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Teardown | Airlift – Quick-Commerce Retailer
Riding the global quick-commerce wave to become Pakistan's highest funded startup in under 3 years
Founded in 2019, Airlift is an express grocery delivery service headquartered in Lahore, Pakistan. The company aims to deliver essentials in under 30 minutes across cities in Pakistan and recently expanded into South Africa.
The company’s model resembles that of quick-commerce players that have attracted billions in funding globally such as Getir (Turkey), Gorillas (Germany), Jokr (US), blinkit (India), and others.
Airlift started as a private transportation network providing a bus service for commuters. However, the coronavirus pandemic led to a suspension of Airlift’s transportation services and forced the company to pivot.
The company initially raised eyebrows in 2019 for raising a notable Series A for its transit business from First Round Capital, the firm that led Uber’s seed round. Airlift has in total raised $109.2M to date. The last round, an $85M Series B by Harry Stebbings and Josh Buckley, was reported to value the company at a reported $275M.
Business Overview & Products
Airlift Express delivers a large range of products in 30-60 minutes to consumers. Their service covers categories such as food supplies, household supplies, pharma, stationery, fresh fruits and vegetables, and electronics. Delivery fees are tiered depending on the size of the cart and are waived above a certain cart size. The service is currently available across 8 cities in Pakistan and 3 cities in South Africa.
The company’s initial transportation service called Airlift Transit was halted in 2020 due to the COVID-19 pandemic and has remained suspended. The website of their transit service cites the suspension is temporary – it remains unclear whether they will resume service in the future given the pivot.
How It Works
Via the Airlift Express service, the company offers express delivery of grocery orders within 30 minutes. Shoppers can choose from a wide selection of products that are delivered with fixed transport charges depending on the order value. Delivery charges are waived over a certain cart size. The company supports both Cash on Delivery (COD) as well as digital payments.
Customers can place an order through their mobile apps or website. Orders can be live-tracked and customers can receive real-time updates if they prefer. Orders may also be canceled within 60 seconds of placing. For scheduled deliveries, customers may cancel orders an hour before their scheduled time slot.
On Airlift’s end, it operates a network of mid-fulfillment centers and dark stores that receive inventory from manufacturers and suppliers. The company leverages advanced demand forecasting algorithms to predict which products will be in demand and stocks the fulfillment centers and dark stores appropriately. The service is operational 24 hours a day in select areas, and from 8am-11pm in others. The service is accessible seven days a week.
Business Model & Pricing
For any orders placed via Airlift express, delivery charges vary according to order size. There is a minimum order limit of PKR 500. The delivery rates vary as such:
Flat fee of PKR 100 for orders below PKR 500
PKR 30 for orders above PKR 500 and below PKR 1000
PKR 10 for orders above PKR 1000
Free delivery on orders above PKR 10,000
The company often offers promotions with free delivery on smaller cart sizes.
In addition to delivery charges, Airlift makes a margin on each product sold much like a traditional retailer.
A deep dive by Pakistan Today highlighted many insightful metrics on Airlift although several were questioned in the report. Airlift was reported to have reached a $50M GMV run rate as of September 2021. Its average order value was reported to be PKR 1,285 (~$7.30) with over 10,000 daily orders being reported.
In its Series B announcement on TechCrunch from August 2021, the company was reported to operate more than 30 dark stores. The company also highlighted plans to expand internationally, starting with South Africa.
A MENAbytes report from August 2021 reported Airlift’s blended customer acquisition cost (CAC) to be $5.
Founder(s) & Team
Usman Gul: Co-founder and CEO at Airlift. Prior to Airlift, he was a Sr. Manager in charge of enterprise partnerships at DoorDash at their headquarters in San Francisco.
Meher Farrukh: Co-founder at Airlift. Prior to Airlift, she was a finance analyst at Coca-Cola Beverages in Pakistan.
Ahmed Ayub: Co-founder at Airlift. He previously founded a company called EXPERIA and had been an executive at several IT companies in Pakistan.
History and Evolution
Founder Usman Gul came up with the idea of Airlift after a vacation he took to Lahore. During this, he experienced an inefficiency in the local transportation options. To deal with the problem of congestion, he and fellow co-founders Meher and Ahmed launched a pilot project in the city in March 2019. The pilot was initially self-funded.
In less than 5 months of its operations, Airlift grew to 50,000 rides per month. It also managed to secure funding worth $2.2M in the 5th month of operations. The company’s launch raised a lot of praise as ride-hailing apps such as Uber and Careem were attracting criticism for putting more cars on traffic-clogged roads. This was an issue, especially in already congested cities, where options for local transport are still far and few.
By July 2019, the startup had expanded its operations to Karachi and acquired about 50,000 riders in Lahore in less than 5 months of operations. When the coronavirus pandemic struck in 2020, it disrupted all public transport and Airlift Transit was temporarily suspended. Operations were originally halted until March 2021, however, it remains to be seen whether the transport service will be resumed or not. To curb losses, the company quickly looked towards other avenues.
Airlift then introduced an online grocery service known as "Airlift Express" in July 2020 and is currently fully focused on this quick commerce model. The service has been expanded to South Africa. Airlift closed its latest Series B funding round of $85M on 18th August 2021 and aims to expand this service to other countries.
Product & Company Reviews
Ad Intel & Value Props
Airlift Express’ mainly focuses its ads on its free delivery offering and 30-minute delivery guarantee.
The company likewise does ad campaigns targeted at new geographies it services
A few of its ads are focused on seasonal discounts and offerings.
View all Facebook Ads: Active Ads Link
Prior to Airlift, founder Usman worked at the food delivery business DoorDash (headquartered in San Francisco). The founder and CEO of DoorDash, Tony Xu, was among the first few angel investors to support Airlift.
According to a source, the transport sector contributes about a quarter of carbon dioxide emissions in Pakistan. Airlift was launched upon the principle of reducing carbon footprint in the country.
There is a program in place called the Airlift Rewards Program. It offers customers the chance to earn points on every item they purchase. These points can then be redeemed for free grocery coupons amounting to PKR 1500 in the Airlift Rewards section of the app.
Airlift may be on its way to becoming Pakistan’s first-ever unicorn.
The food and grocery retail market in Pakistan generated total revenues of $59.3B in 2018, indicating a CAGR of roughly 8.4% from 2014 to 2018.
In 2020, the grocery market in Pakistan was around $48B out of the total $125B retail market in the country.
Internet penetration in Pakistan has gone up by 35% as of January 2020, indicating an increased dependency on online shopping as a whole.
Suggested Next Reads
Pakistan’s Airlift raises $85 million for its quick commerce startup, eyes international expansion (TechCrunch, August ’21)
Interview: In a conversation with Usman Gul, co-founder & CEO of Airlift (MENAbytes, October ’19)
Airlift – A great addition to Pakistan’s public transport system (The Nation, August ‘19)