How Airlift & Swvl changed their strategy from ride-hailing to grocery delivery?

The back-to-back launch of Airlift and Swvl in early 2019

Early 2019 the news broke of Airlift, a Pakistan-based startup, raising a total of $2.2 million in a seed round. Airlift aimed to build a decentralized global mass transit system. They turned a lot of heads raising the country’s largest Series A funding of $12 million. After that, Airlift has been the talk of the town.

In July of 2019, Swvl, a global mobility leader in mass transit launched in Pakistan. Swvl is a company founded in Egypt based now in Dubai. The startup aimed to invest up to $25 million in Pakistan in the year 2019.

Both the startups offered prices as low as Rs. 50 for commuting within a city. Airlift and Swvl both started their services from Lahore. Swvl later extended their services in Islamabad and Karachi as well while Airlift now operates in up to 8 cities.

The public transport system in Pakistan has been an unsafe, unorganized and unclean mess. In a country lacking anything resembling a mass transit system, app-based bus-hailing services are destined to thrive. Airlift and Swvl instead of being a threat to each other prospered in their own ways. Cheaper than car-hailing services like Uber and Careem and more safe, comfortable, and convenient than public transport. Both the startups were exponentially increasing their customers until the start of 2020.

The effect of Covid-19 on the startup Ecosystem

Early 2020, Covid-19 happened, changing the world altogether. The fear and uncertainty had everyone clueless about what lies ahead.

Airlift suspended its operations in March 2020, issuing a statement that read “Crowded places in closed settings create a high-risk environment for contracting the COVID-19 virus. As a responsible organization, Airlift encourages passengers to adopt alternative modes of transport.” Swvl announced the suspension of the intercity bus service, however, the company’s intra-city bus service continued.

The pandemic was a test of time for which startups would strive and which won’t. A great number of full-blown businesses went bankrupt in those uncertain times, Millions around the globe lost their jobs. Airlift and Swvl had quite unique Covid strategies.

The Covid Strategy of Airlift and the launch of Airlift Grocers

1st of July 2020, Usman Gul, co-founder and CEO of Airlift announced Airlift closing $10m in Series A-1 Financing. At a time of mass turbulence in capital markets, Airlift’s Series A-1 round marked one of the largest capital investments in the region. He mentioned mergers with high-profile investors from San Francisco, London, Taiwan, New York, and more. Many of the investors from previous financing rounds also chipped in.

At the same time, Airlift announced the launch of Airlift Grocers under the umbrella of Airlift Technologies. “Our team is excited to resume transit operations once the worst of the pandemic is behind us. In the interim, we have introduced Airlift Grocer — a 45-minute delivery service for all household essentials. You can access Airlift Grocer via the app store, the play store, or on the web”, Usman Gul stated.

How Airlift managed a successful delivery service venture among prominent competitors

It is believed, there is no alternative to experience. Usman Gul, before launching Airlift, worked at DoorDash, an online food ordering company. He worked there for almost 2 years, resigning at the position of Senior Manager.

This explains Airlift’s shift to food delivery services. With lockdowns being observed all over the country, it was the utmost requirement of the time. They had the expertise, it was all about pushing the right button at the right time. Airlift Grocers now are a leading food delivery service operating in 8 cities across Pakistan.

In an interview with Karavan’s Amad Mian, Meher Farukh, the co-founder of airlift said she believes that in the early stages of a startup, speed is everything. “Start early, don’t wait for everything to be perfect, moving fast gives you wings. It accelerates your entire journey,” she suggested.

According to Mehr Farukh, their team focuses on solutions and doesn’t let challenges be an excuse. Airlift’s swift shift to the food delivery domain given the circumstances is a true example of what she said.

In addition to groceries, Airlift today also delivers fresh produce, OTC and prescription medicines, and sports goods, from its network of multiple fulfilment centres across every city it operates in. However, their mass transit operations still lie suspended.

Airlift now aims to expand internationally, raising a total of $85 million in Series B funding. The target market for them is Asia and Africa. Capital flowing in from other markets is great for the local startup ecosystem in Pakistan.

The Covid Strategy of Swvl

The case for Swvl has been pretty interesting as well. They had landed a massive Series B funding of $20 million just before the covid outburst. Instead of limiting its team, the company aimed to cut down its variable expenses. Since growth was at a halt, utilizing the downtime they focussed on optimizing efficiency.

They divided their employees into squads of 4 to 5 people who would work on problem statements within the company and come up with solving strategies. Within a span of 2 weeks, there was an 80% reduction in spending. Swvl turned up to be a net margin profitable company post covid while being on the same scale as pre-covid. The company now spends 50% of what they used to spend.

Why grocery delivery services?

There have been speculations about Swvl entering food delivery services. Two of Pakistan’s most prominent bus-hailing services entering delivery services have been incomprehensible.

Surprisingly enough, Mostafa Kandil founder of Swvl has previously worked with Rocket Internet. It is a venture capital company that acquired a food delivery service in Egypt. Mostafa worked closely on this project to restructure it and make it more efficient.

I see a few parallels here. A conveyance-providing company can perform deliveries using the existing human and vehicle resources they have. In addition to that, the founders had previous experience, specifically in the food delivery domain. The expertise, the given resources, and the post-covid requirements combined is a good combination for a successful delivery service company.

Upcoming ventures of Airlift and Swvl

Airlift and Swvl both have their eyes on the Middle East, Asia, and Africa. The startups are ready to launch internationally. Considering their accomplishments, challenges, and customer services, they have a long way to go.

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