Navigating the global cash crunch

Barely a year ago, there was optimism all around whenever you talked to people from the startup ecosystem. Coming on the back of a stellar 2021 — that saw investment surge more than 5x — the ecosystem was flush with a high. It continued into the first quarter of 2022, giving the impression that our moment is here to stay. Only to become what seems like a blip now. There were already glaring signs of trouble by the second quarter, beginning with layoffs at Airlift — barely nine months after they had announced an $85 million round — and subsequently shutting off operations. Other well-funded players, including Retailo and Truck It In, cut their workforces significantly. Meanwhile, the funding continued to decline — falling below pre-Covid levels by Q4-2022. While the deal flow recovered from those lows during the first quarter of 2023, the outlook is still quite bleak. Two of the biggest platform-based tech companies operating in Pakistan — Daraz and Foodpanda — recently laid off more than 10 per cent of their staff, with the latter doing it much more discretely. Market reports suggest that there might be more in the offing.