Careem Shuts Down; End of an Era?

July 2025:

Careem has shut down its services in Pakistan, citing tough competition, economic headwinds, and a shift in strategic priorities.

It feels like the final nail in the coffin. The Pakistani unicorn that we had all hoped to replicate has closed its doors at home. Even our own unicorn could not withstand the proverbial heat. So, where did it all go wrong?

Cut to: August 2019

Airlift raised seed funding of $2.2 million, and the entire nation began to dream. By 2021, the company had secured $110 million, pushing its valuation to $275 million. During those two or three years, it seemed as though the whole tech world was about to explode.

The Careem alumni were widely favoured by venture capital because they knew how to build. Any former “Careemer” with an idea was talking about seed, pre-seed, angel, SAFE notes, and all those other VC buzzwords for capital.

The term “Wapistani” was coined for the startup and tech professionals returning to tap into the gold mines they believed were waiting here.

The venture capitalist became the new rock star mentor, Valley-bred, flush with cash, and ready to change our lives.

India, Indonesia, Nigeria, and the UAE were all touted as our predecessors. The ecosystem started preparing for an incoming wave of capital: co-working spaces, incubators, and startups appeared on every corner, while lawyers, bankers, and accountants specialised in routing money through the US and Singapore to build a system that would mine this gold.

Quick commerce, e-commerce, price comparison, fintech, and a raft of other buzzwords became the favourite playgrounds of young entrepreneurs. Half of us did not even know what they really meant, but we were told they were “sexy,” exactly where our Western friends wanted to invest.

Unit economics, profitability, revenue, and sustainability were considered side effects of growth, user acquisition, and fundraising. Why make money when you could raise it?

Cut to: July 2025

Airlift and most of its peers have shut down. Venture capital has well and truly dried up; the entire industry raised an estimated $60.2 million in 2025. Compare that with Airlift’s $85 million Series B, raised alone, when its valuation stood at $275 million.

Meanwhile, Microsoft has exited Pakistan and committed $3 billion to India. Where does that leave us? Even Shark Tank Pakistan has cleaned house, with most of its venture capitalists gone after one season.

Even the success stories, Bookme, Bykea, and a few others, may be surviving, but they are certainly not thriving. Where does that leave us? Let’s begin by deciding who is at fault.

So who is at fault?

A lot of people, and no one. But for argument’s sake, here is a list:

• • The United States: After the 2022 tech crash, the US shifted its stance. Capital began flowing back home, and cooler geopolitical relations largely dried up VC funding. Should we expect investors to renew their interest in Pakistan? The tech bubble has deflated, and venture money is now moving toward AI and other exploratory fields. These areas demand cutting-edge expertise, and Pakistan’s limited IT capacity makes it even less likely to compete globally.
  • Pakistan: Rising inflation, a weakening rupee, political instability, and general uncertainty turned a hard task into an almost impossible one. How can anyone invest dollars and earn a profit when returns are in rapidly depreciating PKR? The game is nearly unwinnable. Add the ongoing challenges of Covid, political turmoil, and even the risk of conflict, and you’re effectively at checkmate.
  • China: Where does China fit into all this? Our “iron-clad” partners support infrastructure projects like CPEC and defend us on the global stage, yet they have shown little appetite for our tech sector. Perhaps they saw warning signs others missed. Does China invest in startups, or does it establish its own ventures? We have seen China Mobile, Alibaba, and others enter the Pakistani market, but their approach differs markedly from Western investors. From their perspective, it works. Whether it benefits our local startup ecosystem is less certain.
  • Corporate venturing: Could giants like Engro or Habib Bank have stepped up? Probably not, given the lofty valuations and dollar amounts involved. Could that change? Possibly, once the dust settles. Their entry would likely be at pennies on the dollar compared with foreign capital.
  • MENA: Funds such as Shorooq, STV, and ADQ show promise. Could they have done more earlier? Arguably not. Market dynamics were unfavorable, and ticket sizes were already too large for many of them. This region is still in the early stages of building its own unicorns and success stories. Unlike the US and Europe, it lacks established role models to emulate.
  • The Pakistani government: As usual, more could have been done—better policy, tax incentives, and broader support. Authorities might have eased the flow of money in and out of the country and strengthened the infrastructure needed for growth. They could also have enforced banking reforms and improved access to credit. Yet, persistent political and economic instability make long-term change difficult to implement.
  • Venture capitalists: Did they chase too many trends? Did they back the right founders or simply the ones they enjoyed coffee with? Hindsight is an imperfect lens. Our venture capitalists were learning on the job, just like the rest of us; they still are. As they gain experience, their startups and founders should grow alongside them.
  • The founders: They, too, must shoulder some responsibility. Many bright minds were likely following the wrong playbook. It is hard for any founder to bear all the blame when the rules of the game keep shifting. It is like asking a T20 batsman to reinvent himself for test cricket overnight, it was almost doomed to fail.

So what happens next?

Perhaps we rebuild. We try again. With shifting geopolitics, maybe we should look to raise capital more logically from the MENA region, from China, or even locally. Maybe the market needs patient capital, more substance, less rapid growth. Venture capitalists must rethink strategy and focus. The government should prioritise policy over incubators and laptop giveaways. Founders might consider regional plays instead of putting all their eggs in one basket.

For now, we have more questions than answers. Let us hope this is merely the end of an era, not the end of the industry.