Airlift raises $85mln, a record for startups in Pakistan

KARACHI: Airlift Technologies Pvt. has scored the largest single private funding round in Pakistan’s history ahead of plans to enter overseas markets, as the country begins to join a regional startup financing boom.

“Airlift is announcing an $85 Million Series B financing led by some of the most iconic investors on the globe,” the company said in a statement on Wednesday. “Airlift's $85 million Series B financing marks the largest in the MENA region.”

The Lahore-based online shopping delivery firm raised $85 million in Series B financing co-led by Harry Stebbings from 20VC and Josh Buckley from Buckley Ventures Ltd., with participation from former Y Combinator president Sam Altman. That would be the largest-ever round for a Pakistani startup, according to a data tracker from venture capitalist fund Invest2Innovate.

The company said the financing is about twice the size of the largest private company IPO in Pakistan’s history and the highest in the MENA region, bringing a number of implications for the country.

The statement said Airlift Express alone with its series B funding of $85 Million has added 5 percent to Pakistan’s FDI for the Fiscal year 2021. “This financing round lays the foundations of a new dawn in Pakistan where technology startups alone can contribute to more than 10 percent of FDI in the upcoming years.”

Pakistan is “in the very early stages, but the transformation is happening very, very quickly and we are seeing a shift in behavior,” Airlift co-founder Usman Gul said in an interview. “We have a lot of people who previously didn’t shop online.”

The investment in Pakistan, a country of more than 200 million people — the world’s fifth-most populous — with a fledgling tech industry, mirrors a wave of investment across the border in India.

Pakistani startups, the bulk of which are focused on e-commerce, raised a record $101 million in the first half of this year compared with $66 million in all of 2020, according to Invest2Innovate data.

That’s still dwarfed by its neighbor, where technology startups scored a record $6.3 billion in the second quarter. For Airlift, the funding comes after the company pivoted around September into e-commerce with 30-minute shipments after the pandemic halted their main business — selling air-conditioned bus rides.

It enters a space that’s hotly competitive around the world, where grocers and e-commerce startups like Dunzo, Gorillas, Getir, and Gopuff battle to provide swift deliveries across traffic-clogged cities from Delhi to New York and London.

Airlift’s fund raise is equal to the entire amount raised by Pakistani startups in the first half of the year. It also eclipses the largest initial public offering by the nation’s private sector, according to data compiled by Bloomberg.

It now plans to expand its operations to 15 Pakistani cities by end of the year, up from a current eight. It’s also in the middle of a hiring spree with plans to double its core workforce to 400 by the end of next year, Gul said. The company is looking to enter an overseas developing market in about three months.

“Very quickly we realized that the distribution of consumer goods was quite broken,” he said. “I ordered groceries and had to wait six hours to get that delivery. So we wanted to change that.”