Home Startup Shutdown

Indian startup ecosystem is very interesting to watch. With the rise of every new startup, we can witness the failure of one or the other startup at the same time. If we look at the report by Institute for Business Value and Oxford Economics, it highlights that more than 90% of startups fail within the first five years. Whereas, 2016 NASSCOM states that the reason behind the failure of startups in India is none other than lack of innovation which led some startups to shut their shops within a few years of their inception.

In 2016, it was reported that between January and August, 29 startup shutdowns in India took place. Startup shutting their shops in 2017 (from January to July) have a no different story to tell. Until July 2017, the year has seen the total of 11 major startups closing down their operations and winding up some part of their business. The Stayzilla shutdown has been the most talked about affair. If we look at the main reason for startup shutdowns, it is none other than cash crunch. Today’s investors are taking less risk and cautiously investing in startups.

We at IndianWeb2 has curated the list of startups that end up breaking dead instead of breaking even.

Finomena

Founded in: 2015
Founded by: Abhishek Garg and Ridhi Mittal
Headquartered in: Bengaluru
Shut Down in: July 2017

Though its still has to come officially from the company officials about the shutdown announcement, its quite evident that Finomena users could not able to log in on its app. Moreover the startup’s Google business listing also shows that its permanently closed.

Founded by IIT-Delhi graduate Abhishek Garg and Stanford graduate Ridhi Mittal in 2015, Finomena had shut its shops after it failed to raise series-A funding. It is said that the main reasons for shutdown were the high cash burn and moreover cost of acquisition was high for any plausible buyout.

The Bengaluru-based fintech startup used to facilitate small ticket loans to students and young professionals for buying electronic devices and appliances. For the same, startup had inculcated data and machine learning to reassess the creditworthiness of borrowers for the disbursal of loans.
The startup which was funded by notable private equity firm Matrix Partners was the only fintech company from India to have made it to “International Innovator of the Year award” by LendIt USA 2017, the world’s largest show in lending and fintech.

Finomena was different from P2P lending firms but was in competition with rivals such as ZestMoney, CashCare, Capital Float, and Lendingkart, among dozen other alternate loans startups that have cropped up in the country.

Surpluss

Founded in: 2014
Founded by: Amit Gupta
Headquartered in: New Delhi
Shut Down in: July 2017

Owing to internal business issues aggravated by demonetization, an online retail store for refurbished electronics, Surpluss has shut their operation. Surpluss used to sold refurbished and surplus products ranging from mobile phones and tablets to fashion apparel.

Owned and operated under, Pluss Digital Ventures Private Limited had directors such as SN Rai, co-founder of Lava Mobiles, Amit Gupta, former director Channel Strategies at Samsung India and HS Bhatia, founder of Green Lava, a battery rejuvenation business.

Cardback

Founded in: 2012
Founded by: Nidhi Gurnani and Nikhil Wason
Headquartered in: New Delhi
Shut Down in: June 2017

Online platform for loyalty cardholders Cardback has shut down its operation due to fund crunch and less demand in India for multiple credit cards. During his five year journey, the startup had raised $170Kfrom some of the prominent angel investors including Rajan Anandan, Sunil Kalra, and Alok Mittal. It was a platform for credit, debit and loyalty cardholders to check rewards.

Eatonomist

Founded in: November 2014
Founded by: Anisha Dhar and Nupur Khanna
Headquartered in: Gurugram
Shut Down in: May 2017

An online food delivery startup, Eatonomist has recently shut down its operation. The startup used to deliver meals prepared in its own kitchens. Founded in November 2014 Eatonomist was operational in Gurgaon and Delhi and followed a full-stack business model wherein it controls the kitchens and delivery services. According to the reports, one of the Eatonomist co-founder, Anisha Dhar has joined UberEATS, a food delivery service launched by Uber.

In 2016, the Gurugram-based startup had raised an undisclosed amount in seed funding from MCube Capital Advisors Pvt Ltd. However the firm failed to raise much-needed follow-on funding, and this might be one of the reasons for the shutdown.

HotelsAroundYou

Founded in: 2013
Founded by: Harsha Nallur, Mohsin Dingankar and Animesh Chaudhary
Headquartered in: Mumbai
Shut Down in: May 2017

Owned and operated under, Instant Hotels Around You Pvt Ltd, HotelsAroundYou has recently ceased its operations as it could not raise follow-on funding. An online platform that allowed room bookings at the last minute had raised an undisclosed amount of seed funding from VentureNursery in 2014. Not only this, startup was also graduated from the accelerator’s fifth batch.

Besides VentureNursery, other prominent investors who backed the firm includes Amit and Arihant Patni and the then founder and chief executive of Aditya Birla private equity group Bharat Banka.

As per the media reports, the firm had closed its functioning in the latter half of 2016, although the timeline was not clear. The company’s website was defunct and the mobile app was not working when an attempt was made to install it from the Android play store.

Turant Delivery

Founded In: 2015
Founded by: Satish Gupta, Ankur Majumder, Siddharth Arora
Headquartered in: Delhi
Shut Down in: May 2017

Turant Delivery, an intra-city logistics company has shut down its operation as the firm was unable to raise funds and burning money blindly was not advisable. The last social media update was on March 28, 2016, but the shutdown was reported in May 2017. The startup used to utilize its technology platform to help customers book and monitor their deliveries on a daily basis. With the help of a zone-based algorithm, it claimed to provide services at less than 15% less. It was operational in Delhi, Mumbai, Bengaluru, Kolkata, and Surat.

Genie

Founded in: 2015
Founded by: Sreekesh Krishnan, Rakesh Mani and Parth Shah
Headquartered in: Chennai
Shut Down in: March 2017

Due to the insufficiency of funds and lack of investor interest, in March 2017, hyper-local delivery startup Genie cease its operations. Founders had announced the close down of the operation through Facebook post. In October 2015, the startup bagged funding from Wayne Burt Group, a Singapore-based group that invests in oil and gas, aerospace and petrochemicals.
 
Genie started off as an on-demand delivery platform for customers. A year after the startup launched Genie for Business to look after on demand, bulk and scheduled orders for restaurants, home bakers and any other business that needed assistance with deliveries. Genie is one among many startups in hyper-local delivery sector who couldn’t survive even for two years since starting their operations.

Cube26

Founded in: 2012
Founded by: Saurav Kumar, Abhilekh Agarwal and Aakash Jain
Headquartered in: New Delhi
Shut Down in: March 2017

Mobile technology startup Cube26 Software Pvt. Ltd has closed its Internet of Things (IoT) business which has led to several job cuts. The firm had raised $7.7 million (Rs 50 crore then) in seed funding from Tiger Global and Flipkart in October 2015. The firm has now decided to solely focus on its software and services business.

Cube26 launched its first IoT product, a Bluetooth-controlled colour-changing smart bulb, in November 2015 under the brand IOTA. The company introduced a new IoT brand, Reos, in August last year, under which it launched a suite of smartphone apps as well as a new version of the smart bulb, Reos Lite.

Stayzilla

Founded in: 2005
Founded by: Yogendra Vasupal (Yogi), Rupal Yogendra, Sachit Singhi
Headquartered in: Bengaluru
Shut down in: February 2017

Yogendra Vasupal, co-founder Stayzilla announced the shutdown of the venture through a Medium blogpost in February 2017. The reason stated by Yogi was the lack of local network effect, inability to expand quickly, and cost effectively plus high costs and low revenues. Not only this, the firm was in plenty of legal trouble, following the startup shutdown with Yogi being arrested on charges of fraud.

Founded as an online travel agency for hotel bookings named as Inasra, Stayzilla was latterly renamed and pivoted to a hotel aggregator model in 2010. Backed by investors including Matrix Partners and Nexus Venture Partners, the company had raised $33.5 million funding in three funding rounds – $500K in 2012, $20 million in 2015 and $13 million in 2016.

Taskbob

Founded in: December 2014
Founded by: Aseem Khare, Abhiroop Medhekar, Ajay Bhatt and Amit Chahalia
Headquartered in: Mumbai
Shut Down in: January 2017

Home and beauty services startup, Taskbob, shuts down its operations due to unforeseen circumstances. According to the media reports, the decision of shutting the operation came after the startup failed to raise fresh funds since February last year.

Startup that had also acquired Zepper, a Bengaluru-based home services startup had raised Rs 28-crore Series A funding from Ivy Cap Ventures and existing investors Orios Ventures Partners and Mayfield India.

Prophesee

Founded in: 2014
Founded by: Ishaan Sethi, Harshil Gurha, Jitesh Luthra
Headquartered in: Delhi
Shut Down in: January 2017

Prophesee has recently shut down its operation. The reason for shutdown remains unknown.The startup empowered brands with data-driven insights that allow managers to compare and analyse digital campaigns and execute directly from the platform. The firm had raised $516K funding in an angel round from Indian Angel Network (IAN), Stanford Angels and Entrepreneurs India (SA&E India). Ajay Lavakare, Bikky Khosla and Satveer Thakral were the lead investors in the company.

Our Take

Plenty of startups in India are failing to sustain its existence in the last couple of years, particularly in food-delivery segment, hyperlocal, etc. Last year, several food-tech startups shut down its operations including Bite Club, an another Gurgaon-based food delivery startup, along with others similar ones such as Frsh.com, iTiffin, Zuper Meal, MealHopper, and and Zeppery, which shut shop due to poor unit economics and unsustainable business models.

On the one hand, the government is making its efforts to provide entrepreneurs with the adequate resources. It has recently launched Startup India Online Hub to encourage entrepreneurs and business in the emerging economy.
But, as it is said startup shutdowns are the part of the business ecosystem, now we have to wait and watch what 2017 hold for these upcoming startups. Time will only tell that how many more wickets are gonna fall in coming months.

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