Global economic downturn claims Pakistan’s top startup Airlift

In a statement, Airlift, the second-largest startup in Pakistan, announced its closing and cited the global financial crisis and the weakening of the capital markets as reasons.

In Pakistan, where a large number of businesses have been founded with the assistance of well-known venture investors, the failure that was made public on Tuesday is the first acknowledged shutdown of a notable company in recent years.

The decision was made following a failed attempt by Airlift to pull together a fresh fundraising round, according to one of the firm presentations, according TechCrunch.

"This has been an extremely taxing decision that impacts a large set of stakeholders and an emerging technology ecosystem," Airlift said in a statement.

According to several investors, Airlift will need more than two months to wire the funds, the startup informed employees. The slide stated that other investors were hesitant to bear "the risk of wiring ahead of others."

In eight Pakistani cities, including Lahore, Karachi, and Islamabad, Airlift ran a quick commerce service. Customers used Airlift's website or corresponding app to purchase groceries, fresh fruit, and other necessities, including prescriptions, and have them delivered in 30 minutes.

In recent years, quick commerce as a sector has gained popularity around the globe, yet these companies also frequently have high capital requirements.

The success of Airlift, a ground-breaking technology firm in Pakistan that had set a new standard, was seen as a turning point for the developing technology ecosystem in developing markets. The ecosystem will continue to flourish, and some of the most valuable technology businesses in emerging countries have yet to be founded.

The business, which had the highest valuation of any Pakistani startup at $275 million, received $85 million in the biggest Series B funding round in August. That round was headed by Josh Buckley of Buckley Ventures and Harry Stebbings of 20VC. It made Airlift the most well-funded startup in Pakistan.

Imran Khan, who was Pakistan's prime minister at the time, officially applauded the firm after learning of its Series B fundraising.

A person with firsthand knowledge of the situation said that Airlift attempted to raise a fresh round earlier in the year via SAFE at a $500 million valuation.

However, the company encountered difficulties as future fundraising became challenging due to a worldwide market slump.

The only worthy competition for Airlift in Pakistan is food delivery startup foodpanda.

Business models with higher liquidity requirements are particularly susceptible, according to Fahad Rauf, head of research at Ismail Iqbal Securities, as a result of the growing cost of borrowing as central banks hike rates to combat skyrocketing inflation.

Even though Airlift was shutting down, it projected more work in emerging regions. The startup said that due to circumstances beyond its control, its journey is over. The larger goal of bringing about constructive transformation in the region will, however, find new life.

Airlift could not immediately be reached for more comment, and the statement did not make it clear whether it would continue operating outside of Pakistan.