List of Famous Failed Startups and Businesses in India - Updated 2024
Welcome to the list of Famous Failed Startups and Businesses in India, which has been updated for the seventh year in a row ( 2024 being the latest).
Now, 2024 is the year when startups and companies in India are still recovering from COVID and contrary to the usual reasons like businesses failing due to lack of innovation or no market need – businesses are still failing because of the unpredictability after the COVID. Also, the two raging wars (russia-ukraine and now Israel
‘s attack on Gaza has changed the world economy).
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Getting back to the Blog.
Ladies and Gents of the startup and business world in India, it is that time of the year again when I present the sad stories of the failed Indian startups for the year.
This Blog started in 2016.
Ever since then, I have been consistently maintaining (yep, consistency is my strong suit 😉 ) this somewhat melancholic log of failed Indian startups.
But as you know, the purpose of this Blog is not to spread despair.
Quite the contrary.
After all, my Blog was named “The Lessons At Startup” for some reason.
These real-world stories of failed startups are among the most insightful sources for drawing lessons.
India’s startup ecosystem has dramatically expanded over the last few years thanks to increased funding, government support, and an expanding pool of talented entrepreneurs.
A survey of Indian executives conducted by the IBM Institute for Business Values and Oxford Economics revealed that despite India’s flourishing entrepreneurial culture, over 90% of startups do not survive beyond their first five years of operation.
Unfortunately, several famous businesses and startups have failed to reach their intended objectives – serving as cautionary tales for aspiring entrepreneurs about the difficulties and risks inherent in starting a business.
For instance, as of January 2024, more than 855,000 businesses in India had either closed or been struck off.
In contrast, approximately 33,000 firms underwent amalgamations or mergers within the same timeframe.
Consequently, the overall count of nationwide closed enterprises reached roughly 924,000 by 2024. (Source: Statista)
It might bog you down as the numbers look rather scary.
But, as with everything else in life, there are always two sides to a coin and a picture.
Despite this trend, as of May 2024, India’s startup ecosystem, ranking third worldwide for the number of unicorns, had an aggregate valuation of $349.67 billion.
In the current fast-moving and vibrant economy, Indian unicorns are flourishing. (Source: Forbes India)
These are massive numbers and a huge achievement for India.
However, for the first time in four years, the count of Indian startups valued above $1 billion has decreased, according to a report by the Hurun Global Unicorn Index 2024.
The current number is 67, slightly declining from last year’s 68. (Source: India Today)
And in this article, you will learn of some of these failed companies and why.
While at it, you might want to check out the list of Failed startups and businesses from across the globe:
Failed Startups and Businesses in the UK
Failed Startups and Businesses in Australia
Now, without further ado, let’s look at the latest failed startups in India.
Important Disclaimer: The failed startup list for 2023/24 also contains startups that have not completely shut down but have closed some aspects of their businesses and have laid off many employees.
DAZO
Dazo, a Bangalore-based food tech startup, emerged as a “food on demand” company by collaborating with a select group of restaurants and managing the delivery logistics.
Founded by Monica Rastogi and Shashaank Shekhar Singhal, Dazo was of the opinion that customers could quickly find and order their ideal meal within seconds of opening their app.
Originally known as TapCibo, Dazo accomplished this by analyzing and storing user preferences, behaviour, and feedback.
The startup’s had a unique approach of partnering with only about 20 diverse restaurants.
While in operation, Dazo raised $236 thousand in funding. (Source: Crunchbase)
And this was based on the accurate assumption that hungry customers lacked the patience to sift through numerous menus and their reviews.
Instead, they sought the best food delivered promptly and at an affordable price, which was precisely Dazo’s mission.
Reason of Failure
Two primary reasons prompted the company to close: intense competition and insufficient funding.
Substantial capital investment is crucial in the food-tech industry, and Dazo began experiencing a funding shortage.
The intense competition led companies to reduce prices to the point where generating significant revenue became nearly impossible, and the cost of acquiring new clients increased.
Consequently, Dazo faced difficulties securing funds and shut down operations within a year of launching (2015 to 2016). (Source: LinkedIn)
HotelsAroundYou
HotelsAroundYou was a service in India specialising in last-minute and short-term bookings. Animesh Chaudhary, Harsha Nallur, and Mohsin Dingankar founded the hotel service app.
It allowed users to reserve hotels for either daytime transit or overnight stays.
The app showcased hotels with vacant rooms and earned a commission for bookings made through it.
HotelsAroundYou started in 2013 and shut down in 2017.
Before it shut down, it was able to raise a total of $125.4 thousand in funding. (Source: Crunchbase)
Reason of Failure
The app provided a service already dominated by numerous competitors with decades of experience and established user trust.
HotelsAroundYou struggled to secure another round of investor funding and eventually shut down quietly.
By that time, its founders had already moved on to other companies.
Zoomo
Zoomo, a company based in Bangalore, and established in 2014 aimed to build trust in the Indian used car market.
Unlike many other car portals, Zoomo did not allow car dealers to list their vehicles.
Instead, it only listed cars after thorough inspections.
These cars were then sold through peer-to-peer transactions.
Zoomo’s goal was to provide a trustworthy platform where customers could be confident in the quality of the cars and receive a fair, standardized price.
This approach attracted savvy investors, enabling Zoomo to raise over $6 million in venture capital. (Source: Crunchbase)
Reason of Failure
What ended Zoomo in 2016 was not a shortage of funds.
In fact, the three Indian founders chose to shut down and return money to investors while still holding half of their raised capital in the bank.
They also had a talented and dedicated team.
The core issue was with the Indian market itself.
The buy-and-sell automobile market in India was relatively young, with many first-time buyers and sellers who lacked experience in car transactions.
Customers often preferred specific models, but upon comparing prices on other marketplaces, they found lower prices elsewhere, unaware of potential hidden issues.
Assigning standardized prices based on condition, model, and features was challenging, and haggling was deeply ingrained in Indian culture.
They found that for every 100 cars inspected, only 20 were sold, which was unsustainable.
They adjusted their strategy by setting a base price for cars and offering inspections as an additional service for a fee.
This change increased sales slightly but not sufficiently.
The team concluded that the Indian market was not yet mature enough for their model to be scalable.
After considering a merger or acquisition, they decided to end their venture and return the remaining capital. (Source: LinkedIn)
WeTrade
Founded in 2022, WeTrade aimed to simplify the process of cryptocurrency trading for its users.
A cryptocurrency platform based in Bengaluru, WeTrade was forced to close its doors in 2023.
The shutdown was primarily attributed to strict regulatory measures and an unstable market environment.
Despite its promising start, the company soon encountered significant challenges, including difficulties in securing adequate funding and navigating unpredictable market conditions.
Reason of Failure
One of the critical issues WeTrade faced was inadequate market research.
When WeTrade launched, it entered a highly competitive market without fully understanding the existing landscape and consumer needs.
This lack of comprehensive market analysis meant that WeTrade struggled to identify and leverage unique market opportunities.
Consequently, it faced significant difficulties in differentiating itself from numerous other cryptocurrency trading platforms.
Many competitors had already established strong brand identities and customer loyalty, making it challenging for WeTrade to attract and retain users.
Moreover, WeTrade’s inability to stand out in the crowded market directly impacted its revenue generation.
Without a distinctive value proposition, potential users had little incentive to choose WeTrade over other, more established platforms.
The company’s features and services failed to offer significant innovations or advantages that could capture the interest of the cryptocurrency trading community.
This struggle to generate sustainable revenue further strained the company’s financial health.
As the regulatory landscape grew increasingly stringent, WeTrade found it hard to maintain compliance, which further strained its financial resources.
The market’s volatility only exacerbated these issues, making it difficult for the platform to sustain operations.
In the face of these obstacles, the decision was made to cease operations entirely.
This unfortunate turn of events led to the layoff of all employees, marking the end of WeTrade’s brief venture into the cryptocurrency trading industry.
SchoolGennie
SchoolGennie started to assist Indian schools and the broader educational sector in enhancing child development.
Their services were aimed at offering management solutions designed to save time, lower overall costs, and facilitate better administrative resolutions.
To achieve this, SchoolGennie introduced an ERP (electronic records portal) platform for schools. This platform featured services such as Cloud Software Service and Competitive Edge Software.
Reason of Failure
The startup launched in 2013 but did not make more than a year.
In a post, one of SchoolGennie’s co-founders explained the factors leading to the company’s demise.
The most critical issue was likely their lack of experience in the educational sector.
They also failed to test their product for market fit.
Another mistake they made was delaying releasing the product to ‘perfect it’ instead of launching a minimum viable product (MVP) to test the market, which resulted in higher production costs and wasted time.
Additionally, they spent a good amount of money buying unnecessary office furniture instead of hiring experienced developers.
Realising that schools and teachers were not interested in their product, they attempted to mimic their competitors.
However, they lacked expertise in the new services they just ventured into.
Within a few months, the team lost sight of their original vision and became overly influenced by outside opinions.
This divided the two founders, leading to delayed decisions and uncertainty.
Lido Learning
Lido Learning is a Mumbai-based ed-tech startup that provides K12 education tutoring services to students.
The company has garnered attention for its innovative educational approach and efforts to bridge the gap between traditional learning methods and modern technology.
Founded by Saahil Seth in 2019, Lido Learning quickly became a prominent player in the Indian ed-tech space, receiving backing from several high-profile investors.
Despite initial success, the company has faced numerous challenges recently, including financial setbacks and organisational restructuring.
Reason of Failure
Lido Learning, a Mumbai-based ed-tech startup focused on K12 education, has been making negative headlines since the start of the year.
The company laid off over 150 employees in February 2022, becoming the first tech startup to do so in that year.
Moreover, after one of its investors withdrew, the startup failed to secure additional funding. (Source: INC42)
Founder Saahil Seth attempted to merge Lido with Vedantu and Reliance but was unsuccessful. Eventually, the startup declared bankruptcy.
Guruji.com
Anurag Dod and Gaurav Mishra, both IIT Delhi graduates, established Guruji.com in Bengaluru in 2006.
It was India’s first crawler-based search engine exclusively designed and developed for Indian users in India.
The startup achieved early success in two funding rounds and secured $15 million from well-known investors such as Sequoia Capital and Sandstone Capital. (Source: The Indian Wire)
Unfortunately, media reports suggest that the CEO of this distinctive Indian search engine, Anurag Dod, faced legal trouble for copyright infringement.
Reason of Failure
The downfall of Guruji.com can be attributed to its music search feature, which allowed users to search for and access music from various websites, including those with copyrighted material that was not licensed for distribution.
This feature made it easy for users to find and download music without paying, which violated copyright laws and resulted in legal action against Guruji.com.
BabyBerry
BabyBerry was founded in 2014 by Bala Venkatachalam, Dev Vig, and Subhashini Subramaniam in Bengaluru to simplify parenting for new parents by offering them an all-inclusive solution to meet all their childcare needs.
With BabyBerry, they aim to make it less stressful for new parents by offering them a one-stop solution for everything related to childcare.
In 2016, BabyBerry secured $1 million in funding from an angel group led by Nitin Bagmane.
The funding was intended to support the startup’s growth and expansion plans. (Source: The Indian Wire)
Reason of Failure
The startup shut down its operations, and its reasons remain unclear.
A report by TechCircle suggests that BabyBerry did not have a revenue model, which could have contributed to its shutdown.
A sustainable business model can significantly challenge startups. A clear monetisation path can make attracting investors and sustaining operations easier.
RoomsTonite
RoomsTonite was an app that allowed travellers to book hotel rooms at the last minute when travelling to or within India.
Its primary focus was displaying hotels with unoccupied rooms that could be reserved with short notice.
The app was readily available for download from both the Apple and Google Store and was free of charge.
It enabled users to search and reserve rooms at discounted rates from over 4,000 hotels across 325 locations. (Source: Failory)
The booking was intended to be utilised on the same day or within a 72-hour window.
Reason of Failure
Despite the company’s announcement of raising $1.5 million in funding, it faced severe financial difficulties, most likely due to a delay in receiving the payment or complications in the transfer process. (Source: Failory)
This impediment led to the company’s struggle to sustain its operations, which ultimately resulted in its closure.
Yumist
Yumist, founded in 2014 by Alok Jain and Abhimanyu, was revolutionizing India’s food industry by catering daily meals.
Their service promised customers mouthwatering meals delivered within 30 minutes of ordering from them.
Yumist’s innovative and user-friendly platform enabled customers to place delivery orders using its Android and iOS apps and website.
The ordering process was streamlined with only a few clicks or taps, making it convenient for customers to get their meals delivered promptly.
In its early days, Alok Jain and Abhimanyu managed to secure approximately $3 million in seed funding through investment rounds (Source: Startup Times)
Reason of Failure
Yumist had a high burn rate and needed substantial capital to expand.
Unfortunately, the company could not secure enough funding to sustain itself, necessitating Yumist to shut down operations.
Udayy
About Udayy
Udayy was an ed-tech startup launched in Gurgaon, India, by three promising young entrepreneurs: Mahak Garg, Karan Varshney, and Saumya Yadav.
Forbes 30 Under 30 featured the startup and its founders for their Asia 2021 list. (Source: Forbes)
Udayy introduced a unique interactive and game-based approach to learning through live sessions on their online app.
The startup had already spread across more than 1 lac users and 200 teachers when it went on to secure seed funding of $2.5 million to expand its operation.
It also raised around $10 million in funding from US-based Norwest Venture Partners in February this year. (Source: Economic Times)
However, the startup had to close its operation and shut down in 2022.
Reason for Failure
As per Saumya Yadav, the main reason was the lack of user interest after schools opened post-pandemic.
As per Yadav, “the company had enough capital in our books, but the business no longer made sense in the offline world, customer acquisition cost became expensive.” (Source: Economic Times)
The parents and students lost interest in the app when the schools opened up, resulting in an immediate shutdown of the company.
Protonn
About Protonn
Protonn was a startup formed by former Flipkart co-founders: Anil Goteti and Mausam Bhatt.
It provided a platform for independent professionals like lawyers, graphic designers and nutritionists to launch their businesses online.
The professionals were able to launch live sessions, create videos and even generate and track their payments and financial performances.
The company had secured $9 million in seed funding just six months before ceasing its operations. (Source: Economic Times)
Reason for Failure
The company, however, was unable to fit the right product-market fit.
The situation worsened when the founders could not agree on a pivot to save the business.
While the right product-market fit was the main reason, Covid-19 did not help either. Covid-19-related market dynamics also exacerbated the situation necessitating a business pivot. (Source: Economic Times)
Meesho Superstore
About Meesho
Meesho is one of the largest online reseller platforms in India. It provides a platform for customers to launch their businesses via its online services.
The startup was established in 2015 in Bangalore to build an environment where anyone could establish a business without financial investment.
Over the years, Meesho has grown to be one of the largest networks of resellers, acquiring more than 2 million resellers, and 20,000 suppliers. (Source: Startup Talky)
The company, however, had to shut down its grocery business called Meesho Superstore, firing almost 300 of its employees. (Source: Live Mint) The business remains open in only a few select cities (Nagpur & Mysore).
Reason for Shutting Down Part of the Business
The closure of Meesho Superstore was caused by “low revenue and high cash burn”.
The business offered a two severance package to its employees on closure.
The company itself has not given any explanation to its customers on these developments. (Source: Live Mint)
Shuttl
About Shuttle
Shuttle is a mobile app offering commute services to office goers via ride aggregation.
The company was founded in Gurgaon in 2015 by
IITians Amit Singh and Deepanshu Malviya.
The service ran 1200 buses under its digital platform, fulfilling almost 60,000 rounds.
The first of the Shuttl services launched in Delhi-NCR. (Source: Inc24)
Shuttl had secured a total of $36 million in its funding rounds, the latest being in November 2019.
Reason for Failure
As with other small businesses and startups, the pandemic directly impacted the Shuttl business model, and the company could not bear the sudden loss in its demand.
The company is currently looking for buyers to sell its business.
One of its co-founders tweeted that the company was planning to go international last year, inspired by its massive success at home. But the effects of Covid-19-related dynamics were just too heavy for the company. (Source: Business Insider)
The company also faced criticism for failing to pivot its services like some similar apps (Chalo etc.) in the same industry.
Mastree
About Mastree
Mastree was launched by IIT Bombay graduates Shrey Goyal and Royal Jain in 2016. It promised an outcome-based ed-tech app to its customers.
The app promiseD live and personalized attention to each child.
The app focused on teaching application-driven English language courses to kids studying in grades 5-8.
In 2020, Unacademy acquired the business operations of Mastree.
But within one year of its acquisition and investing $5 million, Unacademy decided to shut down Mastree for unexplained reasons.
Reason for Failure
While openly announcing the shutting down of the company, Unacademy did not give any reasons for Mastree’s closure. (Source: Economic Times)
But like with other ed-tech businesses shutting down this year, the downward trend in students’ interest in online learning platforms might have been the cause behind the folding of this ed-tech startup.
As we mentioned, Unacademy acquired the app to strengthen Unacademy’s K-12 side of the business. But as we saw later in 2022 (discussed earlier in the blog), that project was also completely closed down by the company.
Hike Messenger
About Hike Messenger
Hike Messenger, also known as Hike Sticker Chat, was an Indian freeware, cross-platform instant messaging service application.
The app was launched in 2012 by Kavin Bharti Mittal, and Hiker Private Limited later acquired it.
It acquired US-based calling company Zip Phones in 2015 and started providing free voice calling over cellular networks and WiFi across the globe even before Whatsapp.
It was also the first messaging service to launch a mobile payment solution. (Source: Wikipedia)
On 6 January 2021, the company announced via a text message to its customers that it would no longer be effective post-14 January 2021.
Reason for Failure
The company’s co-founder Mittal tweeted that global network effects were too strong for them to continue operating their messaging app. (Source: Economic Times)
SMAAASH
About Smaaash
SMAAASH, launched in 2012, was one of India’s acclaimed gaming and entertainment centers with a perfect combination of sports, virtual reality, music, and dining into an advanced, collaborative, and revolutionary social experience for a range of users categories.
Led by the creative founder Shripal Morakhia, SMAAASH established itself in sports simulation technology and proprietary gamification technologies with enlisted unique twilight bowling zone, motor racing, and bike racing simulators, and the go-karting tracks.
Recently, SMAAASH forayed into the USA market with its Mall of America launch. (Source: SMAAASH)
Reason for failure
The continued lockdown due to the non-improving Covid-19 spread was the prominent reason for the closure of SMAASH. ( Source: Mumbai Mirror)
As per the email sent to all employees dated 15 September 2020 by the founder Shripal Morakhia, “I am sorry that despite my best efforts, I have failed in my efforts to save the company from its premature death.”
“But it just did not materialize when it came to real funding; I am saddened that a dream called Smaaash would have ended in this way.” (Source: Live Mint)
He further added that though the investors had given the company their “word” to “fund” the company, ultimately, it did not result in the capital infusion, which led to the company collapsing.
As I mentioned at the start of the blog, COVID has led to the collapse of the retail, hospitality, and hotel industry.
Reid & Taylor
About Reid & Taylor
Reid & Taylor, known for custom-made compelling first-class suits of top-quality exclusive materials, was a Scottish company that had set shop in India and had established a name for itself across the country in the last few years.
In 1998, S. Kumars obtained ownership of India’s brand to manufacture and market for Reid & Taylor. The deal led to a start of a luxury suiting plant at Mysore in 1998. The brand has been endorsed by India’s notable film actor, Amitabh Bachchan.
In 2008, 24.5% stake of Reid & Taylor with a valuation of US$121 million was acquired by an affiliate of GIC Special Investments.
(Source: Wikipedia)
Reason for failure
Reid & Taylor (TIL) recently closed its factory near Mysore, causing their clients to stop sending sales orders, leaving hundreds of employees jobless. As per reports, The company is liquidated under the National Company Law Tribunal (NCLT) for bearing high non-payment loans.
As per online news, the company did not have any working capital to keep the operations going, resulting in the factory’s closure and relieved all its employees from services. (Source: Fashion Network)
Harley-Davidson
About Harley-Davidson
Harley-Davidson, or H-D, is an American motorcycle manufacturer that began making motorcycles in Milwaukee in 1903. The company manufactures heavyweight motorcycles that are designed for cruising on the highway Harleys.
Harley-Davidson is one of two established motorcycle manufacturing U.S. companies that survived the Great Depression in 1953.
The company established a subsidiary, namely Harley-Davidson India, located in Gurgaon, Delhi, in 2011.
The pollution regulations were changed recently, but the tariff issue yet does not find any solution.
The Indian subsidiary of H-D had 11 models during their early years sold across 29 dealership facilities across India.
In 2011, The company established an assembly unit at Bawal, its only manufacturing facility outside of the U.S.
(Source: Simple Wikipedia)
Reason for failure
Harley-Davidson has put an end to operations in India as part of the ‘Rewire’ strategy that follows a new strategic plan called The Hardwire for 2021-2025.
The company reported its first quarterly loss to happen between April to June 2020 at the value of US$96 million.
Although the brand itself became a local trend, the company faced financial constraints for a certain period.
Harley-Davidson managed to sell off 103 units of motorcycles in India in July 2020 and 176 companies in the later month based on SIAM figures (Society of Indian Automobile Manufacturers).
On 24 September 2020, Harley Davidson announced that it would cease its sales and manufacturing operations in India due to a lack of demand and sales. The move involves US$75 million in restructuring costs, 70 layoffs, and the closure of its Bawal manufacturing plant.
(Source: Times Now News | Wikipedia | Financial Express)
ATLAS CYCLES (HARYANA) LIMITED
About Atlas Cycles
Started by Janki Das Kapoor, Atlas Cycles (Haryana) Ltd., previously known as Atlas Cycle Industries (ACIL), begin its operation with bicycle saddles in 1951 and later produced its first bicycle in 1952.
The brand is named after the Greek Titan Atlas, mythically known for being condemned to hold up the sky for eternity.
From a humble beginning of 120 cycles per day, the company had come a long way to progress as India’s second-largest cycle manufacturer.(Source: Business Standard)
Reason for failure
The company planned to sell its portion of land to get the business going.
However, the company’s spokesperson confirmed that they have been surviving unstable financial states since 2014 to the extent they were out of the capital to purchase raw materials.
The company blamed the government for being neglected by the lopsided policies.
(Source: The Wire | National Herald)
Thomas Cook (India) Ltd
About Thomas Cook
Thomas Cook (India) Ltd. (TCIL) was the leading integrated travel services company.
Thomas cook offered an extensive spectrum of services comprising Foreign Exchange, Corporate Travel, MICE, Leisure Travel, Value Added Services, Visa & Passport services, and E-Business.
The company’s first branch in India was opened in 1881 by founder Thomas Cook, the defunct British brand Thomas Cook & Son.
(Source: Wikipedia)
Reasons for failure
When London-based Thomas Cook Group PLC collapsed under a pile of debt, investors went bearish on the shares of an unrelated company thousands of miles away in India, ignoring multiple clarifications that it isn’t in any way related to the U.K. firm.
This confusion played a vital role in the company shutting down the business. ( Source: Economic Times)
While Thomas Cook India pays an annual license fee of Rs 2 crore process of brand transition shall be initiated next year.
The London-based principle confirmed that the Thomas Cook brand acquired by Fosun Tourism of China excludes India, Mauritius, and Sri Lanka, meaning the Indian entity retains the right to use the brand name till 2024. Thomas Cook India was carved out separately at the time of sale to Fairfax in 2012.
Net4India
About Net4India
Net4 Network Services Limited wass considered one of India’s leading Web Services and Network Services Providers, prioritized providing services to the various scales of businesses and its offerings, including Enterprise Messaging & Hosting Solutions and Domain name registration.
At its peak, the company had 1000 SME customers for a wide range of Web Services and over 2000 Medium to Large businesses for Enterprise Services.
Reasons for failure
The downfall of Net4India started a few years back when the company failed to repay loans and the government’s service tax. In 2013, the government arrested Net4Inda’s promoter for not depositing service tax collected from their clients.
Source: Video Tape News
Jabong.com
About Jabong
Jabong.com was an Indian fashion and lifestyle e-commerce portal founded by Praveen Sinha, Lakshmi Potluri, Arun Chandra Mohan, and Manu Kumar Jain. Rocket Ventures, Germany, founded the company.
Instead of keeping the inventory sold by enlisted vendors, Jabong.com acts as an online mall where the customer can access products sold by all the partners.
In July 2016, Flipkart acquired Jabong through its unit Myntra for about US$70 million. In February 2020, Flipkart formally shut down Jabong to entirely focus on its premium clothing platform Myntra.
Source: Wikipedia
Reasons for failure
The decision from Walmart-owned Flipkart to formally shut down Jabong was taken to concentrate on its premium fashion marketplace, Myntra.
Jabong’s weblink is currently redirected to Myntra’s shopping window by Flipkart, which had acquired the fashion platform around four years, according to a report in the Economic Times.
Due to the unprofitable investment on Jabong.com, in November 2019, Walmart took a non-cash impairment charge of US$290 million equivalent to the value of the ‘Jabong trade name.
Source: Business Today
Doodhwala
About Doodhwala
Established in 2015, the hyperlocal delivery platform, Doodhwala, worked on a subscription model to deliver milk and groceries directly to your doorsteps.
The company offered a wide range of products ranging from milk to fruits and delivered the products before 7 AM daily.
The company believed that its unit economics were robust.
By lowering their delivery cost to Rs.3, Doodhwala positioned itself uniquely in a very competitive market where other players were struggling.
“We have done a great job of maintaining a steady month-on-month growth rate while scoring an 85 percent-plus customer retention,”
The company failed even after raising a recent seed investment of $2.2 million from Omnivore, a venture capitalist firm, in a minority stake in the company.
The new funding came less than a year after the company raised an undisclosed amount in another Pre Series A funding from Thomas Varkey, a partner at Stonehill Capital, USA.
( Source: yourstory | economictimes )
Reasons for failure
Although Doodhwala’s initial funding was without many hindrances, it failed to raise subsequent financing.
One of the biggest challenges facing Doodhwala was prominent players like BigBasket, who were absorbing smaller players in the given segment.
BigBasket had consumed Pune-based RainCan and Bengaluru-based Morningcart for its micro-delivery service BBDaily.
Thereby making it difficult for brands like Doodhwala to sustain themselves on their own.
Furthermore, similar players like Milkbasket and Dailyninja are other players in the market to raise funds, which made the market cluttered.
Swiggy had a presence in subscription commerce through its portfolio company SuprDaily.
Many experts believe that apart from the top three metros (Bengaluru, Mumbai, and NCR), micro delivery platforms aren’t scalable and justified.
The competition forced Doodhwala to shut shop.
( Source: livemint | entrackr )
Doctalk
About Doctalk
In August 2016, Doctalk was started as an app for Doctors with patients.
Through Doctalk, you could send messages to your doctor, store medical files, get detailed prescriptions, save your medications, etc.
In India, healthcare is still offline, and Doctors faced constant patient follow-up and calls.
To make this process seamless, Krishna Chaitanya Aluru came up with the idea of Doctalk.
It built an electronic medical record (EMR) solution, which helped doctors write prescriptions digitally and provide customized prescription templates.
Doctalk had raised roughly $5 million from Matrix Partners and Khosla Ventures and was also backed by Y Combinator, Vy Capital, Liquid2Ventures, Venture Highway, Altair Capital, and some angel investors.
Reasons for failure
The reason for the company’s shutdown was its inability to pivot.
This meant it did not have a plan B if its initial business model failed.
The planned transition into the electronic medical record solution (EMR) business from the existing business model didn’t yield the acceleration that is needed,” said one of the people. “Subsequently, the company has shuttered the entire health-tech concept and laid off a majority of its employees,” said another person.
( Source: livemint | medium | techcircle )
Loanmeet
About Loanmeet
In 2015, Sunil Kumar co-founded Loanmeet after realizing that a large section of borrowers could not get personal and business loans from banks and other financial institutions due to lack of credit history, insufficient documentation, or other reasons.
When capital is to be deployed by financial institutions, the firm’s size plays a considerable role. In such a scenario, Loanmeet attempted to revolutionize banking at the grass-root level.
LoanMeet financed working capital requirement, B2B marketplace financing, cash credit line, and channel financing in the range of Rs 5,000 to 5 lakh for short term period ranging from 15 days to 9 months.
(source: entrackr)
It raised an undisclosed amount of seed funding from Chinese investors and entrepreneurs Cao Yibin and Huang Wei, and Madhusudan, CEO of KrazyBee.
Until Jan 2017, Loanmeet was growing well at about 50% month over month.
Reasons for failure
The lending market is an overcrowded market dominated by established players, and Loanmeet couldn’t sustain the competition.
As a result, it failed to raise further investment.
“LoanMeet had tried raising further investment. However, investors were not convinced as the lending enabling market has been overcrowded with several deep-pocket players,” said two sources. The company also laid off about 15 people in the past couple of months.
One of the prominent reasons for failure in the lending space is that most lending companies are good at solving credit access problems. However, they don’t do in-depth research beyond collecting information from customers where customers’ deep root cause is not getting funded by banks.
( Source: vccircle | economictimes | entrackr )
eBay
About ebay
Well! This wasn’t exactly a shutdown. Instead, it was more of an acquisition and then shut down for business strategy reasons. Yeah! I know the big words 😊” acquisition,” “business strategy” blah-2).
Bottom Line – eBay is no more active in India.
eBay launched its India operations in 2005 but announced its closure on 15 August 2018.
The US-based company sold its India business to Flipkart in 2017 for a cost of $211 million.
Not to be left behind in the race to be a part of one of the fastest-growing eCommerce markets globally, eBay invested $514 million in Flipkart to get a 5.4% stake in the home-grown online marketplace.
And they intend to profit from their investment in the future by selling their stake for a whopping 1.1 billion dollars.
(By the way, how many zeros are there in a billion? Don’t bother – I only count till 1000 – my current pay scale 🙂 ).
Reason for shutdown or exiting the Indian market:
eBay forayed into the Indian market by acquiring Baazee.com for $50 million.
The acquisition allowed them to get their foot in the door, but they were never invincible in India (like the U.S.).
Soon they lost business to their native competitors, including – Flipkart, Snapdeal, and ShopClues.
Their auction business model’s failure to attract Indian customers led to the company after the tried and tested eCommerce model and competing with existing competitors.
Eventually, they invested in a local company – Flipkart.
Well! As they say, if you cannot compete with them, buy them.
After Flipkart said it would shut down eBay India, eBay India declared in May that it would opt out of Flipkart and focus on building a cross-border trade platform.
eBay still hopes and sees India as a growing and potential country for e-commerce and will soon launch its new business model.
(Source: Financial Express | Thequint | India Today )
Zebpay India
About Zebpay India
Zebpay, launched in Singapore and Ahmedabad, was a cryptocurrency startup helping users in cryptocurrency trading.
It was a popular platform for buying and selling cryptocurrencies, including Bitcoin Cash, Ripple, Ethereum, and Litecoin. It also sold airtime and gift cards.
Zebpay was forced to shut down due to RBI’s financial policy to prevent cryptocurrency from entering the market.
Now – that’s a bummer!
At the time of closure (around September 2018), the company had over 3 million users.
Reasons for failure
They were the unlucky ones. After RBI’s announcement to restrict banks and finance companies from doing business with crypto exchanges and wallets on 5 April 2018, it gave three months to close the deals and accounts.
At the time of closure, Zebpay owners said, they could not find a reasonable way to conduct the cryptocurrency exchange business with RBI restrictions. Hence, led to the closure of the company.
Many crypto exchangers appealed against the RBI order in the Supreme Court but to no avail.
Rather than helping them sail through tough times, the government became stricter with crypto exchanges.
Unocoin owners were arrested in October 2018 in Bengaluru on the charges of installing a Bitcoin ATM.
After Zebpay, many other crypto exchanges, including Coinsecure, BTCXIndia, MoneyTrade, and Bitconnect, also closed their ventures in 2018.
( Source: Business Today | INC 42 )
MonkeyBox
About MonkeyBox
Sanjay Rao and Sandeep Kannambadi came together in 2015 to form Monkeybox, a consumer service company operating in Bengaluru. The company started by offering Recommended Dietary Allowance (RDA) approved vegetarian meals to school.
Starting with a few schools, it soon added 85 schools to its service list. In July 2017, Monkeybox provided meals for over 1,500 kids of age group 3-18 per/day.
After adding 2K subscribers to its website, it acquired food businesses – 75 In A Box and RawKing.
Reasons for closure
For its closure, the company only mentioned its services temporarily because it failed to meet its targets.
It pulled the plug on 23 March 2018.
As per an official statement from the company “Unfortunately we are at a point where we will not be able to fulfill our promise of delivering healthy and nutritious meal to the kids going forward due to constraints on our end and don’t want to falter on the quality of our services. Hence we are getting back to the drawing board and working to get back again to serve all the beloved kids in a way that will continue to uphold our vision.
Until we figure out a way to do that, we will have to shut down our services temporarily.”
( Source: mydigitalstartup | entrackr )
Just Buy Live
About Just Buy Live
In 2015, Just Buy Live was launched in Mumbai to offer retailers – a meaningful platform to buy directly from brands.
They even went a step ahead by offering unsecured credit lending for these businesses to help them buy directly from the brand (I know you are thinking – where were you when all this was happening?).
They also provided working capital to small retailers to buy branded products in all categories, from FMCG to Smartphones from ‘Just Buy Live.’
In August 2017, a Dubai based investment group, Ali Cloud Investments, invested a massive $100 million (INR 699.25 crore) Series B funding in Just Buy Live.
Alas! The funding proved insufficient.
Reasons for failure
I don’t know the full story behind its failure, as the founders are still hopeful of reviving the business and have not yet come out in the open to discuss their loss. As far as the internet tells me, the company failed because it had an Unscalable business model and a negative cash flow.
Other than the negative cash flow, a faulty business model too was attributed to the company’s failure
The founders are hopeful of the revival of the brand with the help of fresh funding.
( Source: the-ken | techcircle.vccircle )
MrNeeds
About MrNeeds
MrNeeds was a startup based in Delhi/NCR in the grocery business catering to the NCR Region.
The venture was started in 2016 by four young entrepreneurs – Hitashi Garg, Ravi Wadhwa, Ravi Verma, and Yogesh Garg.
The startup offered online subscription-based services for grocery items like milk, eggs, and bread.
MrNeeds closed its operations despite the overwhelming response they received to their services.
Reasons for failure
According to its owners, the company was doing reasonably well but stopped abruptly without providing any specific reasons for its closure.
It is speculated that the failure of MrNeeds was because of the stiff competition offered by BigBasket and DailyNinja. ( Source: inshorts )
Tazzo
About Tazzo
In 2014, Bengaluru saw a fleet of bikes running on its roads.
Tazzo, the new kid in the startup world, offered point-to-point commuting on bikes at INR 5 per/km.
This easy, quick, convenient, and affordable commuting options – soon became the talk of the town.
Priyam Saraswat, Shivangi Shrivastava, Priyank Suthar, and Vikrant Gosain made a full-proof plan to run the service.
They had a mobile application integrated with GPS technology for real-time tracking of their fleet.
Reasons for closure
Deepak Shahdapuri, MD of DSG Consumer Partners, gives the non-profitable nature as the biggest reason for its failure. Deepak invested $225K (INR 1.5 crore) in Tazzo in October 2016, but even this bailout package couldn’t support the business for a long time.
The project was capital intensive, but there was no profit model for the business.
Moreover, they had substantial operational activities on the online end and offline, which subsequently led to losses. They required too much capital to manage both ends of operations.
The Co-founder of Tazzo, Priyam Saraswat, spoke to TechCircle and said the imbalance of internal and external factors led to its shutting down.
The main reasons were capital-intensive operations and the business couldn’t uphold raising follow-up funding from the investors.
It had to shut down before the funds dried up.
( Source: techcircle.vccircle )
Shotang
About Shotang
In 2013, Bengaluru-based Anter Virk and Anish Basu Roy started Shotang as a B2B platform for manufacturers, distributors, and retailers.
The idea was to offer an online trading platform and to earn a commission in financial transactions. They primarily worked for the mobile and apparel market.
According to VCCircle, Shotang was heavily funded by V.C.s. They received $5 million (INR 35.94 crore) by Exfinity Venture Partners in December 2015 and $864 thousand (INR 6.8 crore) by Patamar Capital in February 2018.
Just before the venture plummeted, its market valuation was $40 million (INR 279.7 crore).
Launched in 2013, it shut shop in 2018 under colossal pressure from competitors.
Reasons for failure
Shotang tried its best but failed miserably due to rising debts and a funds crunch. According to Techcircle, they did the last fundraising to pay off debts – creditors, employees, and partners.
The real reason for the failure of shotang was – fierce competition from Flipkart, Amazon, and Paytm Mall, who, with their deep pockets, were Fastly wiping off competition.
As per CEO Dinesh Agarwal, “the decrease in sales and the effect of demonetization on the company are some of the reasons for the company’s shutdown.
( Source: vccircle | techcircle.vccircle | economictimes )
Stayzilla
Startup Year: 2006
Founders: Yogendra Vasupal (Yogi), Rupal Yogendra, Sachit Singhi
Headquarter: Bengaluru
Stayzilla ventured into the profitable segment of hotel rentals, establishing a niche for itself.
The company raised USD 33.5 million with the support of marquee investors Matrix Partners and Nexus Venture Partners. After the funding, it became the largest homestay network in India.
Stayzilla’s closure was a big shock for the startup community.
The road to end started with the company failing to pay its vendors on time, leading to legal disputes.
There were allegations of non-payment of dues to the tune of Rs. 1.7 crore by Jigsaw Solutions, an advertising agency that handled all promotional activities of Stayzilla.
Jigsaw dragged Stayzilla to court for non-settlement of dues.
To survive all the legal troubles and pay off the past debts, the company filed for insolvency. Unfortunately, the insolvency proceedings were dismissed by Supreme Court.
Legal issues. Financial Troubles. Inability to raise more funds and Non-payment of vendors were some of Stayzilla’s founders’ issues, thereby leading to the failure of one of the most famous startups in India
Finomena
Startup Year: 2015
Founders: Abhishek Garg and Ridhi Mittal
Headquarter: Bangalore
Finomena offered quick loans to people who lacked access to traditional loans.
For some reason, I never heard about them 😉 . I have a long list of people who are willing to take loans without any possibility of returning the loans (my friend Nirav was one of them. I rue the missed opportunity of connecting him to Finomena)
The company worked on a unique algorithm backed system that checked the creditworthiness of buyers.
The company caught everyone’s attention when it was selected for the International Innovator of the Year award by LendIt USA 2017.
Finomena received USD 1.7 million in funding from Matrix Partners and ten angel investors, including Abhay Singhal, co-founder of InMobi.
The owners of the company were featured in the 2016 Forbes 30 under 30 lists.
The company had what you call the perfect opening at the box office for a movie.
Unluckily, the company lost all its steam within a few years. High Cash burn left them with little money to survive, and no investor invested money in them at a later stage.
The attempts to sell the company went futile because of the higher cost of acquisition.
Dial A Celeb
Startup Year: 2016
Founders: Gaurav Chopra and Ranjan Agarwal
Headquarter: Surat
Dial A Celeb was a short-lived but exciting business idea.
Dial A Celeb offered video chats with celebrities, booking celebs for events like weddings, and anniversaries.
The company also gave fans opportunities to have birthdays and celebrity signed products like teddy bears and diaries.
Not much information is available about Dial A Celeb as it closed operations within a year of starting.
Today DialACeleb.com is available for sale. The website is inactive, and the last update on the Facebook page was made on 1 May 2017.
The reason for the closure of the service is changing trends in celebrity service.
The celebrities in India started making their apps, which put a huge dent in its revenue model.
Tiny owl
The Sequoia and Matrix partner backed company shut shop in 2016.
Reasons for Tiny owl’s failure were:
a.) The uncoördinated hiring, and later retrenchment.
c.) Fewer orders and not giving discounts.
d.) No artificial intelligence was used. There was no data analytics when ordering from the app.
e.) Astronomical salaries paid to employees: They hired a Chief technology officer (CTO) at Rs 1.5 Cr./annum with Rs 50 lakh’s joining bonus.
Pepper Tap
In Nov 2014, Navneet Singh, an IIM Ahmedabad graduate, founded PepperTap.
It was built to deliver groceries from local stores to neighborhood customers within two hours.
The main reasons for peppertap’s failure were:
a.) Lacking technological resources
b.) Too many stores opened online far too quickly.
c.) Customers were unable to view all items for sale.
d.) Unable to conserve funds to keep the company financially solvent.
AskMe Bazaar
On 19 August 2016, AskMe, a Gurugram-based e-commerce company, decided to shut show. The move left about 4000 of its employees jobless.
AskMe’s principal investor Astro Holding said it would appoint a forensic auditor to check the books of the startup’s parent firm Getit.
The reasons for AskmeBazaar’s failure were:
a.) Non-payment issue from Astro.
b.) Owing to mismanagement and lack of corporate governance.
c.) Considerable Investments in celebrities to endorse the brand.
d.) AskMe also saw resignations from more than 650 of its employees.
GrocShop
The Mumbai-based startup offered grocery shopping from the comfort of homes or offices at competitive costs.
GrocShop was a part of Microsoft’s startup program, BizSpark, and among the 16 startups selected for the Google Launchpad program.
It reportedly failed to find a profitable growth model in a segment that was otherwise attracting investors in droves.
