Fifteen former workers explain what went wrong at Pakistan’s first would-be unicorn and how they think it may be prevented in the future.
Young Islamabad marketing manager Omer Aamir Raja visited Airlift’s headquarters in Karachi’s bustling Fortune Tower. This was in December of 2021, and he and his expectant wife had just relocated to the country’s business metropolis. He was about to begin working for the most valuable company in Pakistan, which was widely considered to be the country’s best hope for creating the country’s first unicorn.
Airlift, an instant grocery delivery service that has been around for three years, received $85 million at a record value of $275 million only four months ago, making it the biggest fundraising round in Pakistan’s history. After raising over $110 million, Airlift was the best-funded company in Pakistan. The firm was flush with cash and developing rapidly, attracting skilled experts away from stable, bureaucratic organizations. The airlift was first introduced in Cape Town, Johannesburg, and Pretoria in South Africa, in addition to the aforementioned eight cities in Pakistan.
Raja knew very little about Airlift, despite the company’s recent success. He said to the Outside World that he was expecting a child and that the main reason he accepted the position of creative manager was due to the high salary. In a nation where the typical corporate income is under 100,000 rupees per month, his starting salary of 150,000 rupees per month (about $920 at the time) was a substantial deal.
Furthermore, Airlift provided competitive benefits packages. The employer wanted to show their appreciation for the new dad by covering the remaining medical costs (approximately 200,000 rupees) associated with the delivery of their daughter. On his first day, Raja said, “I stepped inside the workplace, and everything was lighted up like it was made for some Gen Z-er.” The high-rise office building was located on a busy main thoroughfare, and it featured an open floor plan with ergonomic communal tables and glass partitioned meeting rooms.
When asked about the amenities, Raja remarked, “There were beanbags, a coffee machine off to the side, and enough refreshments for everyone.”
The engraved pen, ceramic cup, and plastic water bottle in his welcome package were all bearing his name. Airlift presented Raja with a fresh new MacBook in a nation where many workplaces still utilize bulky desktop PCs. When Raja asked where he should sit, the others assured him that any available seat was OK with them.
Usman Gul, the company’s 33-year-old co-founder, CEO, and public face, worked out of a shared space. As Raja was starting his new job, he learned that Gul would be stopping by the Karachi branch that week. Raja put forth an effort to seem presentable, but he saw Gul playing a PS4 on a beanbag chair in the gaming room.
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 the Rest of the 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.
In late August, Gul spoke with the Rest of the 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, which 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 the Rest of the 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, and strategy, building a world-class culture, developing a cutting-edge product, and 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.”
In 2019, Usman Gul and five others established Airlift as a means of public transportation. The corporation shifted to a concept based on immediate grocery delivery in early 2020 as the Covid-19 outbreak took hold. The airlift was able to obtain a record-breaking series B round of funding because of the popularity of same-day shipping in other countries, like as India.
About a year after their series A funding round, the firm said that they were seeing 30%-50% monthly growth. After the epidemic, venture capital financing increased in developing countries, and Airlift, which had been in business for just about a year, was promoted as the most successful of Pakistan’s startups. Co-led by podcaster Harry Stebbings and Josh Buckley of Buckley Ventures, Series B funding brought in a slew of well-known international investors and propelled Airlift into the limelight with the promise of further fast growth.
According to Rest of World’s interviews with many former Airlift workers, working there was unlike anything they had ever encountered in Pakistan, where the work atmosphere is frequently characterized by tight hierarchies and a languid, bureaucratic tone. The corporation provided not just great pay and complimentary meals but also scheduling flexibility. You were not supposed to interrupt or be interrupted unless you sent a Google Calendar to invite requesting a 10-minute discussion.
Employees said they felt like crusaders of a new economy because the organization had a distinct sense of purpose; their objective was just to provide transportation or food but to make an “effect” on the nation. The airlift was teeming with Pakistan’s finest twentysomethings, many of whom had just graduated from the country’s most prestigious educational institutions and were drawn to the firm for its forward-thinking approach to the workplace.
A former project manager at Airlift’s Lahore headquarters told Rest of the World, “I genuinely fell in love with the people and with their goal.” It was a matter of mutual respect, after all… I mean, he must motivate you, Gul. How humble he is. He’s really modest for how brilliant he is. “Gul was perhaps the finest operator I’ve worked with in my career; his consistency, discipline, quickness, and predisposition to action were simply absolutely unheard of,” a former colleague told Rest of World.
“We grew rapidly, in a matter of days rather than weeks or months.”
They had millions in the bank, so staff could make big financial choices on their own, so the story goes, at least according to some former employees. Signing up for new subscriptions and entering into agreements with a corporation was a breeze on the Internet. “It seemed like there was little to no control,” a former employee in the product department at the Lahore headquarters told Rest of World.
A former worker described how “we had a lot of ability to make choices” at their company. “For example, I struck a transaction for $100,000 and all I had to do was send an email to management,” the former worker stated. Airlift quickly expanded its distribution network after funding the blockbuster series B round, building many additional warehouses in each location. They needed this in order to implement their groundbreaking 30-minute grocery delivery business in Pakistan. At least five former workers told Rest of World that the company’s demise may be attributed, in part, to the quick growth, which came at a high cost and was poorly implemented.
According to a former worker who provided Rest of World with receipts to back up these estimates, the average monthly rental for a warehouse in Islamabad could cost the company 1.7 million rupees (roughly $10,430 at the time), and the average monthly electricity bills could cost the company around 1 million rupees
. We grew rapidly, not over the course of months or even weeks, but in a matter of days. One former warehouse manager in Lahore said to the Rest of the World, “In three months, there were 23 [total] warehouses in Lahore, and every warehouse had 20 to 30 million inventory.” Several former members of Airlift’s operations team have said that a new warehouse may be up and running in as little as eight days.
Many workers have complained to the Rest of the World about the excessive and needless warehouse development. It was completely illogical that they would grow for no apparent reason. One former warehouse manager questioned the necessity for three facilities serving a community of, say, 15,000.
Six employees at Airlift’s warehouses in Hyderabad, Lahore, Islamabad, and Karachi reported a lack of fundamental business knowledge, strategy, and attentiveness when it came to the management of inventory. A former dark shop manager named Ghulam Rabbani spoke about his stint overseeing two warehouses in Hyderabad, where he often dealt with unexpected inventory increases brought on by automated technology. In the event of an algorithmic failure, the system would initiate very inefficient distributions.
He revealed to the rest of the world that they had had “like 3,000, 4000 kg of lentil staples in our storage at one time.” Another warehouse manager in Lahore recounted getting hundreds of Coke bottles delivered to the facility without asking. He contacted Airlift many times through phone, text, and email to break the news that the inventory couldn’t be sold before its expiration date and to propose restocking other warehouses.
However, he said to the rest of the world, “I got no response.” The majority of the hundreds of Coke bottles were expired, he continued, and nobody appeared to mind or wonder why. Another Islamabad-based operations manager shared a similar story, saying he had to unload milk worth 150,000 rupees (about $920) under identical conditions.
Rabbani described the warehouse’s operations in Karachi, Pakistan’s most populated metropolis with 15 million people, as “a hustle.” Riders would scream from one end of the warehouse in Karachi demanding that orders be fulfilled, and management would yell back at them from the other end. There was a clear socioeconomic disparity between the office workers at Airlift’s headquarters and those in the warehouses.
A senior warehouse manager said to Rest of World, “Everyone [in management] was new, they were these teenagers who simply sat at their desks.” When problems arose in the warehouses, the live operations team had to deal with them on their own since “senior management was never in the warehouses and they simply sat inside and had their meetings on Zoom.”
The management group was ignoring problems outside of the storage areas as well. Airlift, as an example, built its business strategy on striking arrangements with suppliers to acquire items at prices below market and then passing those savings on to the company’s clients.
However, other shops would quickly buy up Airlift’s surplus at discounted rates and resale it at a profit. “Retailers were a significant challenge for us since their orders would distort our data,” Rabbani stated. A warehouse worker shared a video with the rest of the world showing employees loaded five huge carts to the brim with various types of Lay’s potato chips to satisfy an order from another shop.
The rapid expansion caused problems with product management and theft. A worker at the Lahore warehouse where the stolen goods were stored informed the Rest of the World that electrical accessories worth 1 million rupees were among the items taken. Let’s assume that if one of Airlift’s 80… warehouses in Pakistan had such high levels of theft, the others must have also been hit hard. The worker said that theft occurred “all over the place.
The company “had two years of experience [in speedy delivery] but did not have the greatest controls in place, and pilferage was certainly above industry norms… An ex-warehouse operations manager verified to the Rest of the World that this was just the price of doing business. Especially in underutilized facilities, “there was too much fraudulent activity,” a top operations manager in Islamabad told me.
Airlift shared with the Rest of the World a June 2021 email from Gul to select staff in which he acknowledged these problems: “I believe we need to spend less time on documentation, emails, Slack, and sitting behind desks and more time on the front lines.” Even fundamental problems like “paint coming off,” “no labeling whatsoever,” “unhygienic drainage,” and “the utter lack of safety measures” needed to be fixed, he noted.
Gul admitted that there was a theft issue at Airlift, but he said that it was typical for the business. Best-in-class pilferage rates for fast-moving groceries in international marketplaces are about 1.5% of turnover. According to what Gul informed the rest of the world, the amount of theft from the airlift was between 1.5 and 2%. With over 30 cameras in each warehouse, our remote monitoring system is one of the most advanced in the world.
However, in June of 2022, the company’s leadership was optimistic about the company’s prospects. During an interview that month with Rest of World, Gul boasted, “Airlift was substantially closer to profitability” and that the company’s “road to profitability is going to be enormously quicker and more clear than our peer group in the U.S. or the UK.” Yet, there were skeptics even among the company’s ranks who didn’t believe Airlift would succeed financially.
According to a former member of the pricing team at the Lahore headquarters, these targets for profitability were never achievable. It was “pretty clear in some of the meetings that we used to attend that it was probably going to grow very, very challenging to become profitable,” he said, adding that this was also the “quiet message” sent by those in leadership. When you told the company’s founder that meeting the goal was impossible, they would give you a pep talk along the lines of “if Amazon can do it, so can we.”
Some of Airlift’s former workers warned the Rest of the World that the company’s rapid expansion plans were doomed to fail. There was widespread elation when the sum of $85 million was finally secured. “We had a lot of parties and we had to start expanding rapidly,” the project manager remarked. Because we have offices in Pakistan, South Africa, and soon Egypt and other markets, we assured investors that our stock would rise dramatically. We were aiming to accomplish in two to three years what I believe someone should strive for in the following five to ten years.
When asked by Rest of World in June why he had decided to expand to South Africa, Gul said it was to spread out the company’s exposure to the risks associated with doing business in an emerging market. A lot of “geopolitical stuff,” “macroeconomic fluctuations,” and “a lot of fluidity in operating just in Pakistan,” Gul said. Despite Gul’s claims that the launch in South Africa was “frugal,” several former Airlift employees have said that the internal consensus is that the expansion was expensive.
Regardless, this bold action was the first to be scrapped when concerns about a worldwide recession emerged. As part of a “strategic restructuring” in May, the company’s operations in South Africa were ended.
As a result of rising interest rates, a tightening of the financial market, and an impending recession, worldwide venture financing plummeted by 27% in 2022. Inflation in Pakistan hit about 25% in July, the highest level in 14 years, illustrating the severity of the macroeconomic effect. As if that weren’t enough, Pakistan’s political climate has been tense lately due to former prime minister Imran Khan’s legal challenge to his resignation.
Back in June, Gul reassured the rest of the world that his plans to expand internationally were strategic successes and that Airlift’s failure in South Africa was due only to unforeseen macroeconomic factors. Gul has previously said, “If we were to go back to December with all of our expertise, but if we did not know the markets would change, certainly still launch South Africa, no question.” We were dominating in South Africa, so it was the proper call.
Head of the strategy at a Pakistani investment business that offers loan and equity funding to startups, Zeshan Gondal, told the Rest of the World, “The great majority of companies will not make it to a successful exit… However, when a startup raises a large sum of money and then closes down within a year, investors may begin to doubt the wisdom of the company’s strategy of “burn” (or expansion into other areas).
Gul maintained his position in a recent interview with Rest of World in August that the company’s failings were not the company’s responsibility. While there are widespread criticisms of Airlift’s operations and supply chain, the reality is that Airlift had particularly strong operational and financial metrics, as reflected in our quarterly shareholder updates, and the company’s demise was the result of unsuccessful fundraising during a global recession.
After the closure, Gul started blogging more often, and his posts had the same sales tone as his regular conversations. He compares his experience at Airlift to those of well-known businesspeople all throughout the world in his writings. Gul revealed to the Rest of the World that he had been studying the biography of American billionaire Sam Walton, which details the history of how Walton created Walmart, a corporation worth over $400 billion.
He has high hopes for the future. He states that the top five Airlift investors still support him. Those who had major setbacks during Airlift have asked repeatedly, “When are you going to start anything new? Do you want us to join? When we informed our investors of the stoppage, this was one of the most often heard comments. We had a lot of people tell us, “Whatever your next project is, consider me in.”
Gul quoted Walton’s biography in a recent blog post: The bottom had officially dropped out of my life. It made me feel nauseous, so… I put a lot of time and effort into the neighborhood, and the result was the greatest variety shop in the area. I felt like I’d done everything by the book, and now I was being evicted.
