Airlift

Airlift was a Lahore-based quick commerce startup that permanently shut down on July 13, 2022.¹² The company raised $85 million in a Series B round in August 2021 at a valuation of $275 million, the largest for a Pakistani startup.¹²⁸ Airlift's shutdown was attributed to the global funding crunch and unsuccessful attempts to raise new capital.¹²⁴

Timeline

Money raised

Airlift raised a $2 million seed round in August 2019 led by Fatima Ventures and Indus Valley Capital.⁶ Airlift raised a $12 million Series A round in November 2019 led by First Round Capital.⁶ Airlift raised a $10 million Series A-1 round in June 2020 led by Quiet Capital.⁶ Airlift raised an $85 million Series B round in August 2021 at a valuation of $275 million, co-led by Harry Stebbings of 20VC and Josh Buckley of Buckley Ventures.²⁸ The Series B round brought Airlift's total funding to $110 million.⁴⁷⁸ Airlift was attempting to raise a new round earlier in 2022 via SAFE at a $500 million valuation, but the round was unsuccessful.²

Investors named in the sources: Harry Stebbings²⁸, Josh Buckley²⁸, First Round Capital⁶⁸, Indus Valley Capital⁶⁸, Fatima Ventures⁶, Quiet Capital⁶⁸, Sam Altman⁸, Biz Stone⁸, Steve Pagliuca⁸, Jeffrey Katzenberg⁸, Taavet Hinrikus⁸, Stanley Tang⁸, Simon Borrero⁸, Bastian Lehmann⁸.

What happened

Airlift was founded in 2019 in Lahore, Pakistan, as a mass transit service that operated an Uber-like service for buses.¹⁶ The startup quickly amassed traction, clocking over 35,000 rides a day.⁸ As the Covid-19 pandemic hit Pakistan, Airlift scrapped its transit service and pivoted to grocery delivery.¹⁸ Airlift operated a quick commerce service in eight Pakistani cities, including Lahore, Karachi, and Islamabad.²⁸ Users could order groceries, fresh produce, and other essential items, including medicines, from the Airlift website or app and have them delivered in 30 minutes.²⁸

Airlift operated more than 30 dark stores and processed hundreds of thousands of orders each month.⁸ Within the first 12 months of launch, Airlift reduced its cost of blended customer acquisition to $5 and unit costs to $2.50.⁸ In August 2021, Airlift raised $85 million in a Series B round at a valuation of $275 million, the largest for a Pakistani startup.¹²⁸ The round was co-led by Harry Stebbings of 20VC and Josh Buckley of Buckley Ventures.²⁸ The Series B brought Airlift's total funding to $110 million.⁴⁷⁸

Pakistan's then Prime Minister Imran Khan publicly congratulated the startup on its Series B funding.² Airlift was considered Pakistan's best shot at a unicorn.¹ Airlift began expanding to South Africa, a move that significantly increased its expenses.² In May 2022, Airlift announced a strategic realignment, laying off nearly one-third of its workforce and cutting operations from eight cities to three.¹ Airlift also shut its business in South Africa.¹

Airlift attempted to raise a new round earlier in 2022 via SAFE at a $500 million valuation.² Multiple investors told Airlift that it would take them over two months to wire the money, and other investors were unwilling to assume the risk of wiring ahead of others.² The round was ultimately unsuccessful.² Airlift was about three months away from operating profitability and about 6-9 months from company-level profitability as of July 2022.² On July 12, 2022, Airlift announced it would permanently shut down operations on July 13, 2022.¹²

The company cited the global recession and recent downturn in capital markets as having a devastating impact that rendered its shutdown inevitable.¹ Airlift said it would provide severance payments to employees in the next four to eight weeks and clear dues to suppliers and stakeholders.² Employees were told they were not required to come to work beyond July 12, and access revoke would run by end-of-day Thursday.² Airlift's shutdown sent shock waves through Pakistan's nascent startup ecosystem.² Kalsoom Lakhani, GP at i2i Ventures, expressed sadness for the people losing their jobs and worry that the failure would reflect poorly on Pakistan's entire startup ecosystem.²

Airlift founder Usman Gul wrote in a letter to staff that Airlift's success was viewed as a milestone for a burgeoning technology ecosystem in emerging markets.² Gul also wrote that the ecosystem would continue to thrive and that some of the most valuable technology companies in emerging markets are still yet to be started.² Airlift's shutdown was a defining moment for Pakistan's nascent startup ecosystem with far-reaching repercussions.⁴ As of November 2024, Airlift still held the title of Pakistan's most-funded VC-backed company, raising a total of $110 million.⁴ Airlift was the first startup from Pakistan to successfully launch asset-heavy operations outside of the MENA region in South Africa.⁴

At its peak, Airlift was doing $90 million in annualized revenue or about Rs.1.27 billion in monthly sales.⁴ Airlift's shrinkage rate was around 1.5%, better than the retail industry average of 2%.⁴ There were operational inefficiencies in procurement of fixed assets and a problem with arbitrageurs buying and reselling loss-leader products, but these were less than 1% of total sales.⁴ The founders had the same cars and lived in the same houses when Airlift shut down as prior to the company starting, and there was no visible sign of wealth or flashy objects.⁴ Airlift paid above-market salaries to attract top talent, but corporate payroll was a relatively small percentage of the overall cost base.⁴

Airlift raised the $85 million Series B by demonstrating leadership in the Pakistani quick-commerce market and planning for expansion beyond Pakistan.⁴ Investors expected the company to grow its valuation by 5-20x in the $1-5 billion range over the next 2-3 years.⁴ Airlift had to expand beyond Pakistan to justify a multi-billion dollar valuation.⁴ The company failed to secure further funding, and its operations came to a halt.⁴

Where the founders are now

Airlift founder Usman Gul confirmed the shutdown to TechCrunch and provided detailed notes about the events of recent months.² Gul wrote in a letter to staff that Airlift's success was viewed as a milestone for a burgeoning technology ecosystem in emerging markets.² The founders had the same cars and lived in the same houses when Airlift shut down as prior to the company starting, and there was no visible sign of wealth or flashy objects.⁴

Lessons, as others put them

"Founders need to seek the truth instead of merely validating their own assumptions."Qasar Younis, founder of Applied Intuition⁴

Sources

1. Pakistan’s e-commerce darling Airlift shuts down, Rest of World, 2022-07-12
2. Pakistan's top startup shutting down following funding crunch, TechCrunch, 2022-07-12
4. Why Airlift couldn't make it, alimehdi.substack.com, 1 year ago
6. Airlift Technologies Revenue, Valuation, Funding & Investors | Multiples, multiples.vc, Sep 18, 20
7. Airlift raises $85M in Series B Funding, now valued at $275M - COLABS blogpost, colabs.pk
8. Pakistan's Airlift raises $85 million for its quick commerce startup, eyes international expansion | TechCrunch, TechCrunch, 2021-08-18

How this case file was put together

Every statement on this page carries a numbered note, and every note points to a court record, a regulatory filing or a named publication in the list of sources. Each statement was checked against the text of the sources it cites before it was published: a figure, a date or a name the cited source does not contain was cut rather than kept. Allegations are shown as allegations, with their status at the time of the source (filed, charged, convicted, pleaded, settled, dismissed or pending). Quoted lessons are the words of the person or publication named with them, copied from the cited source; nothing here is our own opinion of why the company failed.

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