Uplift AI, a Pakistan-based voice technology startup, has raised $3.5 million in seed funding as it looks to expand voice-first AI products and create thousands of local jobs.

The round was led by Y Combinator, the Silicon Valley accelerator behind companies like Airbnb, Dropbox and GitLab, with participation from Indus Valley Capital. Other investors include Pioneer Fund, Conjunction, Moment Ventures, and a group of angel investors from Silicon Valley.

Founded by former Apple and Amazon engineers Zaid Qureshi and Hammad Malik, Uplift AI is focused on building voice AI systems for Pakistan’s regional languages, including Urdu, Punjabi and Balochi. The company’s goal is simple: enable people to interact with technology by speaking naturally in their own language.

Its flagship model, Orator, is designed to speak Urdu with near-human fluency, a capability the startup believes is critical in a country where literacy remains a major barrier to digital access.

Uplift AI says its tools are already gaining traction. More than 1,000 developers are using its APIs to build real-world applications ranging from FIR registration bots to voice-based health intake systems for rural clinics.

The company argues that voice-first technology is particularly important for Pakistan, where an estimated 42% of adults are unable to read, limiting participation in the digital economy.

“Voice technology can unlock access to knowledge and opportunity for millions of people,” said Hammad Malik, CEO of Uplift AI. “We started Uplift AI to make that impact now, not years down the line.”

Investors see a large opportunity in this approach. Aatif Awan, Partner at Indus Valley Capital, said voice is often the most practical gateway to the digital economy in emerging markets.

“Built by engineers with deep experience at Apple and Amazon, Uplift AI is creating the core voice infrastructure needed to unlock this market at scale,” he said.

The implications extend across mass-market sectors such as banking, healthcare, agriculture and government services,  areas where text-based digital solutions often fail to reach large segments of the population.

“In Pakistan, agriculture doesn’t lack effort; it lacks accessible intelligence,” said Sultan Raja, Head of AI Transformation at Syngenta Pakistan. “Uplift AI’s voice technology allows us to deliver that intelligence directly to farmers in their own language, helping them adopt AI and improve yields.”

According to CTO Zaid Qureshi, Uplift AI has taken a fully in-house approach to development, handling data collection, labeling and model training internally, a decision driven by the limitations of off-the-shelf solutions for regional languages.

“That investment is paying off,” he said. “We regularly hear from customers who say our models outperform OpenAI and Google for these languages.”

With the new funding, the startup plans to expand voice-first AI support across all major Pakistani languages. While the company sees long-term global potential in serving underserved languages worldwide, Pakistan remains its immediate priority.

“In the short to medium term, our focus is entirely on Pakistan,” Awan told Business Recorder.

Malik said approximately $1 million from the funding will be allocated to data collection and labeling,  an effort expected to generate thousands of local jobs. The remaining capital will be used for research and development, particularly in advancing speech recognition and speech generation for Pakistan’s five major languages.

While Uplift AI is not currently working directly with government departments, Malik noted that its platform is already open to startups and small businesses.

“More than 1,000 developers are already using our API,” he said. “Any startup or small business can sign up and start building today.”

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The rise of startups in Pakistan brought hope for innovation and economic growth. However, many promising ventures have shut down. What causes these failures? We will explore the downfall of 4 notable Pakistani startups. By examining their journeys, we will discuss common pitfalls and valuable lessons for future entrepreneurs. Dive into the challenges and insights behind these closures.

4 Pakistani Startups That Failed

In Pakistan, numerous ventures started and thrived, only to eventually fail. The reasons behind their failure included a lack of funds and poor allocation, lack of transparency between founders and investors, poor business and revenue models, inaccurate forecasts, weak supply chains, and much more.

Here are top 4 startup failure stories. They provide lessons to entrepreneurs who plan to launch their ventures. The stories offer insights into the common pitfalls and challenges faced by startups. They help entrepreneurs make informed decisions as they start and grow a business.

1. Airlift

Airlift Express Team

Airlift set out to revolutionize urban transportation in Pakistan when it launched in 2019, founded by Usman Gul, Ahmed Ayub and Meher Farrukh. Focused on offering a reliable bus-hailing service, it targeted customers seeking an alternative to traditional public transport. With its efficient service and user-friendly app, Airlift swiftly gained popularity, making commuting easier for many people in major cities like Lahore and Karachi.

Transitioning to Quick Commerce

The challenges brought about by COVID-19 significantly impacted public transportation services. In response, Airlift strategically shifted its focus from transportation to quick commerce (Airlift Grocer). This involved delivering groceries and essential goods directly to customers’ doorsteps, with a promise of delivery within 30 minutes. Leveraging their existing logistics network, the aim was to capitalize on the surging demand for online shopping and home delivery.

Funding Success

Airlift’s pivot attracted significant investor interest. The company raised over $85 million in funding from global investors. This capital influx let Airlift expand. It lets them build a strong infrastructure and grow across cities. Investors like First Round Capital and Indus Valley Capital led the funding round. It was one of the largest in Pakistan’s startup history.

Operational Challenges

Despite its initial success, Airlift faced several operational challenges. The quick commerce model required a vast inventory of products. It also required managing complex logistics and ensuring timely deliveries. High operational costs became a significant burden. The need for many vehicles, many warehouses, and much manpower added to the expenses.

Market Competition

Airlift’s quick commerce (Airlift Grocer) venture entered a competitive market. Daraz, GrocerApp, and many local stores established themselves. They had already captured much of the market. Airlift had to compete with these giants. This needed not only lots of money but also a unique value proposition. But Airlift often failed to deliver one.

Pakistan’s economic situation further exacerbated Airlift’s challenges. Rising inflation, currency depreciation, and fluctuating fuel prices increased operational costs. These economic pressures made it hard for Airlift to keep its low-cost promise. They also had to ensure profitability.

Closure and Aftermath

In July 2022, Airlift announced its decision to shut down its operations. The company cited two main reasons for its closure. They were a lack of lasting funding and rising costs. However, when its main investor withdrew support, Airlift found itself without the necessary funds to continue operating, leading to its sudden closure. The shutdown led to big layoffs. It affected hundreds of employees. They had been part of the company’s journey.

Lessons Learned

Airlift’s story offers several important lessons for startups:

• Transitioning can be smart. But it needs thorough market research and a solid plan.
• Controlling costs is crucial. This is especially true in high-burn business models.
• Having a competitive edge is vital. It means standing out from established competitors. This is the key to gaining and keeping market share.
• Startups must be ready for economic changes. These changes can impact their operations. Covid-19 was one of the reasons behind their failure.

2. CarFirst

Launched in late 2016, CarFirst operated as a mediator, purchasing cars from consumers and then selling them to dealers through online auctions, following a classic consumer-to-business-to-business model.

The online platform streamlined the process for car sellers, allowing them to get their cars inspected and sold within an hour, including the time taken for payment processing. CarFirst’s online auction platform for used cars also included an app, which provided partners and a network of buyers with a convenient way to find the cars they needed.

The Vision of CarFirst

CarFirst set out to make the used car transaction process simpler. They did this for both sellers and buyers. CarFirst aimed to remove the hassles of selling used cars the old way. They did this by offering instant quotes, free inspections, and quick payments. The company’s goal was to create a trustworthy, efficient marketplace.

Initial Success and Growth

CarFirst gained traction due to its innovative approach. The company set up a network of inspection centers. They expanded to major cities in Pakistan like Karachi, Lahore, and Islamabad. Customers could bring their cars for a free inspection. They would get an instant offer and get paid within hours if they accepted it. This convenience and transparency appealed to many car owners. They wanted to sell their vehicles without the usual delays and uncertainties.

Funding and Expansion

CarFirst attracted significant investment from both local and international investors. The company raised a lot of money in many investment rounds. This money let the company expand. It improved its technology and increased its marketing. The funding let CarFirst grow its network of inspection centers. It also lets them improve their services.

Operational Challenges

Despite its initial success, CarFirst faced several operational challenges. Scaling the business required big resources. They were for managing many inspections. They were also responsible for maintaining a logistics fleet and ensuring good customer service. Operations became more complex as the company expanded. This made it hard to keep them efficient and profitable.

Market Competition

The used car market in Pakistan is competitive and fragmented. CarFirst faced stiff competition. It came from traditional dealerships, informal networks, and other online platforms. These competitors had deep customer connections and local market knowledge. This made it hard for CarFirst to get and keep market share.

Economic Factors

Pakistan’s economic conditions played a critical role in CarFirst’s struggles. The country had economic instability. Inflation, currency loss, and changing interest rates hurt consumer spending power. These economic factors led to a decline in car sales. This decline affected CarFirst’s business volume and profitability. Also, the costs of importing car parts and running a large network increased. This strained the company’s finances more.

Trust and Transparency Issues

Building trust was hard. Traditional dealers and informal networks dominated the market. CarFirst worked to be fair and clear. But, it had to keep working to gain trust and overcome doubt. Ensuring consistent quality in inspections and offers was critical. But, any differences or bad customer experiences could erode trust.

Closure and Aftermath

In October 2021, CarFirst announced its decision to stop operations in Pakistan. The company cited economic challenges as the main reason for its closure. They also cited operational inefficiencies and intense market competition. The shutdown led to the closure of inspection centers. It also led to layoffs. It left many customers looking for other places to buy or sell their cars.

Lessons Learned

CarFirst’s journey in Pakistan provides several important lessons:

• Operational Efficiency: Scaling operations in a complex and competitive market requires careful planning. It also requires managing resources well.
• Market dynamics are key. Understanding local markets and customers is crucial. It helps in gaining and retaining market share.
• Economic Adaptability: Building resilience against economic fluctuations can help startups navigate challenging times.
• Building and keeping customer trust is essential for long-term success. It requires continuous work.

3. Cheetay

Cheetay, launched in 2015 by brothers Ahmad Khan and Majid Khan, made its mark as a well-known startup in Pakistan. Initially established as an online food delivery platform, Cheetay quickly found itself in competition with industry giants like FoodPanda. However, the company expanded its scope over time, venturing into the realm of grocery delivery, a move that gained significant traction, particularly during the COVID-19 pandemic.

Evolution of Services

As the demand for groceries surged, Cheetay initially employed a dropshipping model, facilitating the direct delivery of goods from stores to customers’ homes. Subsequently, the company pivoted to a quick commerce model, establishing dark stores to expedite deliveries and enhance overall customer experience.

Funding Milestones

In April 2021, Jabberwock Ventures, the parent company of Cheetay, secured $20 million in Series-B funding, underscoring investor confidence in the startup’s potential. While there were rumors of a larger investment specifically allocated for Cheetay Logistics, it was clarified that the funds were intended for all startups under Jabberwock Ventures, rather than solely for Cheetay Logistics.

Operational Challenges and Tough Decisions

Despite initial successes and significant investments, Cheetay found itself at a critical juncture after three years of operations. Facing operational challenges and economic headwinds, the company made the difficult decision to wind down its operations. This decision was precipitated by the inherent challenges associated with Quick Commerce’s high-burn business model and the limited demand for immediate grocery services.

Market Dynamics and Competition

Cheetay also encountered stiff competition in its restaurant aggregation business, particularly from FoodPanda, backed by substantial funding from DeliveryHero. The intense competition, coupled with economic uncertainties, exacerbated Cheetay’s struggles, ultimately leading to the cessation of its food delivery operations and the impending closure of all its services, including quick commerce.

Lessons Learned

The journey of Cheetay offers valuable lessons for startups:

• Operational Efficiency: Scaling operations in a complex and competitive market requires careful planning and resource management.
• Understanding Market Dynamics: Gaining insights into local markets and customer preferences is crucial for gaining and retaining market share.
• Economic Adaptability: Building resilience against economic fluctuations can help startups navigate challenging times.
• Trust and Transparency: Establishing and maintaining trust with customers is essential for long-term success and requires continuous effort and commitment.

4. Jugnu

Jugnu, a Pakistani startup founded in 2019 by ex-Unilever executives Sharoon Saleem and Yasir Suleman Memon, ventured into B2B e-commerce with the aim of digitizing and empowering small retailers. Building on their experience with Salesflo, a retail automation tool, the founders envisioned Jugnu as a platform to streamline inventory management and access to capital for retailers.

Vision and Services

Jugnu’s platform provided retailers with the tools to order and manage their inventory, offering a wide range of products from various suppliers. The startup’s services aimed to simplify supply chain management and enhance retail efficiency.

Funding and Expansion

With a total funding of $25.7 million across three rounds, including a significant Series A round of $22.5 million led by MENA-based e-commerce marketplace Sary, Sarmayacar, and Systems Limited in March 2022, Jugnu experienced rapid growth. At its peak, the startup had onboarded over 30,000 retailers across Islamabad, Rawalpindi, and Lahore.

The Downfall

Despite substantial funding and initial success, Jugnu encountered numerous challenges that ultimately led to the cessation of its core operations:

1. Investor Withdrawal: A significant setback occurred when an investor withdrew support from Jugnu, leading to financial difficulties that proved insurmountable.
2. Profitability Hurdles: The FMCG sector’s slim profit margins and high operational expenses posed significant challenges for Jugnu’s profitability.
3. Internal Mismanagement: Internal inefficiencies and mismanagement resulted in notable losses in inventory, primarily due to internal theft.
4. Work Culture Issues: Former employees highlighted a toxic work culture and unprofessional conduct from senior management as contributing factors to Jugnu’s downfall.

Transition and Closure

In response to these challenges, Jugnu announced a pivot away from its self-managed fulfillment centers, logistics, and inventory model. Instead, the company planned to leverage its tech and data suite to facilitate commerce and financial inclusion. However, this transition resulted in layoffs and ultimately led to the shutdown of the startup.

Lessons Learned

The story of Jugnu underscores the volatility of the startup landscape, where external factors like investor sentiment and internal issues such as management and efficiency play significant roles. Jugnu’s closure serves as a poignant reminder of the importance of sustainable business practices and the need for startups to adapt to shifting economic realities.

Conclusion

The stories of Airlift, Cheetay, and CarFirst highlight the blend of innovation and potential inherent in Pakistani startups, alongside the multitude of challenges they face. These ventures underscore the importance of adaptability, cost management, and a deep understanding of market dynamics. Economic instability, fierce competition, and regulatory hurdles often pose significant obstacles to their success.

Despite receiving substantial funding and experiencing strong initial growth, these startups ultimately succumbed to a myriad of operational issues and external pressures. However, their closures offer valuable lessons for future entrepreneurs.

Future startup founders can glean important insights from these failures, emphasizing the necessity of establishing a robust business model, differentiating themselves from competitors, and remaining prepared for economic fluctuations. While the closures are undoubtedly disappointing, they provide invaluable lessons that can guide future startups towards success in Pakistan’s dynamic startup landscape.

Achieving success in Pakistan’s startup ecosystem necessitates meticulous planning, meticulous execution, and a steadfast focus on addressing market needs. By internalizing the lessons learned from these closures, future startups can navigate the challenges more effectively and increase their chances of long-term viability and success.

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Sastaticket.pk, an online travel website based in Karachi, Pakistan, announced today at the 021 Disrupt Conference that it has secured US$1.5 M for its Series A, led by regional venture capital firm Gobi Partners. The investment marks Gobi’s first venture into the Pakistani market and adds another pioneering company to its growing TaqwaTech portfolio.

Founded in September 2016 by brothers Shazil and Bilal Mehkri, Sastaticket.pk offers domestic travellers a way to book and pay for flights and hotels instantly online. Ever since its launch in 2016, the platform has experienced significant growth in GMV at 125% YoY, and number of orders at 155% YoY, and has over one million flight searches per month, indicating a clear market demand for the platform.

Today, Sastaticket.pk is currently the Pakistan’s largest one-stop web platform for all travel-related services.

The company has consistently delivered sound growth and demonstrated technical expertise; they have articulated a clear vision to solve problems faced by Pakistani travellers.

“With this round of funding and access to Gobi’s wealth of experience in the online travel sector across Asia, we are excited to enhance our products and services. This funding will help us increase our scale, recruit top talent, and increase our development speed in critical segments such as Islamic tourism,”

said Shazil.

Gobi’s Founding Partner, Thomas G. Tsao, also commented on the round, saying,

“Gobi has had a lot of success investing in the online travel space. We believe the conditions that led to the growth of giant OTAs in China are also present in Pakistan. Sastaticket has a real opportunity to become one of the first unicorns out of the country.”

Nowadays, Pakistan is one of Asia’s fastest growing Internet markets, with over one million people going online via their mobile phones every month. The e-commerce market has similarly witnessed phenomenal growth recently, driven by the country’s large population, rising middle class, and strong digital adoption rates; it is growing at a CAGR of over 100%, and as per Google’s analysis, will surpass the US$1 billion revenue mark by 2020.

In addition, the country’s travel market is showing great potential; it stood at US$8.8 billion in 2017, contributing 2.9% of the total GDP, and is forecasted to grow to US$16.4 billion by 2028, representing a CAGR of 5.8%.

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LUMS Center for Entrepreneurship (LCE) in collaboration with Ilm Ideas 2 and Techstars, organized a themed Startup Weekend event at LUMS to scout and support innovators looking to address the enrollment, retention and learning outcome challenges in the education sector of Pakistan.

The event started on Friday evening, August 5, with Dr. Zartash Afzal Uzmi, LUMS faculty member and facilitator for Startup Weekend Lahore, commencing the proceedings and opening remarks presented by Shahida Saleem, Team Lead Pakistan Education Innovation Fund (Ilm Ideas 2). From among the 130 participants of the Start Weekend, a total of 63 startups made their elevator pitches to the audience on Friday evening. 19 startups were shortlisted to continue with the competition and mentoring support for the rest of the weekend.

Participants worked tirelessly throughout the weekend including the nights with a passion that was palpable. Through Saturday until Sunday evening, successful business people and educators came in to mentor and coach the startups and help them polish their business models, financials and even presentations. The hard work of all the teams culminated on Sunday, August 7, where all the 19 shortlisted teams pitched in front of a panel of judges comprising of Khurram Zafar, Abid Malik, Faisal Bari, Izza Farrukh, Shahida Saleem, Imran Sarwar and Gauher Aftab.

Ilmistan, an online platform for teachers training won the competition. Keep Schools Safe, a startup focused on imparting disaster preparedness training to schools, came in second. According to the founders, there are hundreds of thousands of kids whose education suffer because of disruptions caused by natural disasters and people-caused incidents in Pakistan. Edu Care, a startup formed by students of Namal University that aims to build an online networking platform to connect students in any part of the country with volunteer tutors and coaches, came in third. The founders of Educare dedicated the win to the generous donors of Namal University that enabled them to seek good education and gave them the confidence to start their own ambitious venture. The Audience Favorite vote went out to SS Gamification, a team who is working on gamifying social sciences subjects in schools.

Addressing the participants of the Startup Weekend, Shahida Saleem of Ilm Ideas 2 said, “You all blew me away! Your energy, your passion and your commitment is infectious and I believe that a lot of social enterprises we saw develop over the weekend will play a pivotal role in providing 25 million out of school children access to good education.”

The winning team and the top two runners up are offered guaranteed incubation at LUMS Center for Entrepreneurship while all other participants were encouraged to apply for incubation for the 6^th batch of LCE through the online application process.

About Startup Weekend Lahore:

Startup Weekend Lahore is the Lahore chapter of the global Startup Weekend event held at LUMS every year. The event is backed by Google for Entrepreneurs, .CO and TechStars and is a 54-hour event that brings together enthusiastic and driven budding entrepreneurs who are learning the basics of founding startups leading to the path of launching successful ventures.

About LUMS Center for Entrepreneurship:

LUMS Center for Entrepreneurship (LCE) is Pakistan’s most comprehensive experiential development platform for budding entrepreneurs that formalizes the process of scouting, grooming and facilitating passionate startup founders. Gust and Fundacity recently rated LCE the #1 accelerator in Pakistan and #11 in Asia. Since its inception in May 2014, LCE has mentored over 130 entrepreneurs who have created over 400 direct jobs and provided better economic and livelihood opportunities for thousands more. LCE graduates have already generated PKR 200 Million in revenues and are valued at PKR 1.5 Billion backed by approximately PKR 150 Million in investment capital by local and foreign investors. More about LCE at: lce.lums.edu.pk and Facebook and Twitter

About Ilm Ideas 2:

Ilm Ideas 2, supported by the UK Department for International Development (DFID), provides a platform for the generation, piloting and scaling up of innovative solutions to address critical education challenges in Pakistan. Phase 2 of the program, launched in 2015, is managed by Cambridge Education, a member of the Mott MacDonald group. More about Ilm Ideas 2 at: ilmideas2.pk and Facebook and Twitter

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