After more than five years in operations, the OLX backed car trading platform CarFirst found itself out of business not with a bang but with a whimper. A simple announcement on LinkedIN marked CarFirst shuttering its operations on the heels of its competitor VavaCars announcing they were calling it quits in June this year.
Both companies had a very similar business model. So when VavaCars shut down earlier in the year, questions about the fate of CarFirst had already started making the rounds. The story sounds similar to so many other startups in Pakistan in the past few months. Funding has dried up as the result of the global recession and the US Fed raising interest rates, and CarFirst is just the latest victim. As investors’ sentiment is fueled by fear because of the economic downturn, they are chasing sustainable business models – ones that do not require continuous cash burn.
Remember, however, that this isn’t any old startup. Their failure is a little more complicated and points towards larger problems. CarFirst was funded by Dutch-domiciled global classifieds giant the OLX Group, and is part of the OLX Autos universe which deals in the business of buying and selling of used cars, beyond the classifieds only business and has no shortage of financial heft to back its portfolio companies. And when companies like OLX back out from funding their own portfolio companies, it could hint at very serious challenges in the market. And for tech companies, it means that funding...
Read Full Story: https://profit.pakistantoday.com.pk/2022/08/22/olx-group-backed-carfirst-has-shut-down-in-pakistan-heres-why/
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