ISLAMABAD: After the closure of Airlift – Pakistan’s e-commerce startup — many discouraging arguments about Pakistani startup industry have been circulating.
Airlift’s shutdown was seen as a move that sent shockwaves to the nascent industry in Pakistan. The Lahore-headquartered startup told employees that it will permanently cease operations in Pakistan. The startup had raised $85 million in the country’s largest Series-B funding round in August 2021 at a valuation of $275 million, the highest for any Pakistani startup.
According to experts, there is still a huge potential and space for Pakistani startup industry in the market. Experts say that a startup is run by its founders, not by investors. The startups that always look for venture capital (VC) can’t travel an extra mile.
Mohsin Rehman, Chief Executive Officer (CEO) of Pakistani e-commerce startup Dukan, said he was a small shareholder in Airlift. He said he was sure Pakistan will see many of such startups again doing great things in the country.
Mohsin claimed that Airlift was not Pakistan’s “top” startup as depicted in the media.
“There are many amazing startups in Pakistan that have made their mark, proven their business models, and had positive unit economics,” he said. The CEO of Dukan said startups fail regularly globally, not just in Pakistan. “It is absurd to imply that Airlift’s closure has consequences for the entire ecosystem,” he remarked.
“Everyone is going through a tough time right now. We will get through it. There will be more closures and layoffs. We have just begun in a $250 billion economy with 220 million people, 80% among them are adults who use mobile broadband,” he pointed out.
Mohsin suggested that a business strategy needs to be adopted according to the needs of time.
“We are in a capital forced economy at the moment. Unit economics must work and growth must be balanced with the availability of capital to absorb it,” he suggested.
He said that startups are failing globally, and pinning the future of all startups in Pakistan on Airlift’s fate is illogical. “We, at least, must not be part of pushing discouraging narratives,” he said.
Khurram Mehmood, an entrepreneur and financial adviser, told WealthPK that a business valuation is just a number that investors have agreed upon.
“It is not proper to call a company ‘top startup’ based purely on the money it raised and how investors agreed to value it. Is there a better way to value startups? It can’t be profits as startups are heavily investing and not making profits. Here it becomes highly subjective, hence the risk of over or under valuation,” Khurram said.
–INP
