitation-only beta program.

The launch follows the company’s recent restructuring under the newly formed Alibaba Token Hub (ATH) business group, highlighting a stronger focus on enterprise-level AI solutions. Wukong is positioned as the flagship product of the Wukong Business Unit within ATH.

Read: Nvidia bets on AI inference as chip revenue opportunity hits $1 trillion

Users can access Wukong either as a standalone desktop application or via DingTalk, Alibaba’s workplace collaboration platform used by over 20 million corporate users.

In addition, the platform is expected to integrate with other popular communication tools such as Slack, Microsoft Teams, and WeChat, according to the company’s official statement.

The move comes amid rising interest in AI agent technologies in China, largely driven by the popularity of OpenClaw, an open-source AI agent tool that has recently gained traction across the tech community.

This growing trend has pushed major tech players, including ByteDance, Tencent, and AI startup Zhipu AI, to introduce similar solutions, despite increasing concerns from regulators over potential security risks.

Chinese companies, many of which provide open-source AI models that are free to download, have significantly reduced token prices as competition intensifies across the domestic market.

Leading models such as DeepSeek, Qwen, and ChatGLM are now priced 10 to 20 times lower than their U.S. counterparts. This aggressive pricing strategy is helping Chinese firms expand their global footprint, but it is also raising concerns about long-term profitability in the sector.

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Jazz International Holding Limited, a subsidiary of global telecom group VEON incorporated in the UAE, has signed a definitive agreement to acquire a controlling stake in TPL Insurance Limited, a publicly listed insurance company in Pakistan. The acquisition deal is valued at approximately Rs4.15 billion, marking a significant development in Pakistan’s digital financial services landscape.

TPL Insurance operates as a digital-first insurance provider, offering a range of insurance products including auto, health, fire, and property coverage. The company has built a strong presence in Pakistan’s InsurTech sector with a technology-driven operating model and established distribution network.

According to company data, TPL Insurance recorded Gross Written Premium (GWP) of Rs5.7 billion and issued more than 277,000 insurance policies as of December 31, 2025. The company holds a general insurer license and maintains an AA credit rating, reflecting its financial stability and operational performance in the insurance sector.

The acquisition aligns with Jazz’s broader strategy to expand its digital services ecosystem and strengthen its presence in financial technology and digital financial services.

Aamir Ibrahim, Chief Executive Officer of Jazz, stated that the acquisition represents a key milestone in the company’s long-term vision of creating a comprehensive digital platform that extends beyond telecom services.

He noted that integrating insurance services into Jazz’s digital financial portfolio, which includes JazzCash, Mobilink Bank, and FikrFree — will enable the company to provide broader financial protection services to millions of users across Pakistan.

Pakistan’s insurance penetration remains significantly low compared to global averages, leaving a large portion of the population without financial protection against risks. Industry experts believe that digital distribution channels can play a major role in bridging this gap by making insurance products more accessible and affordable.

Through this acquisition, Jazz aims to leverage its large digital user base and fintech infrastructure to scale technology-driven insurance products and accelerate the adoption of digital insurance services in the country.

The transaction is expected to close in the second quarter of 2026, subject to necessary regulatory approvals. The deal between TPL Corp Limited and Jazz International Holding Limited will also require clearance from the Competition Commission of Pakistan (CCP) before completion.

Once finalized, the acquisition could significantly strengthen the digital insurance ecosystem in Pakistan and contribute to expanding financial inclusion through integrated fintech and insurance services.

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In a major step towards advancing Pakistan’s digital payment ecosystem, PayFast, a State Bank of Pakistan-licensed fintech, and Askari Bank, one of the country’s leading commercial banks, have entered into a strategic partnership to roll out a white-label digital checkout solution powered by Raast.

The agreement was signed at Askari Bank’s Digital Innovation Lab at NSTP, NUST in Islamabad, setting the stage for a collaboration aimed at delivering secure, seamless, and customizable digital payments for businesses and consumers nationwide.

Raast at the Core of Innovation

At the heart of this partnership is Raast, Pakistan’s instant and interoperable payment system. By embedding Raast into the platform, the solution will enable faster, simpler, and more secure Person-to-Merchant (P2M) payments, while driving financial inclusion by expanding access to reliable digital transactions across retail, e-commerce, and service sectors.

Empowering Institutions and Consumers

Through this alliance, Askari Bank will leverage PayFast’s robust infrastructure to offer its customers and merchants a fully branded checkout experience. The platform will feature Raast-enabled digital merchant onboarding, an internet payment gateway, and e-invoicing, helping businesses streamline online payments and improve operational efficiency.

Adnan Ali, CEO of PayFast, said:

“This partnership reflects our commitment to local solutions for local needs. By integrating Raast into Askari Bank’s white-label platform, we are delivering secure and seamless payments under a trusted infrastructure—empowering institutions and creating lasting impact for businesses and consumers alike.”

Mahwish Saad Khan, Chief Business Officer at PayFast, added:

“This milestone strengthens our mission to provide institutions with modern digital infrastructure. By embedding Raast into the checkout experience, we are supporting Askari Bank in leading Pakistan’s payments innovation.”

Ali Naqvi, Chief Information Officer at Askari Bank, commented:

“With Raast-powered onboarding, e-invoicing, and internet payment solutions, we are not only strengthening Askari Bank’s digital footprint but also unlocking new opportunities for retail, wholesale, e-commerce, and services. This is more than technology—it’s empowerment, inclusion, and accelerated growth for Pakistan’s digital economy.”

Toward a Cashless Pakistan

This collaboration aligns with Prime Minister Shehbaz Sharif’s vision of a cashless, digitally empowered Pakistan, reinforcing the role of local financial institutions and fintechs in shaping a more inclusive and efficient economy.

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