Several Pakistani startups are grappling with uncertainty and a severe funding decline, prompting considerations of shutdowns or significant layoffs. Among those affected are Cheetay, a delivery service startup, B2B startup Dastgyr, Electronic Monetary Institute (EMI) YAP, and fintech company Paymob. Cheetay is reportedly on the verge of permanent closure, while the others are planning substantial downsizing, with some letting go of up to 85% of their workforce.
Cheetay, founded in 2015 as an online food delivery platform, expanded into the grocery delivery sector during the pandemic. Despite securing nearly $20 million in a Series-B funding round in April 2021, the company is now facing closure due to the challenging business model of quick commerce and insufficient demand for immediate grocery services.
Dastgyr, a B2B eCommerce marketplace, is also in a precarious position, with reports of a significant reduction in its workforce. The company cites global and local economic challenges as reasons for mass layoffs, revealing an unsustainable and unfundable model due to high costs and tight profit margins.
YAP, an emerging Electronic Money Institution (EMI) in Pakistan’s fintech scene, has reportedly laid off almost its entire workforce of around 50 people, raising concerns about its in-principle approval for an EMI license. Sources suggest that YAP has struggled to meet the central bank’s minimum capital requirement, potentially jeopardizing its license approval.
Paymob, a well-funded fintech company specializing in online payments processing, is also undergoing aggressive downsizing, affecting over 35%-50% of its 90-plus workforce. Despite being well-funded, Paymob has faced challenges achieving sustainability and positive unit economics, leading to the current restructuring.
These developments highlight the financial strains faced by Pakistani startups, reflecting a broader trend of funding challenges and business model sustainability issues in the region’s startup ecosystem.
