Airlift became one of the most successful q-commerce businesses in Pakistan. But, unfortunately, the business is about to shut down as it is not able to raise enough operational funds. The business had severe capital issues so Airlift announces a complete shutdown. According to reports, Airlift also tried to raise funds last week but that would have taken at least two months. The duration was too long for businesses to survive in a crisis.
Why Does Airlift Announces Complete Shutdown?
The company also informed the employees on Tuesday that the complete shutdown will occur on Wednesday. However, a proper closure takes a longer time. So, the reports are, “In the next 30 days, airlift will work on releasing severance and closing its liability stream to mark a complete shutdown of operations, the offboarding process has already started. The senior management was notified about it three days ago.”
As Airlift announces complete shutdown, it is a strong setback for the technological ecosystem in Pakistan. The decision has also affected many investors, employees, customers, and suppliers.
As a result of the ongoing economic recession in the country, Airlift continued to remain in the market because of its business planning and effective strategies. To cope with the recession, Airlift brought three options:
- An immediate reduction in headcount.
- Shutting down operations in all expansion markets.
- Revision in monetization strategies like raising prices and delivery charges.
In response to these strategies, Airlift did well in reducing financial burn by 66%, maintaining reasonable scale and reaching order-level profitability. Airlift could have attained positive cash flow within three months. While the Free Cash Flow was just 6-9 months away.
As an outcome of the above strategies, Airlfit created a trust among the investors to invest in Airlift Seies C1 financing. According to the reports, ” 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 sizable checks.”
The round seemed to be successful. In the beginning of July, all the investors were ready to sign the investment contracts. But, the global economic uncertainty caused a distubrnace among the investors. So, the capital requirements could not be met. While further explaining, the company’s representatives said that they could not leave their employees unpaid. After having several meetings, the Board finally decided for a complete closure. Thus, on July 7, the management decided that Airlift would shut down all its operations.
For liabilities, the company has declared that the suppliers, vendors and all the third-party members will be paid off all their liabilities towards the company. For this shutdown programme, Airlift is making sure that no one’s stakes are harmed.
Furthermore, Airlift will also make sure that the employees are protected. The company will manage to give the pays of July and August. Also, it will stay in contact with the supporting entrepreneurs to promote them to join further ventures.