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Thursday, February 15, 2024

Pakistan’s top startup Airlift shuts down

The ongoing global recession and the recent downturn in capital markets have affected the economic activities of Airlift.

After three years, Airlift has decided to shut down its quick commerce operations from 13th July (today). This is a major upset as Airlift is Pakistan’s top startup that was responsible for the country’s largest single private funding round in history.

Multiple Airlift employees confirmed to the media that the company announced the decision of the shutdown in a meeting. According to the details, Airlift was attempting to put together a new round of funding as recently as last week but “multiple” investors told the firm that it will take them at least two months to wire the money.

Read more: How tech startups can help boost Pakistan’s economy

Pertinent to mention, Airlift was already struggling. The firm shut down its operations in second-tier cities like Faisalabad, Gujranwala, Sialkot, Hyderabad and Peshawar a couple of months back. It also sacked almost one-third of its employees to reduce the salary bill. However, now it has decided to permanently shut down operations all over Pakistan.

Airlift had also paused all deliveries across Pakistan during the three-day festival of Eidul Azha, which typically sees a surge in demand for delivery services. Furthermore, it emptied all of its warehouses.

Airlift shuts down: Tough time for Pakistani startups?

Launched in 2019, Airlift Technologies was a Pakistani company that offered instant delivery services. Customers used a mobile application or website to order groceries and essentials online. Airlift then secured the items from their warehouse, delivering the items to the consumer within 30 minutes.

In 2021, Airlift announced $85 million Series B financing led by investors around the world and was one of the largest financing in the Middle East and North Africa (MENA) region co-led by Josh Buckley (Buckley Ventures) and Harry Stebbings (20VC). The financing was also about twice the size of the largest private company initial public offering (IPO) in Pakistan’s history at the time.

Read more: Pakistani truck startup raises largest seed funding in MENAP region!

However, the ongoing global recession and the recent downturn in capital markets have affected economic activity across the board. Moreover, record-high inflation and petrol prices impacted not just the population’s purchasing power and ability to spend extra on quick delivery but also the company’s own costs and margins, leading to the inevitable shutdown of Airlift.

The dire economic conditions have adversely impacted startups. Ride-hailing service Careem recently suspended its food delivery service, citing shifting economic conditions. App-based bus service Swvl also suspended its services in Karachi, Lahore Islamabad, and Faisalabad last month because of the “global economic downturn”.