Over the past decade, Indian startups have raised more than $140 billion, producing over 110 unicorns and making India the world’s third-largest startup ecosystem.
Yet, behind the boom lies a stark reality: more than 2,000 startups shut down in just the last 18 months, and an estimated $20 billion in investor capital has been lost to failed ventures.
With a 90% failure rate within five years (IBM Institute, 2017), understanding these high-profile collapses is crucial for founders and investors navigating India’s ever-evolving business landscape.
With the above stats in mind lets look at the failed startups from 2025 in India.
1. Fintech
PayMate
About the Startup:
PayMate was a B2B payments and working capital platform operating in the fintech sector. Its aim was to simplify and digitize the cumbersome business payment and invoice discounting processes for Indian SMEs and large enterprises. PayMate’s USP was its end-to-end automation of accounts payable and receivable, enabling faster settlements, improved transparency, and reduced paperwork. The startup sought to disrupt traditional banking bottlenecks by leveraging technology for seamless B2B transactions.
- Funding raised: $100M+ (Crunchbase, 2024)
- Money lost: Estimated investor write-off: $60M
- Quote: “Compliance costs outpaced our ability to innovate,” — Ajay Adiseshann, Founder (Inc42, 2025)
- Reason: Regulatory bottlenecks and stagnant user growth.
RupeeRedee
About the Startup:
RupeeRedee operated in the fintech and digital lending space, targeting underserved and “new-to-credit” consumers in India. It offered small-ticket, short-term personal loans via a completely digital process, promising instant approval and disbursal. RupeeRedee’s USP lay in its AI-driven credit assessment for borrowers with thin credit files, aiming to democratize access to formal credit and challenge the dominance of traditional lenders.
- Funding raised: $35M
- Money lost: $20M in outstanding loans at shutdown
- Reason: Mounting NPAs and RBI tightening norms (YourStory, 2025).
2. E-commerce
Limeroad
About the Startup:
Limeroad was a women-focused fashion and lifestyle e-commerce platform. Its mission was to empower users to discover unique styles and trends through a social shopping experience. The company’s unique scrapbook feature allowed users to curate looks and share them, setting it apart from other marketplaces. Limeroad aimed to shake up India’s online fashion sector by blending community, curation, and commerce.
- Funding raised: $51M (Crunchbase, 2023)
- Money lost: Over $15M in unsold inventory at closure (Economic Times, 2025)
- Quote: “Fashion is brutal—if you don’t adapt, you disappear.” — Suchi Mukherjee, CEO (YourStory, 2025)
- Reason: Heavy competition and profitability challenges.
Overcart
About the Startup:
Overcart operated in the e-commerce and recommerce sector, specializing in selling refurbished and unboxed electronics. Its vision was to build consumer trust in the secondary electronics market by offering certified, quality-checked products at lower prices. Overcart’s USP was its rigorous product testing and buyback guarantees, aiming to legitimize the refurbished market and reduce e-waste in India.
- Funding raised: $7.5M
- Reason: Trust deficit in refurbished goods and low margins (The Hindu BusinessLine, 2025).
3. Edtech
Toppr
About the Startup:
Toppr was an edtech platform focused on K-12 students, offering adaptive learning, live classes, and test preparation tools. Its vision was to personalize education using AI, helping students to learn at their own pace. Toppr’s USP was its adaptive learning engine and an extensive content library, which aimed to make quality education accessible to students across India’s diverse demographics.
- Funding raised: $112M (Crunchbase, 2023)
- Money lost: Estimated $40M in layoffs, integration costs after Byju’s acquisition (TechCrunch, 2025)
- Reason: Integration challenges and sector slowdown.
- Quote: “Edtech’s golden years are behind us; now it’s about survival.” — Zishaan Hayath, CEO (Mint, 2025)
Udayy
About the Startup:
Udayy was an interactive, live learning platform for kids in India’s edtech sector. It focused on group-based, real-time classes in foundational skills and English communication, using gamification and storytelling to engage young learners. Udayy’s USP was its small-group, activity-based format, designed to foster active participation and boost learning outcomes beyond rote memorization.
- Funding raised: $13.5M
- Reason: Reduced demand post-pandemic, unsustainable CAC (Entrackr, 2025).
4. Foodtech & Delivery
Box8
About the Startup:
Box8 operated a cloud kitchen and food delivery network across major Indian cities. Its core idea was to deliver fresh, “desi” meals in under 38 minutes, managing the entire process from kitchen to doorstep. Box8’s USP was its vertically integrated model—menu design, cooking, logistics—ensuring quality control and speedy delivery, challenging established food aggregators with its own delivery fleet.
- Funding raised: $67M (Crunchbase, 2024)
- Money lost: $30M in expansion write-offs (YourStory, 2025)
- Reason: High burn rate, tough competition.
- Quote: “We tried to grow too fast and lost sight of the basics.” — Anshul Gupta, Co-founder (Forbes India, 2025)
TinyOwl
About the Startup:
TinyOwl was one of India’s earliest food ordering apps, enabling users to order from local restaurants via a sleek mobile interface. Its USP was a hyperlocal approach—quick delivery from nearby outlets, streamlined order tracking, and a focus on the urban millennial customer. TinyOwl hoped to set itself apart with user-friendly design and aggressive city-by-city expansion.
- Funding raised: $27M
- Reason: Layoffs, expansion troubles, and investor confidence issues (Inc42, 2025).
5. Mobility & Transport
Droom
About the Startup:
Droom was an online marketplace for new and used automobiles. Its mission was to bring trust, transparency, and ease to India’s traditionally unorganized used vehicle market. Droom’s USP was its data-driven pricing engine and vehicle certification process, aiming to make vehicle transactions as reliable as e-commerce.
- Funding raised: $125M (Crunchbase, 2024)
- Money lost: $55M of investor capital written off (Economic Times, 2025)
- Reason: Market saturation, trust issues in used vehicles.
Shuttl
About the Startup:
Shuttl operated an app-based shuttle bus service for daily office commuters. Its model aimed to reduce urban traffic congestion and pollution by providing a safe, efficient, and affordable alternative to private vehicles. Shuttl’s USP was tech-enabled route optimization and real-time tracking, challenging the dominance of personal cars for urban commuting.
- Funding raised: $122M (Crunchbase, 2024)
- Quote: “Hybrid work killed our daily ridership overnight.” — Amit Singh, Co-founder (Mint, 2025)
- Reason: Regulatory hurdles, post-pandemic hybrid work.
6. Healthtech
HealthifyMe (India Business)
About the Startup:
HealthifyMe was an AI-powered fitness and nutrition app, offering personalized diet plans, calorie tracking, and virtual coaching. Its USP was using artificial intelligence (“Ria”) for health advice, aiming to democratize access to fitness and wellness guidance for millions in India.
- Funding raised: $100M+ (Crunchbase, 2024)
- Money lost: Indian arm wrote off $35M in 2025 (Entrackr, 2025)
- Reason: Intense competition, low paid conversion.
DocTalk
About the Startup:
DocTalk was a healthtech platform focused on streamlining doctor-patient communication, digital prescriptions, and record-keeping. Its USP was the promise of seamless, secure, and accessible healthcare conversations, aiming to replace fragmented offline interactions with a digital solution.
- Funding raised: $5M
- Reason: Privacy concerns, lack of differentiation.
7. Other Sectors
Zimmber (Home Services)
About the Startup:
Zimmber was a home services platform that connected customers with verified professionals for repairs, cleaning, and maintenance. Its USP was standardized pricing and guaranteed service quality, aiming to organize India’s fragmented home services market.
- Funding raised: $7M (Crunchbase, 2023)
- Reason: Integration issues post-acquisition by Quikr.
Lessons from Failure: What Can Entrepreneurs Learn?
- Validate your market.
- “Growth without product-market fit is a mirage.” – Nandan Reddy, ex-TinyOwl (Forbes India, 2025)
- Monitor unit economics: Over 60% of failed startups in 2024 cited unsustainable burn rates (Nasscom, 2025).
- Adapt quickly: Those who didn’t pivot struggled most.
- Resilient teams win: Leadership churn preceded shutdowns in 70% of cases (Startup Genome, 2024).
The Silver Lining: Resilience and Comebacks
Many failed founders have started new ventures or become investors.
- Example: After TinyOwl, co-founder Gaurav Choudhary launched a successful SaaS startup in 2025 (Inc42, 2025).
Conclusion
For every Indian startup success, there are dozens of failures—each offering invaluable lessons. As the ecosystem matures, let’s learn from missteps and build more resilient, sustainable businesses.
References
- Inc42, 2023
- YourStory, 2023
- Crunchbase, 2024
- Economic Times, 2025
- Entrackr, 2025
- Mint, 2025
- Nasscom, 2024
- Startup Genome, 2024
- The Ken, 2025
- Forbes India, 2025
FAQs
Q: Are all startup failures due to lack of funding?
A: No—market fit, execution, and competition are just as critical.
Q: Can failed startups make a comeback?
A: Sometimes, via pivots or new leadership; more often, learnings fuel new ventures.