One of Pakistan’s leading startups, Airlift, has stated that it will cease operations locally, blaming the ‘global crisis and the current dip in capital markets for the decision. Airlift began as a bus company but eventually moved its attention to the last-mile delivery industry.
It raised $85 million in the largest funding round for a local business last year. The business ceased operations in less developed cities including Faisalabad, Gujranwala, Sialkot, Hyderabad, and Peshawar a few months ago. It also let go of about a third of its workers to cut costs on wages.
The company has raised a total of $109.2m in six rounds, according to startup data portal CrunchBase, with Future Positive and Moving Capital among its most recent shareholders. For the past few months, Pakistan’s startup ecosystem has been in disarray as a number of notable companies have announced service suspensions, cutbacks, and reductions.
With the changing economic climate as a justification, service for hailing cabs, Careem has terminated its meal delivery business. Last month, the ‘global economic slowdown’ led Swvl, an app-based bus service, to halt operations in Karachi, Lahore, Islamabad, and Faisalabad. New Business endeavor in freight management Truck It In recently ‘recalibrated’ its approach and relocated part of its workers to ‘address other difficulties, when it referenced the ‘global economic uncertainties.
Startups are having a hard time securing new capital in order to quickly acquire clients. Venture investors no longer offer firms blank cheques to enable them to pay a steep price to gain new clients. Instead of concentrating primarily on revenue mobilization, investors are requesting that entrepreneurs reach early breakeven points. No wonder startup investment dropped from flows of $173 million in the previous quarter to $103.8 million in 22 agreements during the April–June period, a decrease of nearly 40%.
Early in July, Airlift had a clear plan for closing the round; the company sent documentation to all participating investors for signatures. Several participants shared concerns about wire scheduling and their payments last week amid rapidly deteriorating economic conditions worldwide; this eventually meant that the Company’s capital needs would not be satisfied. In the end, the contest was a failure.
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Additionally, the corporation has disclosed a severance package for its workers that includes two months’ pay and a platform for job placement. As part of their ongoing shut-down process, their team will contact proactively with suppliers, vendors, and other third parties to address arrears and liabilities, they continued. The general technological ecosystem in the nation, Airlift hoped, will continue to prosper, and some of the most valuable technology companies in emerging markets are still yet to be launched, and will not be impacted by the closure.
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