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How to blow $85 million in 11 months: The inside story of Airlift’s crash

How to blow $85 million in 11 months: The inside story of Airlift’s crash

Omer Aamir Raja, a young marketing manager from Islamabad, walked into Airlift’s office in Karachi’s buzzing Fortune Tower, not knowing what to expect. It was December 2021, and he had just moved to the country’s commercial capital with his wife, who was pregnant with their first child. He was set to start work at the country’s most valued startup, which was a prime candidate to become Pakistan’s first unicorn.

Just four months earlier, Airlift — a three-year-old instant grocery delivery startup — had raised $85 million in the largest funding round Pakistan had ever seen, at a record valuation of $275 million. In total, Airlift had raised over $110 million, becoming the most-funded startup in Pakistan. Flush with cash, the company was expanding at a rapid pace, luring talented professionals out of their jobs at safe, stale bureaucratic companies. In addition to eight Pakistani cities, Airlift had launched in three South African cities: Cape Town, Johannesburg, and Pretoria.

Despite Airlift’s newfound fame, Raja didn’t really know much about the company. He told Rest of World that he was preoccupied with becoming a father, and had mostly taken the job of a creative manager because of the lucrative compensation. His base salary was set at 150,000 rupees a month (around $920 at the time) with a performance-based bonus and a $10,000 equity option — a significant package in a country where corporate salaries average under 100,000 rupees. In addition, Airlift offered generous benefits. After the birth of his daughter, the company offered to foot the medical bill after insurance for the baby’s delivery — around 200,000 rupees — as a gift to the new father.  

“I walked into the office and it was lit up like it was designed for some Gen Z-er,” Raja recalled of his first day. The office, situated in a high-rise on a bustling main street, was designed with an open plan: communal tables with ergonomic chairs and glass-walled conference rooms. “There were beanbags, a coffee machine on one side, and loads of snacks for everyone,” said Raja.

His onboarding gift box included a pen, a mug, and a water bottle, all customized with his name. In a country where many offices still use clunky desktop PCs, Airlift gave Raja a brand-new MacBook. “I tried figuring out where I was supposed to sit but they told me it was cool — I could sit wherever I wanted,” Raja recalled. Even Usman Gul, the 33-year-old co-founder, CEO, and face of the company, didn’t have a designated office. 

In the week he joined, Raja was told that Gul would be coming to the Karachi office for a visit. Raja dressed smartly on the day, only to find Gul casually sitting on a beanbag in the game room, playing a PS4.

Then, in May, just nine months after Airlift had raised that massive series B round, and five months after he had started the job, Raja was among the 31% of the workforce that was laid off as part of a “strategic realignment.” In June, Gul told Rest of World that the business reorganization would help Airlift tide over the global funding crunch. “With the recession, we’re hearing about companies that are not making it … but the reason that I think we’ve been able to navigate it is that we’ve acted with conviction,” Gul had said.

On July 12, 2022, Airlift sent shock waves across the Pakistani startup community as it announced that it was shutting down permanently. The company’s investors had pulled out of a fresh funding round, and around 300 corporate employees, and thousands of warehouse and delivery staff, were jobless overnight.

“I walked into the office and it was lit up like it was designed for some Gen Z-er.”

In late August, Gul spoke with Rest of World in his first media interaction since the shutdown. He was at the erstwhile company headquarters in Lahore, along with a handful of devoted ex-employees, dismantling whatever was left of the company they built. Across Pakistan, Airlift’s warehouses with millions of rupees worth of inventory — rooms with endless racks of baby formula, lentils, and potato chips — were being liquidated and handed over to creditors. The beloved game room in the Karachi office, that once had a PS4, had been cleared out.

“I think if the lens of change is ‘Did Airlift deliver high returns to investors?’, then yes, unfortunately, it was unsuccessful. If you’re talking about changing an entire ecosystem — ushering Pakistan into a new reality — then, by that barometer of success, we came a long way,” Gul told Rest of World. “In many ways, Airlift raised the bar of ambition for Pakistani startups in a big way. Our teams at Airlift redefined the standard of execution, strategy, building a world-class culture, developing a cutting-edge product, raising sizable fundraising rounds.”

How did Pakistan’s flagship startup, advertised and sold as the nation’s best shot at a unicorn, implode into nothing over the course of a single year? What is the value of raising the largest series B in the country if the company goes bankrupt 11 months later? When asked about the $85 million that Airlift burned through in less than a year, Gul insisted that these were the wrong questions to ask. Instead, he defended, the right questions were: “What enabled Airlift to raise $100 million-plus in three years? That’s never happened in Pakistan before. What did this team do differently?”

Interviews with more than 15 former Airlift employees depict a company torn in two: Inside Airlift’s corporate offices, young workers who were experiencing the highs of belonging to the most-celebrated startup in the country, rallied behind Airlift as it went all guns blazing on a path of unbridled growth; meanwhile, the company’s operations staff, responsible for executing the ambitions of Airlift’s amateur leadership, were allegedly neck-deep in chaos: inventory mismanagement, pricing inefficiencies, and fraud were rampant. Eventually, the growth-at-all-costs model became untenable, and collapsed.

“It felt like they were doing it all for valuation because there was no way that they could have ever thought of becoming profitable like this,” a former warehouse manager from Lahore, who had previously worked for a number of large Pakistani corporations, told Rest of World. “It didn’t make sense.”


Airlift was founded in 2019 by Usman Gul and five others as a mass transit service. In early 2020, as the Covid-19 pandemic hit, the company pivoted to an instant grocery delivery model. On the back of the success that instant delivery had seen in other markets, including neighboring India, Airlift raised its landmark series B round. 

At the time, around a year after raising series A, the company was claiming a 30-50% monthly growth rate. The pandemic saw a venture-funding boom in emerging markets and Airlift, which had only been operating in quick commerce for around a year, was marketed as the best of Pakistani startups. Series B, co-led by podcaster Harry Stebbings and Josh Buckley from Buckley Ventures, brought a number of high-profile international investors to the table, further catapulting Airlift into the spotlight with the promise that it would continue its recent pattern of rapid expansion.

Many of the former Airlift employees who spoke to Rest of World said that working at the company was unlike anything they had ever experienced in Pakistan, where work culture is often defined by rigid hierarchies and a lethargic, bureaucratic mood. Besides generous compensation and free lunches, the company allowed flexible schedules. You had to send Google Calendar invites to request 10-minute chats — otherwise, you weren’t meant to disturb or be disturbed.

The company had a clear sense of mission — their goal wasn’t transport or groceries, but to have an “impact” on the country — and employees reported feeling like crusaders of a new economy. The company was brimming with the country’s brightest 20-somethings: fresh graduates from Pakistan’s top universities who appreciated Airlift’s modern approach to work.

“I really fell in love with the people and with their vision,” a former project manager at Airlift’s Lahore headquarters told Rest of World. “It was all about respect … and Gul, he inspires you, right? He’s so down to earth. He’s so humble, and he’s so, so smart.”

Another former employee said to Rest of World, “Gul was probably the best operator I’ve worked with in my career: his consistency, his discipline, his speed, his bias to action were just completely unheard of.”

“We didn’t expand in weeks or months, but in days.”

With millions in the bank, many former employees said, the company gave workers the ability to make significant financial decisions on their own. “It was very easy to get new subscriptions online and get into contracts with a company. Like there was little to no control,” one former employee, who worked in the product department at the Lahore headquarters, told Rest of World. “We had a lot of power to make decisions — like, I made a deal for $100,000 and all I had to do was send an email to management,” the employee said.

After raising the bumper series B round, Airlift rapidly expanded its delivery network, opening multiple new warehouses in each city. This was critical for its 30-minute grocery delivery model, which had never been done in Pakistan before. At least five former employees who spoke to Rest of World say that this rapid expansion came at a hefty cost and was not executed properly — ultimately contributing to the company’s unraveling.

A warehouse in Islamabad, for instance, could cost the company 1.7 million rupees (around $10,430 at the time) in average monthly rental and around 1 million rupees in monthly electricity bills, said a former employee who provided Rest of World with the receipts to back up these estimates. 

“We didn’t expand in weeks or months, but in days. In three months, there were 23 [total] warehouses in Lahore and every warehouse had 20 to 30 million inventory,” a former warehouse manager told Rest of World. According to several former employees from the operations team, it took as few as eight days for Airlift to set up a new warehouse.

Some employees told Rest of World that the rapid expansion of warehouses was excessive and unnecessary. “It just made no sense, they were expanding for no reason. If an area had, for example, a 15,000 population why was there a need for three warehouses?” another former warehouse manager asked.

Inside these warehouses, there was a lack of essential business acumen, strategy, and vigilance in the way inventory was managed, according to six workers who were appointed at Airlift’s warehouses in Hyderabad, Lahore, Islamabad, and Karachi.

Ghulam Rabbani, a former dark store manager, recounted his time managing two warehouses in Hyderabad, where he often had to navigate sudden inventory surges caused by automated systems. Glitches in the system’s algorithm would trigger wildly wasteful shipments.

“There were … like 3,000, 4000 kilograms of lentil staples in our warehouses at one point,” he told Rest of World. In another instance, in Lahore, a different warehouse manager recalled receiving thousands of Coke bottles unprompted. He sent a flurry of calls, messages, and emails to Airlift headquarters to inform them that it would be impossible to sell the product before it expired, and suggested that they at least redistribute the stock between warehouses. But, he told Rest of World, he didn’t receive an answer. 

“You’d enter the warehouse in Karachi and it felt like you had entered a war zone.”

“Nearly all those thousands of Coke bottles expired and no one even seemed to care that there was such a loss or why it was happening,” he said. Another operations manager from Islamabad said he had to dispose of 150,000 rupees (around $920 at the time) worth of milk under similar circumstances.

Operations at the warehouse in Karachi, Pakistan’s most populous city with a population of 15 million, were “a hustle,” Rabbani said. “You’d enter the warehouse in Karachi and it felt like you had entered a war zone: you’d have riders screaming from one end asking for orders to get completed and managers shouting back from the opposite end.”

The divide, between Airlift employees sitting in the company’s gleaming headquarters, and those working in the warehouses, was stark. “Everyone [in management] was new, they were these youngsters who just stayed in their offices,” a lead warehouse manager told Rest of World. “Senior management was never in the warehouses and they just sat inside and did their meetings on Zoom, not bothering to check the issues in the warehouses, leaving the burden entirely on the live operations team.”

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Even outside the warehouses, the leadership team was overlooking other serious issues. For instance, as part of its business model, Airlift secured deals with suppliers to source goods below market rates and attracted customers by passing on the savings. But other retailers would often snap up Airlift’s inventory at the lower prices and resell it at a profit from their own stores. 

“Retailers kept trying to hack the system; they were a huge obstacle for us as their orders would manipulate our data,” said Rabbani. In a video shared with Rest of World by a warehouse employee, workers can be seen piling different flavors of Lay’s potato chips into five large trolleys, nearly emptying out the inventory shelves while fulfilling an order placed by another retailer.

The growth was so sudden that product management suffered and theft became an issue. A warehouse employee told Rest of World about an incident where electronic accessories worth 1 million rupees went missing from a Lahore warehouse. “Airlift had around about 80 … warehouses in Pakistan, so let’s imagine that if one warehouse had that level of pilferage, other warehouses had to face how much pilferage. There was pilferage everywhere,” the employee said.

“It was an organization with two years of experience [in quick delivery] and not the best systems in place and pilferage was definitely above industry benchmarks … but it was the cost of doing business,” a former warehouse operations manager confirmed to Rest of World. “There was too much fraudulent activity, especially in warehouses that were less utilized,” said an operations lead from Islamabad.

In an internal email to some employees, dated June 2021, that Airlift shared with Rest of World, Gul recognized these issues: “I think we need to spend less time on documents, emails, Slack, and sitting behind desks and more time on the front lines.” Basic issues such as “paint falling off, no labels whatsoever, unhygienic drainage, [the] complete absence of safety protocols” had to be addressed, he wrote.

Gul acknowledged that Airlift had a pilferage problem, but said that it was within industry standards. “For fast-moving grocery, best-in-class pilferage rates stand at about 1.5% of turnover in international markets. Airlift’s pilferage stood in the 1.5-2% range,” Gul told Rest of World. “We developed one of the most sophisticated remote surveillance networks with 30+ cameras in each warehouse that operated 24 hours/day.”


Still, in June 2022, the company’s leadership exuded confidence in the company’s future. When Gul spoke to Rest of World that month, he claimed that “Airlift was remarkably closer to profitability” and that the company’s “path to profitability is going to be infinitely faster and more straightforward than our peer group in the U.S. or the U.K.” Within the company, though, there were those who doubted Airlift would ever make money.

This path to profitability was set on unrealistic goals, a former member of the pricing team in the Lahore headquarters told Rest of World. “It became quite evident in some of the sessions that we used to attend that it was probably going to get very, very tough to become profitable and that was kind of the silent message that some of the leadership gave as well,” he said. “You would go to the co-founder and say that this target was impossible — that you simply cannot do it — and you in turn would get this motivational speech where they would say something like ‘if Amazon can do it, so can we.’” 

Some former employees told Rest of World that the pace of growth Airlift aspired to was unsustainable. “When we got that 85 million [dollars], everyone was really happy. We had a lot of celebrations and we had to start growing a lot,” the project manager said. “We had told investors that our share price was going to increase incredibly because we’re not just based in Pakistan but also in South Africa, and we’ll move into Egypt as well, and other markets … I think that we were trying to go too fast and something that somebody should aim for in the next 5 to 10 years, we were trying to do that in 2 to 3 years.”

In June, Gul told Rest of World that the South Africa expansion had been a way to diversify from the risks of operating in an emerging market. “There’s a lot of geopolitical stuff, there’s macroeconomic fluctuations, there’s a lot of fluidity in operating just in Pakistan,” Gul said. Although Gul said the South Africa launch was “frugal,” several former Airlift employees said the general impression inside the company was that the expansion came at a hefty price.

Either way, this ambitious move was the first to get axed when fears of a looming global recession surfaced. The “strategic realignment” in May included shutting the South Africa business down.

“Something that somebody should aim for in the next 5 to 10 years, we were trying to do that in 2 to 3 years.”

In 2022, global venture funding saw a dramatic drop of 27% as a reaction to a hike in interest rates, a crunch in the capital market, and a looming recession. For Pakistan, the macroeconomic impact has been particularly severe, with inflation reaching nearly 25% in July, the highest in 14 years. To add to the mix, Pakistan’s political landscape has been fraught, with former Prime Minister Imran Khan contesting his ousting from power.

In June, Gul told Rest of World that international expansion was tactically correct, and that the failure of Airlift in South Africa was entirely the result of unexpected macroeconomic conditions. “If we were to go back to December with all of our wisdom, but if we did not know the markets would turn, we would absolutely still launch South Africa, no question about it,” Gul had said. “It was the right decision, we were winning in South Africa.”

Zeshan Gondal, head of strategy at Zayn Capital, an investment firm that provides debt and equity financing to startups in Pakistan, told Rest of World, “The vast majority of startups will not make it to a successful exit … but on the flipside, when you raise so much money and the startup shuts down less than a year later, it calls into question the decision making that went behind expanding into new markets and the burn that was required to do that.”

In his recent conversation with Rest of World in August, Gul remained firm that the company’s failures were not the company’s fault. “Airlift’s demise was ultimately the result of an unsuccessful fundraise amidst a global recession — while there are broad critiques on things like operations and supply chain, the reality is that Airlift had particularly strong operation and financial metrics, something that was reflected in our quarterly shareholder updates.”

Since the shutdown, Gul has begun writing more on his blog, where he writes with the same tone in which he speaks: everything sounds like a pitch. In his posts, he also draws parallels between his journey at Airlift and that of global business titans. Gul told Rest of World that he’s been reading and taking insights from American businessman Sam Walton’s biography that chronicles how he founded and built Walmart, an over $400-billion company.

He is excited about his future. The top five investors in Airlift are still behind him, he claims. “A lot of those who lost significantly in Airlift are still saying, ‘When are you going to start something new? Can we be a part of it?’ This was one of the most common messages when we announced the shutdown with our investors. Many wrote to us saying, ‘Whatever your next thing is, count me in.’” 
In a blog post, Gul highlighted a quote from Walton’s biography: “It was the lowest point of my life. I felt sick to my stomach … I had built the best variety store in the whole region and worked hard in the community. I had done everything right and now I was being kicked out of town.”


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