10 Famous Failed Startups and Businesses in the United Kingdom
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Between 2019 and 2020, the UK Government reported that a total of 665,495 startups started in UK.
That is about 1,823 new startups every day, and one startup every minute. (Source: GOV.UK)
However, a lot of them failed and were never heard again.
The number of businesses that closed in the United Kingdom in the 3rd quarter of 2021 (July to September) amounted to 100,835. (Source: Office for National Statistics)
In fact, 20% of startups do not get past their first year and 60% will go under before they finish their third year in business. (Source: fundsquire)
The Startup world is cruel and the entrepeneurs in the UK are no different from the ones starting in the other parts of the world.
As always, our aim is to help you learn from the failures of these United Kingdom (UK) based startups so that you do not end up making the same mistake.
In this blog, we go to the UK and look at some of the Failed Startups and Businesses in the United Kingdom (UK).
This blog is our next blog in the list of famous failed startups and businesses across the globe where we have covered Famous Failed startups and businesses in India and Failed startups and businesses in Australia.
Great British Prawns
Founder(s): James McEuen and Dougie Allen
Founded: 2015
Shutdown in: 2021
Funding Amount: £3 Million
Industry: Aquaculture
Reason for failure: Covid-19 effect on the hospitality
The Great British Prawns was a wholesale supplier of prawns to restaurants in most parts of the UK.
The company had a farm near Stirling where they produced tropical prawns making use of acceptable farming techniques.
Covid-19 affected a lot of businesses; one of such was the hospitality sector. The shutdown of restaurants and hotels during the pandemic had a major hit on Great British Prawns that they ceased trading. (Source: BBC News)
Although the company has gone under with most of its employees covered under the Government’s CoronaVirus job retention scheme, Dougie Allen, one of the co-founders is still actively involved in sustainable aquaculture.
At the moment, Dougie is a Director at Great British Aquatech which is into discovering innovative solutions for land-based aquaculture.
His co-founder, James McEuen, is backing different lifestyle and outdoor brands at Bradshaw Taylor as a NED.
While The Great Pawn was still in operation, the Great British Prawns raised £3M in 1 funding round in 2018. (Source: Crunchbase)
Friska
Founder(s): Ed Brown and Griff Holland
Founded: 2009
Shutdown in: 2021
Funding Amount: £3 Million
Industry: Hospitality
Reason for failure: Covid-19 effect on the hospitality
Another company that was affected by the pandemic was Friska, a company based out of Bristol, UK.
Before Friskan went under, Friska owned a series of restaurants in the UK.
The company ran a successful business until the measures taken by the Government on hospitality industries due to Covid-19 led it to close its premises in April 2020.
The company did try to survive by offering takeaway options on and off throughout the same year.
However, the journey was never smooth.
Friska first struggled for 15 months before it collapsed into administration due to the pandemic. At the time of going into administration, Friska had a number of branches in Manchester, Bristol, and Luton Airport. (Source: BusinessLive)
In the later part of 2020, Friska shut down its Birmingham and Manchester locations after it entered a voluntary arrangement.
And then in July 2021, it went under acquisition, but the founders still retained two sites in Bristol but under a new name.
Before it went under, Friska managed to also raise £3M in a funding round in 2017. (Source: Crunchbase)
EventsTag
Founder(s): Ollie Harridge and Dan Strang
Founded: 2012
Shutdown in: 2021
Funding Amount: $2.5 Million
Industry: Tech
Reason for failure: Went under acquisition
EventsTag was known for its unique tools that made it easy for people to share their events on social media. The company had some good rounds in raising equity investment and even had 3 rounds with Mercia, venture capital, and private equity firm. (Source: Beauhurst)
Was among the companies that attended the Internet of the Things accelerator program in Wayra London, as well as data democratization and 5G events.
EventsTag went on to acquire Accelerated Applications, a software startup that was into event management.
No one saw it coming or knew why, but in January of 2021, EventsTag first went into liquidation and later in March was acquired by Inurface Media, a company that is into providing digital signage. Inurface Media merged EventsTag with its sister brand, We Are Interact, which formed Xi. (Source: B4)
EventsTag, while it was still in operation, was able to raise $2.5 million in funding.
The last funding rough was raised in 2015. (Source: Crunchbase)
Ralph & Russo
Founder(s): Micheal Russo and Tamara Ralph
Founded: 2006
Shutdown in: 2021
Funding Amount: £40 Million
Industry: Clothing
Reason for failure: Pandemic and lack of funds to continue with the business
The Ralph and Russo brand was into luxurious clothing before the Covid-19 pandemic hit and changed the business world.
During a pandemic, the company did open their showroom at times (as per rules) and even went online to sell their products, However, it was not enough to keep the company afloat. Finally, in March 2021, the company entered into administration.
Their reason for the closure was that they needed time to restructure their business as well as see if they could raise more money to be able to continue with the business in the future. (Source: Cityam)
Ralph and Russo were acquired by Retail Ecommerce Ventures in July of the same year to join their already existing portfolio.
Ralph and Russo had raised a total of £40 million in funding. Their last funding round one was raised in 2019. (Source: Crunchbase)
Berg
Founder(s): Matt Webb
Founded: 2005
Shutdown in: 2014
Funding Amount: $1.3 Million
Industry: Tech
Reason for failure: Lack of patronage
Berg was once a revolutionary idea in the world of printing. The company made it easy for people to own printers that they could use for various purposes.
The company’s famous product was a cloud-based product called Little Printer.
Little Printers looked like the receipt printers we have these days.
With the device (Little Printers), users could print things from social media, the web, and across other devices.
The printer provided its users with a retro type of printed paper that could be used by users people as a social letterbox.
The CEO, Matt Webb, in September 2014, made an announcement on the company’s blog about its intention of going into hibernation.
His reason was the company had not been able to sustain the business due to a lack of patronage. (Source: FastCompany)
While it was still in business, Berg was able to raise $1.3 million in funding with the last seed raised in 2013. (Source: Crunchbase)
Igloo Energy
Founder(s): Mathew Clemow, Henry Brown, and Duncan Ellis
Founded: 2016
Shutdown in: 2021
Funding Amount: $791.7K
Industry: Energy
Reason for failure: The high cost of gas
For a once successful and popular energy supplier like Igloo Energy to fail, shows that any startup can fold even with the best intentions.
Based in Southampton, the company was poised to help its users cut down on their energy consumption so as to cut down on emissions and costs.
They had in place smart meter data that helped users achieve this purpose.
Igloo Energy raised some equity funding and a grant that it used in developing its prototype self-learning data platform.
The company even made it to the UK’s most impressive Startups 100 list in its early stage of operation.
Igloo Energy entered into administration in 2021 alongside other energy suppliers like Symbio Energy and Enstroga.
Together, these companies supplied energy to 233,000 UK homes with Igloo supplying the highest with 179,000. The reason for the closure was as a result of the high price of gas in the sector. (Source: Inews)
Igloo Energy was very promising in that it raised in 2 rounds the sum of $791.7k in funding. The last one was raised in 2019. (Source: Crunchbase)
Wooha Brewing
Founder(s): Heather McDonald
Founded: 2014
Shutdown in: 2021
Funding Amount: $2.9 Million
Industry: Brewing
Reason for failure: Lack of funds and the pandemic
Wooha Brewing was into the production of natural and vegan-friendly lagers and ales.
The brewing company was quite popular back in the day and was even considered to be one of the fastest-growing beer companies in the UK.
It succeeded in raising equity investments and intended to use the last one it raised in 2020 to promote its activities, build its sales team, and support the company’s plan to expand internationally.
Like many other companies, Wooha Brewing got hit by the pandemic, especially when bars and most hospitality businesses were forced to shut down.
Several attempts by Wooha Brewing to keep the business afloat by partnering with Amazon Prime, Ocado, Wetherspoons and even securing some trade deals still did not prevent it from entering administration. (Source: Scottish Financial News)
Wooha Brewing could not continue running the business as it cited cash flow as its major challenge. Brexit coupled with the pandemic also resulted in making the company accept the acquisition proposal by North Coast Brewing. (Source: Insider)
The brewing company had prospects and was able to raise $2.9 million in total funding. The last one was in 2020. (Source: Crunchbase)
Crowdmix
Founder(s): Ian Roberts and Gareth Ingham
Founded: 2013
Shutdown in: 2016
Funding Amount: £14 Million
Industry: Music
Reason for failure: Poor management of funds
Crowdmix was supposed to be a music sharing and streaming platform that users could use to discuss their favorite bands.
Crowdmiz first made available a beta version of the app and only invited musicians and DJs to try it out with the intention of later releasing the official app which it never did.
The company founders had poor money management skills that the £14 million investors invested was lavished without them having a tangible product to present to the public.
Apart from lavishing on flamboyant office decorations and parties, the company was also overstaffed and was even offering its staff international travels.
Even after the founding CEO was made to resign, no one saw it fit to acquire the company. (Source: Insider)
Crowdmix in one round of funding raised a total of £14 million in 2016. (Source: Crunchbase)
Karhoo
Founder(s): Daniel Ishag
Founded: 2014
Shutdown in: 2016
Funding Amount: $39 million
Industry: Transportation
Reason for failure: Lack of fund
Karhoo is another UK business that could not make it past two years of inception. The company was a price comparison and cab aggregator tool. It had an app that users could use to check for taxis that are licensed, and regulated as well as private vehicles that were available for hire.
With Karhoo, it was possible for users to see the location and prices of different vehicles on a map and then book the one they wanted. It charged a 10% commission for any vehicle that was booked through its app.
The sad truth is that although Karhoo tried to stay in business for 2 years, the company was actually out of operation within 6 months. Even with useful and innovative offers, Karhoo couldn’t take on Uber even with Uber’s 20-25% commission. And so in November 2016, the company announced that it was shutting down its services due to a lack of funds to continue running the business. (Source: TechCrunch)
However, while it was still in business, Karhoo was able to raise the sum of $39 million in funding in 2015. (Source: Crunchbase)
HitMeUp
Founder(s): Charlie Pool
Founded: 2011
Shutdown in: 2015
Funding Amount: $50,000
Industry: e-Commerce
Reason for failure: Lack of experience
Last on our list is HitMeUp, which was a web-based e-commerce business that specialized in promoting instant and area-based businesses.
With them, clients could catch deals located in their area and have the opportunity to grab low prices. Businesses, on the other hand, were able to get buyers that were ready to buy on the spot.
The challenge HitMeUp encountered as admitted by its founder, Charlie Pool, was that he had no knowledge of technology before venturing into the business. And so he had to rely on people to develop his business vision.
The sad thing was that it took so much time and before the vision could be actualized, the cost was already inflated. HitMeUp launched 3 versions, but each one failed to make it because of how uninformed and unprepared the company was. (Source: Failory)
HitMeUp raised a funding sum of £50,000 as a pre-seed in 2013. (Source: Crunchbase)
Conclusion:
There are many reasons businesses and startups fail to make it. Some spend years designing and developing their products and services only to discover that no one really needs or wants them.
For others, lack of or mismanagement of funds hinders them from realizing their business dreams. While for many others, the challenges posed by the Covid-19 pandemic ended their business journey.
Whatever be the reason, the sad truth is a business can have all it takes and still fail to make it successfully. But this is not to deter you from starting your own business.
If others are making it, there is a high possibility that yours too will make it.
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