Pakistan’s biggest quick commerce startup Airlift has announced to permanently shut down its operations in the country. The move comes after Airlift unsuccessfully attempted to put together a new financing round, deliberations of which continued as recently as last week.
In an official statement posted on its LinkedIn page, Airlift said:
“While the global recession and recent downturn in capital markets has affected economic activity across the board, it has had a devastating impact on Airlift and rendered its shut-down inevitable. On July 12, Airlift’s operations will shut down permanently. This has been an extremely taxing decision that impacts a large set of stakeholders and an emerging technology ecosystem.”
Airlift was initially a bus service that later pivoted to the last-mile delivery segment. It raised $85 million last year in the largest funding round by any local startup. The firm had already shut down its operations in second-tier cities like Faisalabad, Gujranwala, Sialkot, Hyderabad and Peshawar a couple of months ago. It also sacked almost one-third of its employees to reduce the salary bill. According to startup data portal Crunchbase, the company had raised a total of $109.2 million in 6 rounds, with Future Positive and Moving Capital among its most recent investors.
According to market experts, several factors have played a role in Airlift’s demise including the deteriorating state of the country’s economy, with record high inflation and petrol prices impacting not just the population’s purchasing power and ability to spend extra on quick delivery but also the company’s own costs and margins.
The start-up ecosystem in Pakistan has been in turmoil for the last couple of months with a number of prominent players announcing service suspensions, rollbacks and layoffs. 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”. Freight management start-up Truck It In referred to the “global economic uncertainty” when it “recalibrated” its strategy recently and moved some of its staffers to “solve other challenges”.
Startups are struggling to find new funding for rapid customer acquisition. Venture capitalists aren’t willing to write blank cheques anymore to help startups acquire new customers at a heavy price. Investors are asking entrepreneurs to hit early breakevens instead of focusing solely on revenue mobilization.
A computer animation professional with over 23 years of industry experience having served in leading organizations, TV channels & production facilities in Pakistan. An avid car enthusiast and petrolhead with an affection to deliver quality content to help shape opinions. Formerly written for PakWheels as well as major publications including Dawn. Founder of CarSpiritPK.com