- At IBA event, startup founders and corporate leaders discuss Pakistan's startup landscape
Ahmed Ayub, co-founder of Airlift Technologies, the startup that shut down recently, believes there is no such thing as failure, but only wins and lessons to draw from. He is hopeful of the future, convinced investors are still testing the waters in Pakistan right now and putting in small amounts, which will soon increase once the ecosystem evolves.
Airlift originally began as a mass transit public transport business, but the pandemic forced its hand to reinvent as a grocery delivery app. The darling of Pakistan's startup scene, responsible for the country's largest single private funding round in history, announced in July it is shutting down operations permanently, creating doubts whether the country's record fund-raising announcements were here to stay.
Speaking during an event on Thursday at the Institute of Business Administration (IBA) Karachi titled ‘Startup landscape in Pakistan, tales of failures and successes', Ayub said at the time the pandemic hit, Airlift was selling 40,000 tickets a day and it was heartbreaking to have to shut operations.
“But this doesn’t mean you become Devdas,” he joked, referring to the Indian cinema's character famous for having lost the love of his life.
Instead “you must reset yourself," he said.
Ayub said he believes that mass transit is still a “huge problem that needs to be solved” and “is there for the taking” should someone else want to enter the sector.
“Anyone who could read capital markets and understand what was happening on the Nasdaq knew in Q1 2022 where the world economy was headed and what was coming,” said Ayub.
He also believes the value-add of investor interest in Pakistan is not the dollar amount that’s coming in – Pakistan's startups have raised around $274 million during January-June 2022 – but the level of hope it brings youngsters.
And he also believes Airlift’s failure isn’t going to deter investors. He pointed out that just days after Airlift said it was shutting down, Pakistan's fintech Dbank announced that it has raised $17.6 million, backed by US-based Sequoia Capital.
“There are so many big players out there, you shouldn’t depend on just one, look beyond that,” he said, adding that “even last night the eleventh player hit sixes” (referring to the Pakistan-Afghanistan Asia Cup match).
One of the players will eventually get a big exit, he reassured the audience. "All big investors are sniffing around Pakistan."
A few million dollars is no big deal for them, and they will soon jump in with $50 million to $60 million because of success stories like Daraz and Careem, he said.
He also added that the sheer size of Pakistan’s population coupled with its smartphone penetration means it’s a market international venture capitalists cannot simply ignore.
He said that Airlift’s failure had some benefits. For instance, he said he got calls from companies wanting to move their software development from Ukraine and India to Pakistan, and use Airlift’s employees.
When asked if Airlift made the right decision to shut down and if it ran out of funding, Ayub was emphatic that the company discussed exit strategies and all possible angles.
If they are doing Silicon Valley jobs, why should they get ‘Pakistan’ salaries?: Ehsan Saya, managing director at Daraz
“We made the decision in the best interest of the larger group," he said, adding that because of the state of the world economy – capital drought, fall in crypto and the Russia-Ukraine conflict – even the biggest tech companies of the world have suffered and lost billions in value.
Commenting on Airlift’s alleged high salaries to employees that were said to exceed the country’s average, Ehsan Saya, managing director at e-commerce platform Daraz, said Airlift rightly awarded its talent.
“If they are doing Silicon Valley jobs, why should they get ‘Pakistan’ salaries?” he asked.
He said if he is hiring someone who used to work at Airlift he knows they have seen the rigours of working in the startup sector and learnt things in a short time that someone at a successful company may take years to understand.
Saya also talked about the upside to having an international investor like Alibaba – he said it allows Daraz to experiment without worrying if, in the process, a few thousand dollars are burnt.
“It is a luxury, the comfort of knowing that it’s okay to make mistakes,” he said, adding that when the company tries something new it makes decisions based on a granular level data, and is very specific from the start on what its KPIs are.
The audience at IBA also heard from Halima Iqbal, founder and CEO of fintech Oraan. She warned that there is a “glory” around funding that may create unnecessary pressures on entrepreneurs.
She said they must focus on solving the problem and let the funding be there as a support. Its also important to know when it’s the right time to go to a VC, she noted.
All panelists believed there is no time like the present for entrepreneurs to start building companies, as the country has a multitude of problems that need tech-enabled solutions with opportunities to create thousands of jobs.
For instance, Ayub said that the floods, devastating as they are, also create opportunities for entrepreneurs to get creative and make location-based services.
About the event
IBA Karachi organised the event as a discourse on the startup landscape in Pakistan. This was the third session conducted under the dialogue series ‘CEO Forum’, said a press release issued after the event.
The discussion was moderated by Dr Saima Husain, an assistant professor and Director Quality Enhancement Cell, who was in conversation with founders and corporate leaders, including Saya, Hamza Rauf, co-founder and director, Telemart, and Ayub.
Attendees included students, faculty, academicians, media personnel, business owners, and members from the corporate sector.