Airlift, Pakistan's Largest Startup, Shuts Down Following Funding Crisis
Pakistan's largest startup Airlift is closing its doors, two sources familiar with the matter told TechCrunch, following its inability to raise new capital.
The startup announced to employees on Tuesday evening that it would close on Wednesday, according to sources and slides shown to them. The startup was trying to set up a new round just last week, but "several" investors told the company it would take them at least two months to wire the money, one of the interviewees said. slides, which was obtained by TechCrunch. /p>
"Other investors don't want to take on the risk of wiring before others," the slide says.
Airlift operated a fast commercial service in eight Pakistani cities, including Lahore, Karachi and Islamabad. Users could order groceries, fresh produce and other essentials, including medications, as well as sporting goods from the Airlift website or app and have them delivered within 30 minutes. /p>
The startup raised $85 million in the country's largest Series B round in August, at a valuation of $275 million, the highest of any Pakistani startup. Harry Stebbings of 20VC and Josh Buckley of Buckley Ventures led this round.
Update: Airlift founder Usman Gul has confirmed the development to TechCrunch and provided notes detailing events over the past few months.
Airlift was attempting to raise a new round through SAFE at a $500 million valuation earlier this year, according to a source with direct knowledge of the event.
The disappearance of the startup could dampen the enthusiasm of the local ecosystem. When it lifted its Series B round, then-Pakistani Prime Minister Imran Khan publicly praised the startup for its progress. “As a pioneering tech startup in Pakistan that had set a new precedent, Airlift's success was seen as a milestone for a burgeoning tech ecosystem in emerging markets. We believe the ecosystem will continue to thrive and some of the most valuable technology companies in emerging markets are yet to start,” Gul wrote in a letter to staff on Tuesday.
The start-up says it will pay out severance packages to employees within the next four to eight weeks and settle payments due to suppliers and stakeholders. "Teammates are not required to come to work beyond today - access revocation will occur late Thursday afternoon, followed by communication via personal emails," the startup said. in another slide obtained by TechCrunch.
Earlier this year, Airlift began expanding into South Africa, a move that has significantly increased its spending. In a memo to staff in May this year, obtained by TechCrunch, Gul warned that market conditions had suddenly deteriorated and that Airlift needed to be "extremely judicious in the way capital is deployed and managed" and freeze. new hires. .
He said the startup's expansion into South Africa "will remain at a nascent stage in fiscal 2022).
In Tuesday's memo, Gul said Airlift was able to achieve order-level profitability, maintain reasonable scale and reduce financial burden by 66%. “As of July 2022, Airlift was approximately three months away from operating profitability (i.e. positive cash flow from operations) and approximately 6-9 months from enterprise level profitability (i.e. positive cash flow from operations) 'i.e. free cash flow),' he wrote.
"With the above developments in May, one of our investors stepped in to lead Airlift's Series C1 funding. We received tremendous support from the potential lead to open the doors to other investors to stage the round. First Round Capital, Indus Valley Capital, Buckley Ventures, 20VC and other investors have agreed to participate in the round with large checks."
"In early July, Airlift had a clear path to close the round; the company sent out documents for all participating investors to sign. Last week, amid rapidly deteriorating conditions in the global economy, several Participants shared uncertainty about transmission schedules and their disbursements, which ultimately meant that the capital needs of the company would not be met. Ultimately, the round failed,” he added. .
Pakistan's largest startup Airlift is closing its doors, two sources familiar with the matter told TechCrunch, following its inability to raise new capital.
The startup announced to employees on Tuesday evening that it would close on Wednesday, according to sources and slides shown to them. The startup was trying to set up a new round just last week, but "several" investors told the company it would take them at least two months to wire the money, one of the interviewees said. slides, which was obtained by TechCrunch. /p>
"Other investors don't want to take on the risk of wiring before others," the slide says.
Airlift operated a fast commercial service in eight Pakistani cities, including Lahore, Karachi and Islamabad. Users could order groceries, fresh produce and other essentials, including medications, as well as sporting goods from the Airlift website or app and have them delivered within 30 minutes. /p>
The startup raised $85 million in the country's largest Series B round in August, at a valuation of $275 million, the highest of any Pakistani startup. Harry Stebbings of 20VC and Josh Buckley of Buckley Ventures led this round.
Update: Airlift founder Usman Gul has confirmed the development to TechCrunch and provided notes detailing events over the past few months.
Airlift was attempting to raise a new round through SAFE at a $500 million valuation earlier this year, according to a source with direct knowledge of the event.
The disappearance of the startup could dampen the enthusiasm of the local ecosystem. When it lifted its Series B round, then-Pakistani Prime Minister Imran Khan publicly praised the startup for its progress. “As a pioneering tech startup in Pakistan that had set a new precedent, Airlift's success was seen as a milestone for a burgeoning tech ecosystem in emerging markets. We believe the ecosystem will continue to thrive and some of the most valuable technology companies in emerging markets are yet to start,” Gul wrote in a letter to staff on Tuesday.
The start-up says it will pay out severance packages to employees within the next four to eight weeks and settle payments due to suppliers and stakeholders. "Teammates are not required to come to work beyond today - access revocation will occur late Thursday afternoon, followed by communication via personal emails," the startup said. in another slide obtained by TechCrunch.
Earlier this year, Airlift began expanding into South Africa, a move that has significantly increased its spending. In a memo to staff in May this year, obtained by TechCrunch, Gul warned that market conditions had suddenly deteriorated and that Airlift needed to be "extremely judicious in the way capital is deployed and managed" and freeze. new hires. .
He said the startup's expansion into South Africa "will remain at a nascent stage in fiscal 2022).
In Tuesday's memo, Gul said Airlift was able to achieve order-level profitability, maintain reasonable scale and reduce financial burden by 66%. “As of July 2022, Airlift was approximately three months away from operating profitability (i.e. positive cash flow from operations) and approximately 6-9 months from enterprise level profitability (i.e. positive cash flow from operations) 'i.e. free cash flow),' he wrote.
"With the above developments in May, one of our investors stepped in to lead Airlift's Series C1 funding. We received tremendous support from the potential lead to open the doors to other investors to stage the round. First Round Capital, Indus Valley Capital, Buckley Ventures, 20VC and other investors have agreed to participate in the round with large checks."
"In early July, Airlift had a clear path to close the round; the company sent out documents for all participating investors to sign. Last week, amid rapidly deteriorating conditions in the global economy, several Participants shared uncertainty about transmission schedules and their disbursements, which ultimately meant that the capital needs of the company would not be met. Ultimately, the round failed,” he added. .
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