Airlift, a leading Pakistan startup, will be shutting down, according to sources familiar with the situation. The startup told employees in a Tuesday evening meeting that the closure will happen on Wednesday, the sources said.
The startup had been trying to raise additional funds as recently as last week, but according to one of the slides presented to employees, “multiple” investors told the company it would take at least two months for them to wire the money.
“Other investors unwilling to assume the risk of wiring ahead of others,” the slide said.
Airlift operated a quick and convenient commerce service in eight Pakistani cities, including Lahore, Karachi and Islamabad. By ordering groceries, fresh produce, essential items, and even sports goods from the Airlift website or app, users could have their purchases delivered to them in as little as 30 minutes.
The startup raised $85 million in the country’s largest Series B funding round in August, at a valuation of $275 million. This is the highest valuation for any Pakistani startup. Harry Stebbings of 20VC and Josh Buckley of Buckley Ventures led that round.
The airlift was attempting to raise a new round via SAFE at $500 million valuations earlier this year, according to a source with direct knowledge of the event.
The termination of the startup might lead to a decrease in the local ecosystem’s excitement. when it increased its Series B round, Pakistan’s then Prime Minister Imran Khan communicated his contentment with the startup’s development. “By being a technology startup innovating in Pakistan, and thereby setting a new precedent, Airlift’s achievement was seen as an imperative marker for a burgeoning technology ecosystem in developing countries. We think that the ecosystem will persevere and that some of the most beneficial technology companies in developing markets have yet to be established,” Gul wrote in a letter to staff Tuesday.
Silicon Valley Bank recorded $13.5 billion in assets at the end of December, compared to $12 billion at the same point a year ago. Further details on AirBnb’s banks aren’t included in its filing this week. The company is seeking up to $800.25 million in the debut and could be valued as high as $35 billion after proposing a per-share price of between $56 and $60 earlier this month.
The startup has announced that it will complete severance payments to employees within the next four to eight weeks, and that it will clear all outstanding payments to suppliers and stakeholders.
In a statement, the startup said that “teammates are not required to come to work beyond today,” and that access to company resources will be revoked at the end of the day on Thursday.
Earlier this year, Airlift expanded to South Africa, which significantly increased its expenses. In a May note to staff obtained by TechCrunch, Gul warned that market conditions had suddenly worsened and Airlift needed to be judicious in capital deployment and management, and freeze new hirings.
He said the startup’s expansion to South Africa will “remain in a nascent stage in FY 2022).”
In the note Tuesday, Gul said Airlift was able to achieve order-level profitability, maintain reasonable scale, and reduce financial burn by 66%. “As of July, 2022, Airlift was about three months away from operating profitability (i.e. positive cash flow from operations), and about 6-9 months from company-level profitability (i.e. Free Cash Flow),” he wrote.
In May, we received strong interest from potential investors, which led one of our investors to step up and lead Airlift’s Series C1 financing. We received tremendous support from the lead investor in opening doors to other investors, and we are pleased to have First Round Capital, Indus Valley Capital, Buckley Ventures, 20VC and other investors agreed to participate in the round with sizable checks.
In early July, Airlift had a clear path forward to close the round of funding. The Company pushed out documents for signatures to all participating investors. However, last week, amid rapidly deteriorating conditions in the global economy, several participants shared their uncertainty in wire schedules and their disbursements. This ultimately meant that the Company’s capital requirements would not be met. As a result, the round of funding was unsuccessful.