Over the past few years, many popular startups in Pakistan have gone through difficult times. Some companies completely shut down, while others reduced their services, laid off employees, or quietly left the market. A few years ago, many of these startups were growing very fast and were being seen as the future of Pakistan’s tech industry.
Why Startups in Pakistan Fail Even After Big Funding
Most of these companies raised millions of dollars from investors. After getting funding, they expanded quickly, opened offices in different cities, hired large teams, and spent heavily on advertisements, discounts, and promotions. For some time, their apps and services became very popular, and many people started using them daily. At the same time, newer tech trends like Poke AI agents also started gaining attention in the startup industry as businesses explored faster and smarter digital solutions.
But as time passed, problems started to appear. Inflation increased business costs, fuel prices became higher, and competition in the market became much stronger. Many startups were spending huge amounts of money to attract customers, but they were not earning enough profit in return. When business expenses continued to rise, surviving became harder for many companies.
Another major issue was dependence on investor money. Several startups were growing with the help of continuous funding instead of stable profits. When global investment activity slowed down, many companies suddenly faced financial pressure and had difficulty managing their daily operations. At the same time, opportunities like Pakistan Incubator Cohort 5 highlighted how startups are now focusing more on structured growth and long-term stability instead of relying only on funding.
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Careem Lost Ground to Cheaper Services
Careem started its services in Pakistan in 2015 and quickly became one of the country’s most popular ride-hailing apps. Later, the company became part of Uber. However, over time, cheaper services like inDrive and Yango attracted more users because of lower fares. At the same time, rising fuel prices increased operating costs. In 2025, Careem suspended its ride-hailing service in Pakistan to reduce losses. The situation showed that even big and trusted brands can struggle when customers start choosing cheaper options.
Cheetay and Airlift Expanded Too Fast
Cheetay became popular during the COVID-19 period as online delivery services became more common. The startup expanded quickly after receiving funding, but reports said high operational costs and strong competition created serious financial pressure. The company later shut down in 2024.
Airlift also saw rapid growth and became one of the most talked-about startups in the country. It first started as a transport service and later moved into grocery and quick delivery services. Although the company raised large investments, its business model depended heavily on funding and discounts. When an important investment deal failed in 2022, the company shut down completely. These examples showed that growing too fast without stable profits can become risky for any business.
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Other Startups Also Faced Difficulties
Swvl entered Pakistan in 2019 to improve bus travel services. However, the company later exited Pakistan in 2022 after facing difficulties in the local market. Dastgyr raised millions to help small shops buy products through digital systems. But inflation, warehouse costs, and slower adoption in the market created financial challenges. In 2024, the company reportedly laid off many employees to continue operating. VavaCars launched in Pakistan in 2020 to digitize used car sales. Later, the company exited the market because of inflation and tough competition in the traditional car business.
These stories show that funding alone is not enough to build a successful long-term business. Companies also need stable profits, careful planning, and controlled spending. The situation also highlights the importance of understanding local market conditions and customer behavior before expanding too quickly. Many startups became successful very fast, but surviving for the long term became difficult when costs increased and profits stayed low. News source eTimes Pakistan.
