Pakistan’s Airlift shutting down following funding crunch, sources say

Airlift, Pakistan’s most valuable startup, is shutting down, two sources familiar with the matter told TechCrunch, following its inability to raise fresh capital.

The startup told employees Tuesday evening that it will be shutting down on Wednesday, according to the sources and a slide obtained by TechCrunch. The startup was attempting to put together a new round as recently as last week but “multiple” investors told the firm that it will take them at least two months to wire the money, the slide said.

“Other investors unwilling to assume the risk of wiring ahead of others,” the slide said.

Airlift operated a quick commerce service in eight Pakistani cities, including Lahore, Karachi and Islamabad. Users could order groceries, fresh produce and other essential items, including medicines, as well as sports goods from the Airlift website or app and have it delivered to them in 30 minutes.

The startup raised $85 million in a Series B funding round in August, which valued Airlift at $275 million. Harry Stebbings of 20VC and Josh Buckley of Buckley Ventures led that round.

Airlift founder Usman Gul did not immediately return a request for comment.

The startup says it will complete severance payments to employees in the next four to eight weeks and clear due payments to suppliers and stakeholders. “Teammates are not required to come to work beyond today — access revoke will run byu end-of-day Thursday, followed by communication via personal emails,” the startup said in another slide obtained by TechCrunch.

Earlier this year, Airlift attempted to expand to South Africa, a move that significantly increased its expenses. In a note to staff in May this year, obtained by TechCrunch, Gul warned that the market conditions had suddenly taken the turn for the worse and Airlift needed to be “extremely judicious in how capital is deployed and managed.”

He said the startup’s expansion to South Africa will “remain in a nascent stage in FY 2022).”

“Given Airlift’s strong operating metrics, preserving runway is not the motivation — by the end of Q2 2022, Airlift is well positioned to continue to maintain a runway of 12+ months and raise further financing from current investors when/as needed. We are, therefore, well placed because of the strong business performance delivered in the last 18-24 months. However, to race toward profitability, we must cut costs across all fronts,” he wrote at the time. 

This is a developing story. More to follow…

This article was originally published on TechCrunch.com. Read More on their website.

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