Pakistan’s top-performing startup, Airlift, has permanently shut operations in the country after day-to-day running finances dried up and an attempt to raise fresh funds failed last week.
Airlift said in a statement that on July 12, Airlift’s operations will shut down permanently. It further stated: “While the global recession and recent downturn in capital markets have affected economic activity across the board, it has had a devastating impact on Airlift and rendered its shutdown inevitable.”
It stopped operations at a distance of three months before reporting an operating profit (positive cash flow from operations) and six to nine months before posting a net profit (free cash flow), the company said.
Earlier, the startup pulled out of a couple of expansion markets, cut jobs and increased delivery charges under a business restructuring strategy, but failed to survive in the end.
It was reported that in May, one of the investors stepped up to lead Airlift’s Series C1 financing.
“We’ve received tremendous support from the potential lead in opening doors to other investors to put together the round. First Round Capital, Indus Valley Capital, Buckley Ventures, 20VC and other investors agreed to participate in the round with sizeable cheques.”
In early July, Airlift had a clear path forward to close the funding round as the company pushed documents for signatures to all participating investors.
“Last week, amidst rapidly deteriorating conditions in the global economy, several participants shared uncertainty in wire schedules and their disbursements – this ultimately meant that the company’s capital requirements would not be met. Ultimately, the round was unsuccessful,” Airlift said. “With the clarity, a complete shutdown was inevitable.”
Earlier, with the onset of the recession, Airlift was one of the first few companies in the emerging markets to restructure business operations – its response code included three adaptations an immediate reduction in headcount, shutting down operations across all expansion markets, and revision in platform configurations to ramp up monetisation (i.e. introduction of higher prices and delivery fee).
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