Failed Startups of India – Many people are born for business and most of the wanted to be entrepreneur and every single day new start-up are born in India with the positive note and hope. Most of the start-up having focus to solve the daily or routing problem.
If we see the past data, in last year more than 1500 startup were born and closed their shutter because of many reasons like,
Table of Contents
Reasons behind Failed Start-ups of India.
- No or Less market demand
- If the start-ups fail to solve the daily or routine problems, then it will not be having good
demand and thereafter due to low demand they need to close.
- Weak -Business model
- Product poorness.
- Poor or inferior marketing
- Poor knowledge of Economics
- High and outrages cash burn rate
- No and inferior Financing
- Intense and big Competition
- Ignore the need or demand of customers
- Some Legal challenges
- lack of team bonding or disharmony within investor, team.
- Less or no use of advisor or networking.
It doesn’t matter that Start-up is failed or grown, the main part of start-up is get in on the board
for. Most of the start-up failed within four to five years only due to lack of fund, data , knowledge
of many factors. Get startup funding from govt.
26 Failed Startups in India Reasons of Unsuccess & case study.
1- Guruji.com -2006 – The reasons for its failure.
Founder: Guruji.com founded by 2 (Two) IIT Delhi graduates. Anurag Dod and Gaurav Mishra. It was India’s first search engine but crawler-based and it was fully developed & designed in India for the Indian people.
One of the main reason being faild is that CEO Anurag Dod was arrested on the charges of copyright infringement.
2- Nivio-2004 – Failed startup reason.
Founder: Nivio was founded by Mr. Sachin Dev Duggal & Mr. Saurabh Dhoot in the year of 2004 Problem solving statement: Windows-based online desktop that enabled people and users to access a virtual desktop from any device which should be connected to the internet. Fund Raising and funded by Videocon and AEC Partner. Even though Nivio had technology
patronship with Microsoft and Airtel. Nivio was closed the operation without any news in the year of 2013.
3- Wishberg reasons for shut down.
Founder Wishberg was founded by Mr. Pravin Jadhav and Mr. Kulin Shah in the year of 2011. This start-up was known in the past know by the name of Tyche’d. Wishberg connect the same dreams / passion people. The main investor for wishberg was Mr.
Vijay Sharma (Paytm). In the mod of 2014 wishberg announced the shut down through a blog-post.
4- Etable – Why eatable shut down its operations.
Founder: Etable was founded by Maninder Singh, Bharath Belur, Rohit Iyer and Madiman in 2012. Etable had a platform where foodies can connect and do the chatting, revies and recommendation also. The startup of Etable were failed and closed in 2014.
5- Zoogaad – Failed startup of India.
Zoogad was AI based start-up founded in the year of 2014 and user can have customised news
and stories. After two- three years of operation the zoogad was closed.
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6- SpoonJoy – Failed Indian stratup.
Founder: Sponjoy was founded by Manish Jethani in the year of 2013. SpoonJoy mainly worked on the subscription-based model with the one more service is that ondemand lunch and dinner. The main investor for spoonjoy were Sachin Bansal, r Abhishek Goyal, Sahil Barua & Mekin Maheshwari. But unfortunately, the high funded start-up closed in the year of 2014.
7- Dazo – failure reason.
Founder: Dazo was founded by Mr. Shashank Shekhar Singhal & Mr. Monica Rastogi in 2014. Before dazo, this startup was known by Tapcibo. The main aim of this startup was curated meal, this platfor enable user to get fresh meals and food from restaurants on-demand. The main investor for this start-up were Rajan Anandan, Aprameya Radhakrishna, Gaurav Munjal, and others also.
8- Eatlo – One of startups that failed
Founder: Eatlo was founded by Mr. Rahul Harisanka and Miss. Sai Priya Mahajan in the year of Eatlo was mainly in the business of delivering the handpicked meals from the different chefs to the many user. As per last report they used to delivery 1200 meals per day. Due high and strong competitors etalo could not survived and closed the operation in the year of 2015.
9- PepperTap – Shutdown startups of India.
Founder : PepperTap was founded by Mr. Milind Sharma and Mr. Navneet Singh in the year of PepperTap is Gurugram-based star up mainly engaged in grocery delivery . They were operating through more than 15 cities. The Main investor for this startup were like Sequoia Capital, SAIF Partners, Snapddeal &
10- InnoVen Capital – Startup failure reason
After operating two this startup were closed the operation in the month of 2016-2017
11- LocalBanya failed startup of India due to less cash flow.
Founder: LocalBanya was founded by Mr. Amit Naik, Mr. Karan Mehrotra and Mr. Rashi Choudhary in the year of 2012.
Local banya was mainly in to business of delivery of a range of products including fruits, vegetables, personal care & kitchenware too. The main investors for this start-up were Karmvir Avant Group, Oliphans Capital & Brand Capital. After operating few years this start-up also closed due to less cash flow.
12- Frankly.me – Shut down startup in India.
Founder: Frankly.me was founded by Mr. Nikunj Jain and Mr. Abhishek Gupta in the year of
2014. Frankly.me startup became a popular application because of their USP the main usp was they
allow user’s to talk celebrities & public figures like Delhi’s CM Mr. Arvind Kejriwal, many others
also. After few years this start-up also shut down their operation.
13- TinyOwl – unsuccessful startup
Founder : TinyOwl was founded by Harshvardhan Mr. Mandad, Mr. Saurabh Goyal, Mr. Gaurav Choudhary, Mr. Shikhar Palliwal and Mr. Tanuj Khandelwal in the year 2014. The main investors for this startup were Sequoia Capital, Matrix Partners and Nexus Venture Partners. The main aim and operating success of this start-up were to restaurant and delivery. Later on, this start-up was acquired by Roadrunner in the year of 2016 and the later on start-up were completely shut down the operations except the city of Mumbai.
14- Overcart – Reasons behind failure.
Gurugram-based pre-owned products marketplace Overcart was founded by Alex Souter and Saptarshi Nath in 2012. The startup offered an ecommerce platform for over-stock, refurbished and pre-owned products. Overcart had the distinction of graduating from GSF Accelerator’s first batch. With a presence across 55 cities in India through its walk-in product repair services, the startup noted a steady growth.
Furthermore, the ecommerce startup had managed to raise $3 million from investors like JSW Ventures, Omidyar Network and Sattva Capital in 2016. While there were a lot of speculations around the reasons for shutting down of the startup but
there was no clarity about the reasons.
15- Taskbob – Failed startup due to tough competition.
Mumbai-based home services startup Taskbob was founded by Aseem Khare, Abhiroop Medhekar, Ajay Bhatt and Amit Chahalia in 2015. Taskbob facilitated high-quality professional services including drivers, electricians, plumbers, carpenters and maids on demand. The startup had managed to serve over 1.5 lakh orders during the two years of its operation before it shut down in 2017.
Taskbob had racked in nearly $6 million across all funding rounds from marquee investors including Orios Venture Partners, IvyCap Ventures, Mayfield Fund and Google Launchpad Accelerator. The startup had also managed to acquire its Bengaluru-based rival in 2015. The reasons for shut down as claimed by media reports included the inability of the startup to
scale profitably due to tough competition and low margins.
16- Stayzilla – Shut down due to slow growth rate.
Bengaluru-based hotel aggregator Stayzilla was founded by Yogendra Vasupal, Rupal Yogendra and Sachit Singhi in 2005. With a vision of becoming India’s largest marketplace for ‘stays’, Stayzilla was able to add over 8,000 homestays across the country.
While most startups generally fail within the first five years, Stayzilla was an outlier. It scaled new heights in the Indian hospitality ecosystem and established itself as a leader in the industry before it shut down after a decade of effort in 2017.
During the course of twelve years, Stayzilla had managed to raise $34 million across all funding rounds and was backed by investors like Matrix Partners India, Nexus Venture Partners and Sequoia Capital. Prior to shutting down, Stayzilla had raised $13.5 million in series B round from Matrix Partners and Nexus Venture Partners. Stayzilla’s founder Yogendra Vasupal announced the shutdown of Stayzilla through a Medium blog post which stated lack of local network effects, inability to expand quickly and cost-effectively as some of the reasons for the decision.
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17- PropheSee – Failed data analytics startup
Delhi-based data analytics startup PropheSee was founded by Harshil Gurha, Ishaan Sethi and Jitesh Luthra in 2014. The startup enabled brands to discover and analyze data from across different social media platforms in order to create effective strategies through its SaaS-based platform.
The SaaS startup had raised a total of $500,000 in funding from a number of investors from the Indian Angel Network. However, the reason for the startup’s shut down remains unknown.
18- Yumist – Indian startups died chasing the high growth
Gurugram-based foodtech startup Yumist was founded by Alok Jain and Abhimanyu Maheshwari in 2014. The startup offered meals to the customers through its online platform. The startup managed to raise $4.4 million across funding all funding rounds from investors like Unlazier Ventures and Orios Venture Partners.
Stating the reasons for shutting down in a blog post, Yumist founders blamed their high growth model that lead to high burn rate. It is evident that too many Indian startups died chasing the high growth in the Indian food delivery space.
19-Shopo – Startup that failed due to Lack of funding.
Chennai-based Shopo was founded by Theyagarajan S and Krithika Nelson in 2011. Shopo started as an online marketplace for traditional Indian hand-made products by Indian designers. It was acquired by Snapdeal in 2013 and relaunched as a zero-commission marketplace which enabled small and medium-sized businesses to chat, buy and sell.
In 2017 as Snapdeal was fighting for survival in the Indian ecommerce market, it had to shut down Shopo in a bid to cut costs and reduce losses. Shopo’s innovative model enabled it to raise funds from prominent investors including Sequoia Capital and SRI Capital’s Sashi Reddi. 2018
20- Just Buy Live – shut down due to its unscalable business model
Mumbai-based e-distributor platform Just Buy Live was founded by Bharat Balachandran and Sahil Sani in 2015. The startup provided a platform that connected the shopkeepers directly with the brands and distributors. Just Buy Live claimed to have aggregated brands like Apple, Xiaomi, Samsung, P&G, Coca Cola and Oppo, among many others. Furthermore, the startup had managed to raise $120 million across multiple funding rounds from investors like Alpha Capital and Ali Cloud Investment.
According to media reports, Just Buy Live may have been shut down due to its unscalable business model which led to negative cash flows.
21- Shotang – Indian startup that didn’t sustained.
Bengaluru-based B2B ecommerce startup Shotang was founded by Anish Basu Roy and Anterpreet Singh in 2013. Through its ecommerce platform, Shotang brought together retailers, distributors and manufacturers to enable them to discover, transact and manage their businesses online.
The startup had managed to secure over $6 million across multiple funding rounds from investors including Exfinity Venture Partners, Touchstone Equities, Patamar Capital and Startup Equity Partners. Even with multiple funding rounds, the startup could not manage to sustain itself and was shut down in 2018, according to media reports.
22- Zebpay India – failed crypto startup due to RBI’s circular.
Founded by Mahin Gupta, Sandeep Goenka and Saurabh Agarwal in 2014, Zebpay was once India’s largest crypto exchange. The platform enabled users to buy and sell a range of cryptocurrencies including Bitcoin, Ethereum, Bitcoin Cash, Ripple and Litecoin, among others. Zebpay was among several crypto exchange platforms in India that was forced to shut down
after RBI’s circular prohibited any dealings in Virtual Currencies in 2018.
23- BabyBerry – Reasons of shut-down.
Bengaluru-based online parenting startup BabyBerry was founded by Bala Venkatachalam, Dev Vig and Subhashini Subramaniam in 2014. BabyBerry offered an online platform for new parents that provided holistic child growth and development through various features like digital vaccination chart, health records management and doctor discovery.
While the reasons for BabyBerry shutting down remain unclear, a report by TechCircle suggests that BabyBerry did not have a revenue model to it. Before shutting down, the startup had raised $1 million in funding from a group of angel investors led by Nitin Bagmane in 2016.
24- Doodhwala – Failed startup of India.
Bengaluru-based milk delivery startup Doodhwala was founded by Aakash Agarwal and Ebrahim Akbari in 2015. The startup worked on a subscription-based model and offered various grocery products across categories like baked items, milk, meat, fruits & vegetables and personal care, among others.
According to CrunchBase, Doodhwala had raised over $4 million across multiple rounds from investors like Mumbai-based VC firm Omnivore Partners. In October 2019, it was reported that Doodhwala had halted its delivery operations across three
operational cities including Bengaluru, Hyderabad and Pune. According to the report, Doodhwala’s delivery operations were handed over to its rival Freshtohome.
25- Buttercups – Why it shut down?
Bengaluru-based online lingerie brand Buttercups was founded by Arpita Ganesh in 2014. The startup provided exclusive lingerie buying experience to its customers through its online platform.
Buttercups was backed by some of the prominent angel investors in India including Sequoia Capital’s Rajan Anandan, Fireside Ventures’ Kanwaljit Singh, Anand Chandrasekaran, among others. The online lingerie brand had managed to raise $1 million in funding before it shut down.
While Arpita Ganesh announced the shutdown of Buttercups on her LinkedIn page, she did not disclose the reasons behind her decision.
26- DocTalk – Failed healthtech startup
Mumbai-based Healthtech startup DocTalk was founded by Akshat Goenka, Vamsee Chamakura and Krishna Chaitanya Aluru in 2016. It enabled the patients to connect with doctors while also providing the feature to share medical reports and obtain prescriptions through its mobile app. This Y Combinator-backed startup had raised $5 million from a range of investors including
Matrix Partners, Khosla Ventures, Vy Capital and Altair Capital, among others. According to media reports, this well-funded healthtech startup failed to pivot its business model and could not achieve the acceleration it needed.
Even with a less than 10% success rate, the Indian startup ecosystem keeps on growing and adding new startups every year. This is a testament to the iron will of the Indian entrepreneurs and their commitment towards their goals. As the Indian startup ecosystem reaches maturity, we hope that the number of failed startups would decline and entrepreneurs will learn not only
from their own mistakes but also from their fellow entrepreneurs.