In August 2021, Airlift secured $85 million in funding — the largest deal in Pakistan’s start-up history. The company, which began as a mass-transit service before shifting to instant grocery delivery, became a symbol of the country’s growing tech ambitions. At its peak, it operated in multiple cities and employed thousands.
But by July 2022, Airlift had shut down. The company cited global economic pressures, a drop in venture capital, and a failed funding round. Its collapse sent shockwaves through Pakistan’s emerging tech ecosystem. It wasn’t alone. Other promising start-ups, including EasyTickets and Foodpanda’s quick-commerce ventures, also faltered as investor interest faded.
Even international players have struggled. Careem, which revolutionized ride-hailing and digital payments in Pakistan, suspended its services in July 2025 after nearly a decade. Soaring inflation, fierce competition from lower-cost rivals, and shrinking investor confidence contributed to its exit.
These high-profile failures point to deeper issues: overhyped ideas, unsustainable business models, and a lack of structural support. According to the Pakistan Start-Up Ecosystem Report 2024, more than 80% of start-ups close within their first three years. Investment fell sharply from nearly $360 million in 2021 to just $70 million in 2023.
Syed Azfar Hussain of Karachi’s National Incubation Centre says many founders build products no one is willing to pay for. “They get attached to their idea and forget to ask whether it solves a real problem,” he explains. Saba Kalsoom of Invest2Innovate adds that shutdowns often result from an inability to raise more funding, misalignment with the market, or founder burnout.
The emotional toll is significant. Shahzad Mahdi, an entrepreneur from Skardu, launched a venture selling pure shilajit—a traditional herbal extract. Despite investing in quality packaging and branding, he struggled to convince customers to pay a premium in a market used to cheaper, diluted versions. He stepped back after a year.
“We were never taught how to fall,” says organizational psychologist Qaiser Abbas. “When a start-up fails, it feels personal.” He encourages founders to see failure as a learning experience, not a final verdict.
Government and private programs have tried to bolster the ecosystem. The Punjab Information Technology Board claims its incubation initiatives have supported over 1,100 start-ups, generating Rs2.9 billion in revenue and creating more than 24,000 jobs. Co-working spaces have also grown, offering affordable workspaces and community support. There are now 449 such spaces across the country.
But survival is far from guaranteed. Muhammad Hasnain, who managed a regional incubation program, estimates that 60–70% of start-ups still fail due to weak ideas, lack of commitment, or delayed funding.
Policy recommendations include simplifying business registration, recognizing modern investment tools, and creating “regulatory sandboxes” where new ideas can be tested safely. Support for founders after failure—such as fellowship programs—is also urged.
Despite the challenges, there are signs of resilience. Najia Rizwan Syed, who runs a co-working space in Karachi, says the culture around failure is slowly changing. Founders who bounce back often stay connected to the ecosystem, remain open to feedback, and are willing to adapt.
The collapse of giants like Airlift and Careem was a blow to Pakistan’s tech aspirations. But the struggle to build a sustainable start-up culture continues—one where failure is seen not as an end, but as a step toward future success.
