Lahore-based eight-month-old transportation startup Airlift has raised $2.2 million in a seed round, Airlift’s co-founder and CEO Usman Gul, revealed in a conversation with MENAbytes on Monday, saying that the round was co-led by one of Pakistan’s largest conglomerates Fatima Group (through its VC arm). Fatima Gobi Ventures, a $20 million joint-fund recently established by the Fatima Group and China’s Gobi Partners, co-led the round with Indus Valley Capital, a Pakistan-focused VC founded by former LinkedIn executive Aatif Awan. It is the first disclosed investment by both Fatima Gobi Partners and Indus Valley Capital, and according to our data, is the largest-ever seed round raised by a startup in Pakistan.
The round that was also joined by many leading local individual investors including Yasser Bashir, Abbas Yousafzai, Shoaib Malik, Yusuf Jan, Jamil Goheer, Adil Ajmal, Ali Cheema, Saurav Ray, was initiated by Tony Xu, the founder and CEO of DoorDash, one of the largest food delivery companies in the world that was valued at $12.6 billion in its most recent funding round.
Usman, who previously worked with DoorDash, dropped out of his MBA program (at Insead) to start Airlift earlier this year with Awaab Khaakwany, Meher Farrukh, Muhammad Owais, Zohaib Ali and Ahmed Ayub, a Pakistani entrepreneur who has previously founded and led different local and international companies in Pakistan.
Airlift labels itself as an alternative to Uber, Careem and public transportation, allowing users to book rides on premium quality (air-conditioned) buses (and vans) that have fixed routes, stops and times, in Lahore and Karachi. The users after signing up and logging in, can reserve their seats by selecting their pick up and drop off locations or browsing the routes. Airlift’s mobile app that’s available for both Android and iOS allows users to track the buses in real-time and make payments as well using their credit or debit cards (the users have the option to pay by cash too when they board the bus).
In their own words, Airlift is building mass transit infrastructure for the developing world, “With a marketplace model, our technology helps organize private bus operators to run fixed routes at fixed timings. For transporters, Airlift offers a way to increase asset utilization by running their buses during idle time. For consumers, Airlift reduces both commute time and cost. Airlift’s proprietary dynamic stops technology lies at the heart of our marketplace.”
Usman told us that they’re currently doing tens of thousands of riders per week and have a network of hundreds of buses that are currently operating with them.
The startup now faces competition from Cairo-headquartered Swvl that recently expanded to Lahore and has plans to expand to Karachi as well. Airlift is clearly the market leader (for now at least) with tens of routes and hundreds of buses in Lahore and Karachi. Swvl until last week had three routes in Lahore.
The Egyptian startup that’s backed by some of the leading global and regional investors has all the resources to change things but Airlift is not worried about the competition. They’re, in fact, already thinking about their international expansion.
Usman told MENAbytes that they’re currently looking at different markets for potential expansion including Dhaka (Bangladesh) and Nairobi (Kenya). Coincidentally, Nairobi was that first city (outside of Egypt) that Swvl had expanded to.
Airlift’s initial good run and popularity haven’t gone unnoticed by the ride-hailing giants, some of which have tried to acquire the company, according to Usman.
“We have received multiple acquisition offers from ride-hailing giants but we are currently not actively seeking acquisition or exit options. Our vision is to build the mass transit infrastructure of the developing world, starting with Lahore and Karachi,” said Usman in a conversation with MENAbytes, without disclosing further details about those offers.
Update – Aug 7, 2019 – 6:45 AM: The story was updated to reflect that the investment made by Fatima Group and Gobi Partners was through their newly launched join-fund Fatima Gobi Ventures.