From the Beginning to the End-How Airlift lost the Initial Race

From the Beginning to the End-How Airlift lost the Initial Race

From the beginning to the end-How Airlift lost the initial race

Pakistan is currently faced with a multitude of startups that have struck a wall because venture capitalists invest in the region in favor of the countries and industries which they consider less risky.

Among others that faced the outrage of the economic chaos is Airlift Technologies PVT – One of the most prominent startups in Pakistan – who collected a record of high funds a year earlier.

In early July, the founders prepare to raise more money for expansion; however, within a week, their plans failed.

It is noticeable that Airlift had raised $ 85 million a year earlier – a record for the country – and braked expenses to call on investors when they planned to work for a new round.

But then large funding resigned, leaving Airlift without capital to continue and forcing it to die shut down. As a result, the startup business collapsed underscoring how severe the global crush in technology assessment affects fragile startups in the developing market.

One of the founders of Airlift-Usman Gul said, “The whole team, including me, was surprised when the round was messy the last time. Airlift is not ready to shift sentiment in the capital markets. “

It was become difficult to convince investors to put their money by promising them healthy growth and progress towards profitability while the global economic slowdown and the fall in technology stocks have weighed on their investment decisions.

The 33-year-old man admitted that one of the company’s mistakes was not collecting more funds last year when the market was more profitable.

This year, due to uncertain economic conditions, the attention of investors has diverted from growth to earning potential, which put the business models of startups under a more intense examination.

To save their design, the owners have reduced a third of their employees, reduces the target size of the round, and lowered its assessments. However, things did not work in their favor.

Gul, without disclosing the name of the main investor said: “The Company had commitments it needed since it sent the final documents to investors on July 5. But only two days later, everything gets worse. The main supporter delayed sending money and wanted more investors to unite the funds together with it.

“Other investors ask for two to three months, quoting concerns of global recession and decline in the capital markets. Less than a week after negotiations, the company’s cash has dried up and the company has no choice but to end its business. “

He further added: “The biggest loss on our side is not to prioritize multi-stage institutional investors. You need multi-stage institutional investors, someone like Accel or Sequoia, who believes in the project and can write bigger checks. “

Airlift helped to highlight Pakistan with its record financing round which stood out during what turned out to be a year of escape for Pakistani startups – they have raised a record of more than $ 350 million in 2021.

However, the pace of fundraising has slowed down since then, which has prompted companies to curb their expansion plans. Vavacars supported by Vitol-left Pakistan, SWVL Holdings, based in Dubai, took a daily break in the country and Uber Technologies Inc. Unit Careem Inc. interrupted its food delivery activity.

“We intend to learn from this experience,” said Gul. “Market turnover is a reality that requires better planning and preparation on our side.”

From the beginning to the end-How Airlift lost the initial race