Airlift

What did it do?

Airlift started in Lahore in March 2019 as an app-booked shuttle service focused on mass transit. When pandemic lockdowns halted that business, the company switched to a quick-commerce model, delivering groceries and essentials from its own warehouses within 30 minutes. As well as several cities in Pakistan, it operated in Johannesburg, Pretoria and Cape Town in South Africa.

Why did it shut down?

The rapid delivery model, built on a network of warehouses, needed regular injections of new capital to keep growing. With a USD 85 million Series B in 2021, the company turned to international expansion. In 2022, as global economic conditions deteriorated and venture capital dried up, it could not find new funding. The company halted all operations on 13 July 2022 and slid into bankruptcy.

The story

When Usman Gul lost hours in traffic on a holiday visit to Lahore, he came up with an idea: ease the city's chaotic transport with regular, app-booked shuttle buses. In March 2019, with a small team and USD 50,000 of his own money, he founded Airlift and began a pilot in Lahore. Ahmed Ayub and Meher Farrukh were also on the founding team.

The start was fast. In its first five months the company reached 50,000 passengers in Lahore; by July 2019 it was also operating in Karachi, and in August it raised USD 2.2 million in seed funding. Then came a USD 12 million Series A, with participation from the US firm First Round Capital. Then the pandemic struck, and Pakistan's full lockdown halted the mass-transit business indefinitely.

Gul saw an opportunity and turned the company into a quick-commerce business. The new service, launched as Airlift Express, brought groceries and essentials to the door within 30 minutes from the company's own warehouses. The pivot won investors over: in 2021 came a USD 85 million Series B co-led by Buckley Ventures, recorded as the largest Series B ever raised by a start-up in the Pakistan, Middle East and North Africa region. Total funding rose to USD 110 million and the valuation to USD 275 million. The company expanded to Johannesburg, Pretoria and Cape Town in South Africa.

In 2022 the wind turned. The global economic slowdown and shrinking venture capital left without funding a model that grew through a warehouse network and constantly needed fresh capital. TechCrunch reported that Pakistan's most prominent start-up was shutting down because of a funding crunch. Airlift halted all operations on 13 July 2022; Reuters reported the closure as the global downturn's first start-up casualty in Pakistan.

Airlift's story shows how vulnerable a model built around a demand window opened by a crisis becomes when the capital markets close. A rapid pivot saved the company in the pandemic; but international expansion, accelerated before it reached profitability, left it exposed when the next shock came.

Lessons for founders

• If you built your model around a demand window opened by a temporary shock such as a pandemic, re-test whether it can survive once the shock is over.
• When you close a big round, do not base your spending plan on the assumption that the next round is certain; know how long you can survive if the funding market shuts.
• Before opening in a new country, show with numbers that unit economics in your home market have turned profitable.

Sources

1. Airlift Technologies (Wikipedia)
2. Pakistan's top startup shutting down following funding crunch (TechCrunch, 2022-07-12)
3. Global downturn claims first Pakistan startup as Airlift closes (Reuters, 2022-07-13)

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