Recently discovered information on the now-defunct Airlift has provided light on the events that contributed to its closure.
After three years of operation and more than $100 million in financing, Airlift, the former bus-hailing business and the previous speedy commerce delivery firm, announced a total closure of operations on July 12 of this year. The business had stated that because of a worldwide funding shortage, which has caused entrepreneurs to turn their attention to self-reliance, investors had reneged on their agreements to support the startup.
Usman Gul, the company’s founder, stated in a recent report that “Airlift was not prepared for the shift in opinion in capital markets,” adding that one of the company’s blunders was not raising additional money last year when the markets were more favorable.
Gul’s statement, however, is not entirely accurate because Airlift was actively seeking investment last year; one of its founders even said that they had successfully raised $200 million.
“This year, investors’ attention has turned from growth toward earnings potential, bringing startups’ business models under intense scrutiny,” the Bloomberg report noted. “Airlift consequently laid off employees and rolled back operations in South Africa as well as in smaller cities in Pakistan to cut expenses, as it shifted focus from growth to sustainability.”
The article also states that the valuation and target size for the aforementioned round were also cut.
“The company appeared to have the commitments it needed as it sent the final documents to investors on July 5. But just two days later, things took a turn for the worse. The lead backer delayed sending the money, wanting more investors to wire funds together with it, Gul said, without revealing the main investor’s name,” the report read.
To read our blog on “During the current global recession, Airlift ceased its operations,” click here
