case study of failed startup in india

38 Famous Failed Startups & Businesses in India

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).

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.

In the Article (Quick Access)

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, 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 )

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.

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.

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 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)

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.

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, 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. 

Y umist’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 )

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.

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.

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 )

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 )

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.

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.

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.

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.

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 )

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 )

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 )

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 )

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.

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.

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

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

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

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 )

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  )

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.

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 )

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.

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 )

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.

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 )

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.

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 )

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.

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 )

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.

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 )

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.

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 )

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

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.

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.

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.

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.

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Why Did Foodpanda Failed and What Entrepreneurs Can Learn From It?

Harshit Verma

Online delivery apps are doing really well. In a world where we all are constantly online and searching for a lot of information, it has become a normal activity to order online. Companies like Amazon, Flipkart and others are now going to the marketplace for every millennial. They are easy to use, convenient to scroll and a heaven for the shopaholics. They are so easy and convenient that people today are getting addicted to the technology of online delivery. This newfound business is doing really well as the whole economy is shifting to a digital place. Everything is online, choosing an item, its delivery tracking and the payments for the same.

Not just that, entrepreneurs from all over the world then thought of inventing further in the direction. Some geniuses thought to deliver food. It was not considered a good idea in the beginning, but as people gave feedback and the delivery services improved, the idea started to seem a viable option. Then it struck, and many companies emerged to deliver food to the public.

There was Zomato, Swiggy, Foodpanda and the likes. All of them competed for one single thing, the largest market share in the food delivery sector. As the competition for market share transformed into a war, it became necessary for some companies to vanish. This competition led to the death of many food delivery companies and led many companies to go bankrupt. One of the companies that vanished from the market was Foodpanda. This article talks about the company and what were the reasons for its failure. Let us see the story in words.

A Little Brief About FoodPanda The timeline of FoodPanda Why Did Foodpanda Fail in India? Lessons Entrepreneurs Can Learn From Failure of Foodpanda

A Little Brief About FoodPanda

People love convenience and why won’t they? Everyone wants convenience at their doorstep and this is why it is a massive opportunity for companies to scale themselves. Food delivery is a massive convenience for people in our society.

Foodpanda is one of the startups that aimed to deliver food to people in a convenient manner. Not just that, Foodpanda also delivered all sorts of grocery items to its users. It is an online food and grocery startup that was owned by Delivery Hero. It has a good stronghold in Asia and the headquarters lies in Singapore. As of now, it is the largest food and grocery delivery platform in Asia. It operates in about 12 markets in the continent of Asia.

The Timeline of FoodPanda

Foodpanda’s business strategy is an interesting read. We can learn a lot of lessons from the business line of Foodpanda. Before we go into the details of how Foodpandafailed, it is important that we know something about the timeline of Foodpanda. Here we will be looking at the humble beginnings of the company and how it went through various acquisitions on the line.

In early 2015 the company bought full stakes in a company called, TastyKhana . Along with that, the food delivery platform Foodpandaalso gained control of Just Ear India , which was a food ordering portal.

These were some moves that the company pulled off to increase revenue and scale of the company. The efforts did not really affect the revenue and the company even had to lay off 300 employees by the end of 2015.

The time was tough for Foodpandaas the company even faced allegations of malpractices. There was news that mentioned Foodpandaas a non-paying restaurant service provider and there were also allegations of fake listings. At that time, the food delivery platform was based out of Gurugram and was spread across 200 cities in the country. That was a tough year, and the next year, that was 2016, Rocket India was looking for a buyer for the company. They set the price really low, at about 10 to 15 million dollars.

A year later, in 2017 the food delivery business was acquired by Ola for a 100 percent equity and that too at a valuation of around 40 to 50 million dollars . Ola further mentioned in public that the company will further invest 200 million dollars to revive the company and make it work sharply.

After this happened and the company started to work slowly but efficiently, they began offering discounts to lure customers to use Foodpanda. Efforts gained some momentum and people started to recognise this as a good platform to order food.

By the end of August 2008, Foodpanda had reached 2 lakh orders per day of operations. It was a huge feat for the company and the stakeholders of the food delivery platform. But soon enough, clouds of uncertainty covered the sky.

Next year, that was 2019, the magnitude of the orders dropped to 5000 per day , in the middle of the year. Reacting to this, Ola made a decision to stop the loss that they were expecting in the near future. Ola, the owner of Foodpanda suspended its operations in the middle of the same year. They also fired some 1500 delivery partners or delivery executives from their job to cut the expected loss in the food delivery venture.

After that time, it is said that Foodpanda existed in a form of a cloud kitchen . A cloud kitchen was a term coined when Foodpanda acquired a company called “ HolaChef ” in October 2018. A cloud kitchen refers to a kitchen that is cloud in nature, which means that they only make food and they outsource the delivery and other services out of the kitchen. As a cloud kitchen business, they had three private label brands under them. In 2019, Notable names of sub-brands included FLRT and The Great Khichdi experiment.

Why Did Foodpanda Fail in India?

At its inception, the company was doing well, making a name for itself and was also working towards building a good brand value . By now we discussed the starting and the ending of this company which delivered food to its consumers. By now you must be wondering how the company failed. After we have thoroughly discussed the timeline in which the company operated, it is now time to see some reasons why it failed. Here we will be listing some of the most common and seen ways or reasons that failed Foodpanda as a food delivery company. These pointers are not just mistakes of Foodpanda but checkpoints for every entrepreneur trying to set up his venture.

If you only look at the successful ventures , you will most probably be looking at fifty percent of the whole story or probably less. So, let us see why the company failed and then we will further discuss some precautions that could have saved the company.

Now, Foodpanda was a big company, not just looking at the capital invested but the number of employees and the scale of operations was huge. Small leaking can play a big role in sinking the ship of Foodpanda but there were mostly massive issues and blunders.

Before we discuss all the factors that lead to this downfall, let us list some of the factors that lead to this situation. There was no single factor that failed Foodpanda, in fact, there were multiple reasons. Those reasons include fake restaurants and orders, technological issues and disorganised business models, lack of leadership and massive miscommunications.

Miscommunications

There was a massive miscommunication issue that went on in the company. According to a report, the company's workers were saved from the fact that the owners have left the company. Key people like Rohit Chadda and Mohit Chadda left the food delivery business back in August 2016 and for a long time, employees were not informed about this development . It was later in time when the issue magnified itself and presented itself as a massive hindrance to profitable operations.

The company employees and workers had to face customers and calls from clients about bad operations. When they are unable to deliver food, they have to comprehend their service with free vouchers. Which was a hit to the profitability of the company. From all the instances above, we can notice that the company was suffering massive communication errors and blunders. Due to this, not only The operations were affected but the credibility and profitability were also affected.

Fake Orders and Lack of Proper Procedures

In another set of events, there was news that broke out. In May 2016, a fast-food chain, hailing from Mumbai ended its partnership with Foodpanda. The company complained that the food delivery partner owed the delivery service company payment of one and a half lakh .

It was also mentioned that Foodpanda was delaying the payment without properly explaining the reasons for such delays. After the investigation, it was found that there was no record of such a transaction in the books of Foodpanda. This was a massive blunder that was taken into notice.

To quote another instance of bad governance, we can look at the Tasty Khana case. Tasty Khana was a venture around food delivery, which was based out of Pune and was acquired by Foodpanda in 2014. The founder of TastyKhana, Shachin Bharadwaj mentioned that he was not satisfied with how the work and operations were done at Foodpanda.

He also mentioned some reasons why he disliked the operations at Foodpanda. Reasons include no check for fake orders, lack of proper procedures in place, and financial irregularities.

Documents with crucial data were accessible to everyone and there was mismanagement at almost every second step of operations. These points came right before the downfall started and was a surety factor of the failure of this company.

Failed to Technologically Upgrade

In the decade when every company moved to digital ways of doing business, Foodpanda’s shift was not strong and effective enough. Believe it or not, every company on the globe is shifting to become a technology company first and then the company which it intends to become.

In the case of Foodpanda, they did change for the better but couldn’t follow up with the demands of a digital-centric consumer. The app was not up to the mark, there were restaurants listed that did not even exist and the whole plan of retaining customers was flawed.

Poor Management

Another reason was poor management, which is also a repercussion of poor communication and predictions. Customers and restaurants who were connected with the delivery company would often argue about the bad service that they provide.

Customers had a rash experience talking to their delivery partners and delayed delivery reasons. Every enquiry that the customers made was a hit on the management team of the company. This was another reason for miscommunication which led to a vicious circle of ineffectiveness and blunders.

Foodpanda even failed to capture all the orders that were placed for them, they were also unable to communicate cancelled orders to their restaurant partners which created a ruckus for both the parties. Using the current latest technology available, the company could not figure out an optimum and smooth customer experience, for which they had to pay a price in the future.

Rohit Chadda, the co-founder and the MD of Foodpanda also founded another venture with the name, Ziner. In 2014 the website of Ziner showcased dates that were ditto the same as the Foodpanda servers and website. This action from the team was eyebrow-raising.

Later in a notice, Chaddha mentioned that no data has been taken from Foodpanda, and this is a totally different venture, not relating to the other venture that he had undertaken in the past. The company founded by Chaddha has made over 300 million dollars in sales from clients like Rocket Internet and Goldman Sachs since 2012.

More than a hundred employees from various cities left the business at Foodpanda. The resignations include those from Delhi, Mumbai, Pune and Gurgaon, when asked about the reasons for leaving the food delivery company, they stated poor management and lack of transparency of the company which posed a negative image for the company.

Lessons Entrepreneurs Can Learn From Failure of Foodpanda

There was no simple point according to the facts that prove efficiency and effectiveness in the culture of Foodpanda. Nothing worked properly up to the expected point. These loopholes can be used as a guiding light for people who are willing to amend problems and make solutions.

There was no authority figure when this food delivery company was operating but we can now take some valuable lessons. Here we are going to list some useful advice and tips that we can learn. Let us see what are these checkpoints.

A Proper Framework

As the founder of Tasty Khana mentioned that the company had no sense of operations, it was a lesson right there. A proper structure of things is important, that framework has to be well built and has to be made better through iteration.

This involves getting points on how to run a business and determining the best and most effective/efficient way of running it. The framework that we discussed just now should also essentially meet the business plan of the whole organisation. This is what good corporate governance looks like.

Strong and communicative management is crucial too. Marketing is important but if a company only focuses on pure advertising and does not look toward building a good user experience, it will cease to exist. In this segment of business, both customers and restaurants suffered from the inability of food panda and thus, the venture failed to produce desired results.

Communication for Structuring

At Foodpanda, this was the centre of all issues. Employees and the management did not communicate enough. Moreover, when repercussions happened and the company faced obstacles due to bad communication structure, even then no step was introduced to improve communication.

It was a clear sign that the company is not going to survive much. The customers, the listed restaurants and the people at Foodpanda were involved with a lack of communication which resulted in a bad working environment. No framework or strategy worked in the culture at food panda due to the lack of communication, which was the centre of the storm. This ruffled feathers of restaurants, and most consumers who shifted to other delivery apps.

Ownership Story

The founder of the company Foodpanda left their business and went out. Rahul Chadda and Mohit Chadda were the founders of the company which provided the company with their vision and started a venture. Their vision was worked upon as the company grew its scale but then this happened.

Both the founders left the company and as soon as they left, the vision of the company blurred. This blur in vision caused much trauma for the culture of food pandas. This effect was magnified with less or no communication at all. Adding to this, the founders did not even do anything to better the situation. They simply left with no scope for improvement. When Ola bought the company, they were unstable themselves and they also couldn’t figure out the work that needed to be done with Foodpanda. We all know the end and the story of the downfall of this venture.

The business world operates with a steering wheel of risk. There is volatility in every aspect of every business. There will be market conditions that you will not be able to handle but there are always options to edit the internal environment that suits the outside.

Good internal control and management will go a long way in making a venture successful. The future is uncertain but in the face of that uncertainty, there can be some certainty, which can be bought by sheer work and commitment to building a solid culture at work.

Foodpanda failed in many aspects in building a good inside culture. There were communication issues, there were ownership issues and much more. All these holes in the workings led to the downfall of such a big organisation and these little leaks sank the ship of the food delivery business. This massive failure can be one of the biggest learnings an entrepreneur can take and step forward in the direction of success.

We can learn that it is really important to frame the culture at your workplace. It is extremely crucial to document everything and do everything systematically. Even if these suggestions bring little certainty in the world of uncertainty, this is a really good deal.

Online delivery companies are really doing well. They are probably the backbone of the internet economy. In such a big market, every entrepreneur is trying to put their hands on to get some profits out of the flowing water. This delivery ecosystem has emerged as a new form of a sector that is food delivery. We discussed how there are many key players in the sector who are doing really good. Food panda was one of the popular names among the food delivery apps. The company was doing well until some blunders crept into working for the company.

We discussed that the company was incurring big mistakes in the department of communications and operations. There were issues on the behalf of the ownership of the company, key people, like the chief executive officers, left the company without properly framing the workings of the company. Many of the companies which were acquired by food panda disconnected from the board as the working was not efficient.

From all the blunders that the company did, we can learn a lot. Every entrepreneur who wishes to set up his own venture has to read this story of a food panda. The entrepreneur can then value the power of good communication and teamwork. It is really important to understand the value of culture at work. Culture is what sets the tone of efficiency. If the company and the entrepreneur do not work towards setting up a great culture, no other accomplishments can be achieved.

In the end, the story of the Foodpanda, from its arrival to its peak to its downfall is a really important case study for budding entrepreneurs. Failures happen so that we can learn from them and a smart person is a person who learns from other people’s mistakes.

What happened to Foodpanda in India?

Foodpanda entered India in 2015 to capture the food delivery market but failed to do so, later in 2017 the company was acquired by Ola for a 100 percent equity at a valuation of around 40 to 50 million dollars.

Is Foodpanda working in India?

No, Ola suspended the operations of Foodpanda in 2019 as it was facing a huge loss.

Who bought Foodpanda in India?

Ola acquired Foodpanda in 2017 for 100 percent equity at a valuation of around 40 to 50 million dollars.

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Startups That Failed in India | Why Did They Meet Their Demise?

India has the largest market potential and a sizable, diversified customer base that readily embraces change, making it one of the most important factors. It has had its fair share of successes and failures in the fast-paced world of startups. 

The possibility of failing is one of the most frequent risks faced by startups. Starting a business always carries the risk of failure, but there are a number of things that can make it more likely. These consist of poor management, insufficient funding, unrealistic expectations, and a lack of planning. In addition, a lot of startups fail because they need help finding a customer base for their goods or services. This holds true for startups that failed in India, highlighting the importance of understanding market dynamics and mitigating risks effectively.

Top Failed Startups in India

Failed startups are more than just statistics in India. Even among the many prosperous endeavours, some falter and fail.

These failed startups in India serve as important lessons in the value of strategic planning, flexibility, and capable leadership. Some of the startups in India that failed and the reasons for failure are discussed below.

Sadly, a food and beverage startup founded in 2015 had to shut down in 2016. Dazo, a once-promising food tech startup, sought to make meal ordering via its app easier. However, it had to close due to severe competition and operational difficulties. 

Failure Reason: Its failure was primarily caused by an unviable business plan, insufficient funding, and difficulties growing. 

PepperTap faced difficulties when it entered the on-demand grocery delivery business. With so many businesses eyeing the same clients, they discovered that operating their business was costly. They had to close down eventually because they were unable to keep up despite their best efforts. 

Failure Reason: Despite its early success, the company was unable to turn a profit and eventually closed because of a shortage of technology.

A cryptocurrency platform located in Bengaluru was shut down in 2023 as a result of stringent laws and volatile markets. It encountered financial difficulties and erratic market circumstances. As a result, it shut down, which resulted in the termination of all workers.

Failure Reason: It needed help to stand out from the competition and make steady money due to inadequate market research.

ShopX entered the digital commerce space by fusing online and offline retail, with an emphasis on rural markets. After showing promise at first, the startup ran into problems growing, which ultimately resulted in its closure in 2019. 

Failure Reason: The project collapsed due to a lack of funding for steady growth and a slow adoption rate of digital changes by the public. 

Doodhwala provided doorstep delivery of dairy products, but it needed help making a profit and running its business. 

Failure Reason: The business needed help as a result of inefficiencies and fierce competition from Grofers and Big Basket. Its market position suffered as a result, and it became difficult to continue operations. 

The Reasons of why Startups Fail in India

Indian startups frequently encounter challenges that ultimately lead to their downfall. Their growth and sustainability may be hampered by issues like low market demand, restricted financial access, complex regulations, fierce competition, trouble finding talent, inadequate infrastructure, and fragmented markets. 

As per the case studies, the main reasons for startups in India that fail usually close down due to lack of funding, competition, and slow growth. 

Some Of The Recurring Patterns In Unsuccessful Startups

Various industries exhibit common patterns like resistance to change, incapacity to identify disruptive technologies, incapacity to comprehend market trends, unsustainable growth, and feeble business models. Almost all startup failures have a common pattern of reasons, some of which are as follows:

Insufficient market research: Insufficient market research is a common cause of startup failure. It is essential to comprehend customer wants and preferences when creating goods or services that appeal to the intended market.

Over-reliance on financial support: When funding dried up, startups that did not have a sustainable revenue model and only relied on funding struggled.

Legal disputes and a lack of focus: Any startup must concentrate on laying a strong foundation before expanding it further. Entrepreneurs ought to pay attention to the legal issues that could arise later. 

Objecting to change: Companies suffered as a result of their refusal to follow market trends. They lost opportunities because they were not adaptable. It is critical to adapt and maintain flexibility in order to succeed.

Strong Competition: Startups found it challenging to stand out from the crowd and acquire market share due to the fierce competition from established players. 

Leadership Problems: Startups often fail due to internal conflict, lack of direction, and poor leadership, which impede strategic decision-making.

Recovering From the Setback of Your Startup And Learning A Lesson from Each Failure

It is difficult to face startup failure, but it is not the end. First, think back on what went wrong and rectify it. Take what you have learned from past endeavours to make your next one even better. Thus, before resuming, think about taking a break to rejuvenate. Recall that many prosperous businesspeople had setbacks prior to their success. Failure, then, is merely a temporary setback on the way to achieving your main objective. Here are some of the important lessons learned from failure:

• Take the time to consider the causes of failure and draw lessons from errors so that they do not recur in subsequent endeavours.
• Staying up-to-date calls for you to be open to tweaking and amending your business plan in response to feedback from the market and evolving trends.
• Connect with stakeholders, different clients, and industry experts to obtain insightful opinions and thorough views to ensure continuous improvement.
• Utilise your network to its fullest by speaking with fellow business owners, cooperating with colleagues, and seeking guidance from mentors to identify prospects.
• Recognise that failure is a necessary component of the entrepreneurial journey, and turn it into a chance for personal development.

Starting any business requires a lot of knowledge, creativity, funds, and courage. Failure in startups is very common. The failure of each startup imparts knowledge to new business starters about what to do and what not to do, as each failure story is unique and every story sheds light on challenging forces. It is useful for prospective owners to gain wisdom and create a road map for them.

FAQs on Startups That Failed in India

Approximately 90% of startups fail within the first five years, according to studies. Starting a business is challenging, especially in India, where these impediments are common, and many entrepreneurs view victory as a major challenge.

Fintech, e-commerce, and food delivery are examples of highly competitive industries with intricate laws that tend to have higher startup failure rates.

The major reasons why startups fail in India vary, but common factors include insufficient funding, intense competition, regulatory challenges, talent acquisition issues, and market fragmentation.

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Unsuccessful Indian Startups And Their Reason For The Failure

The stories of unicorns always motivate people to search for their hidden entrepreneur. one assumes that a unique idea and foundation of a startup is all that needs to be done. and the rest of the path is a cakewalk. however, always remember that every coin has two sides. similarly, with the startups raising huge funds in the seeding round and becoming unicorns, the menace failing story of startups also exists..

India ranks as the world's third-largest ecosystem for startups. As per a report, every year more than 5 million startups are founded. Still, within the five years of the foundation of a startup, 80-90% of Indian Startups fail. 

Read and understand the reason for the failure of these Indian startups.

Zebpay was founded in 2014 by Saurabh Agarwal, Sandeep Goenka and Mahin Gupta. It was a cryptocurrency exchange platform. Reaching heights, it had around 3  million subscribers.

Reason for failure

As per a policy by the Reserve Bank of India, payment companies were restricted to extend a cryptocurrency service. After one year a subsequent hearing was announced that left cryptocurrency trading policy in between. The uncertainty and fluctuation of the market lead to the shutdown of  Zebpay.

The love of a hosteler or a person residing in PG for home cooked food is not just a feeling. It’s an emotion. Day by day the startups’ serving home-cooked food is increasing. Yumist also came into the ecosystem with the same aim. Alok Jain and Abhimanyu founded it in 2014 to cover the daily-meals segment in India, a huge untapped market. The founders had raised around $3 million in seed funding rounds. 

Reason for Failure:

The burn rate of the entity was very high. Yumist needed extensive capital to grow and it was out of its reach. There was always scarcity of funds to run the startup. As a result, it shut down. 

Dial-A-Celeb

Who doesn’t desire to talk to their favourite celebrity? No one, right. Gaurav Chopra and Ranjan Agarwal, founded Dial-A-Celeb in 2016 to fulfil all those desires. They provided video chats with actors and celebs. Moreover, it also offered customers, autographed items like toys and diaries. However, the journey of the startup was only 1 year.

Reason for failure:

Celebrities were interacting with fans with their own social media apps. The ongoing trend became a tough competition for the app. As a result, the profits also declined and it was shut down in 2017. Do research and study about the existing and future competition of your industry and domain. 

Due to various reasons like office location, excursion, meeting a friend, etc, one has to cover a long distance of around 100km or more. These journeys used to be extremely expensive. Roder was the brainchild of Abhishek Negi, Ashish Rajput and Siddhant Matre. In 2014, they founded the startup with an aim to ease inter-city travel. They used to offer one-way rides at nearly half the market price. 

The inability to manage customer acquisition costs. It was not even able to retain its customers. The competition was escalated by the companies like Ola and Uber, which had a huge source of funds. The entrepreneurs lost their enthusiasm. The moment an entrepreneur loses his/her zeal, that moment failure knocks on his door. 

Turant Delivery

This startup came with a new flavour in the logistic industry of India. It was a B2B startup providing intra-city logistics. The algorithm applied by the founders allowed it to cater services at a price, 15% less than what its competitors were charging for the same trip.

The startup was left with no funds and didn’t survive in the long run. Any logistics service provider requires a huge cash flow to survive in the industry. Funding is an indispensable requirement of any logistics startup.

Doodhwala  

Doodhwala was a subscription-based platform. It was founded in 2015 by Ebrahim Akbari and Akash Agarwal, with a motive to provide doorstep service of milk and grocery items. It claimed to record 30,000 deliveries in a day. 

Whenever there will be talking regarding the startup which failed due to the strong competition, Doodhwala will be the first example. Many experts said that the scarce funds and tough competition from the big names like BigBasket, Milkbasket and SuprDaily. As a result, the startup shut down. 

In August 2017, Rakesh Yadav, Rahul Raj and Aditya Naik founded Koinex. The company became the largest cryptocurrency exchange in India, in its early stage. It had a user base of over 1 million. It reported a $3 million trading volume and complete execution of 20 million+ orders.

On 27th June 2019, it suspended its services. The cryptocurrency trading business is no less than a rollercoaster. The company was impacted by the downs of this rollercoaster. Founders said that the lack of a crystal-clear regulatory framework for cryptocurrencies in India hindered them in smoothly running its operations

A grocery delivery startup, Mr Needs was founded by Hitashi Garg, Yogesh Garg, Ravi Wadhwa and Ravi Verma. It was also a subscription-based startup. The grocery was easily delivered to the doorstep after the customers paid for the subscription. It reported completing 10,000 deliveries in Noida. 

Like Doodhwala, it could have lacked funds due to the less turnover of customers for a subscription-based service. The aggressively funded startups like Grofers and Big Basket is another possible reason for the company’s failure. 

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Indian Growth and Development Review

ISSN : 1753-8254

Article publication date: 20 April 2023

Issue publication date: 24 July 2023

This paper aims to examine the factors that lead to the failure of startups in India and proposes a ‘Four Dimensional (4D) Strategic Framework’ to drive success.

Design/methodology/approach

This study is exploratory and uses a narrative analysis methodology to analyse the accounts of key startup stakeholders – founders, investors, former employees and consumers; to identify their failure factors. A conveniently selected sample of 165 startups was studied to understand better the reasons for their failure within a thematic framework developed from David Feinleib’s (2012) handbook “Why Startups Fail”.

Results indicate that a dearth of capital or running out of money and inadequate sales and marketing strategy, which leads businesses to fall behind rivals and lose money on each transaction, are the most common factors for startup failure in India.

Originality/value

“Startups” are substantial for emerging economies like India because they fuel technological innovation and economic progress and provide for the modern workforce’s needs and aspirations. However, they seem to be typically unprofitable, with a modest probability of survival. Subsisting studies mainly focus primarily on success factors and very few on why startups fail, with significant disagreement on an appropriate methodology. To the best of the authors’ knowledge, this is the first study that analyses failure factors of Indian startups using narrative analysis of its key stakeholders. It aims to aid the conception of profitable entrepreneurship by reducing the failure frequency in the startup and small business ecology.

• Entrepreneurship
• Failure factors
• Narrative analysis
• Thematic framework
• Success strategy

Goswami, N. , Murti, A.B. and Dwivedi, R. (2023), "Why do Indian startups fail? A narrative analysis of key business stakeholders", Indian Growth and Development Review , Vol. 16 No. 2, pp. 141-157. https://doi.org/10.1108/IGDR-11-2022-0136

Emerald Publishing Limited

Copyright © 2023, Emerald Publishing Limited

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25 Failed Startups in India – Reasons of Unsuccess & case study.

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.

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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.

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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.

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Tech Startup Failures in India: Causal Attributes, Life Expectancy, and Exits

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How Conflicts Cause Technology Startups to Fail in India? An Empirical Analysis

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• Published: 23 February 2022
• Volume 17 , pages 40–52, ( 2022 )

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Technology startups are exposed to multiple challenges. One of the key challenges is conflict, as it has a decisive role in the technology startup evolution. This study examines the effect of conflict on the following two counts: How do conflicts differentiate the success or failure of technology startups? How do conflicts impact the startup lifecycle comprising multiple stages of formation? The studies on conflict are few in the context of an emerging economy like India. This study explores the role of conflict by gathering primary data from 151 cofounders (101 who have experienced failure and 50 who are successful and continuing their operations) from India's six leading technology startup hubs. The presence of cofounder conflicts or Investor conflicts increases the odds of failure of technology startups. 1. The cofounder(s) should navigate and resolve the potential conflict issues related to relationships, roles, and rewards. Besides ensuring the cofounder's agreement, having an effective issue resolution mechanism is required. 2. The strategic intervention of investors coupled with the proper governance structure can lend a helping hand in minimizing conflicts. The epiphanies from cofounder(s) perspectives offered practical suggestions for conflict resolution between cofounders and investors.

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Acknowledgements

We would like to thank anonymous reviewers and editors, and Editor-in-Chief for their constructive feedback for improving this article. Their comments and suggestion helped us to enhance the robustness of our research article.

On behalf of all the authors, the corresponding author states that there is no funding received for carrying out this research work.

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Faculty of Management & Commerce, Ramaiah University of Applied Sciences, University House, Gnanagangothri Campus, New BEL Road, MSR Nagar, Bengaluru, 560054, India

Kalyanasundaram Ganesaraman

Department of Management Studies, Indian Institute of Science, Bangalore, 560012, India

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Both the authors conceived the study and its overall structure. Ganesaraman edited the data, performed the analysis, initial interpretation, and drafted skeleton of the article. Bala Subrahmanya contributed to the construction of the model, interpretation of the results, and derived inferences, and conclusions of the article. Both the authors read and approved the final manuscript and participated in the critical appraisal as well as revision of the manuscript.

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Correspondence to Kalyanasundaram Ganesaraman .

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Ganesaraman, K., Bala Subrahmanya, M.H. How Conflicts Cause Technology Startups to Fail in India? An Empirical Analysis. JGBC 17 , 40–52 (2022). https://doi.org/10.1007/s42943-022-00047-x

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Received : 14 August 2021

Accepted : 13 January 2022

Published : 23 February 2022

Issue Date : June 2022

DOI : https://doi.org/10.1007/s42943-022-00047-x

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Kno introduced double paneled e-textbooks. Despite raising $80M, the company saw its chances of scaling up diminish once Apple introduced its iconic iPad.

Details of the startup:

Babur Habib, Osman Rashid

United States

Started in:

Nº of employees:

Funding Amount:

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Competition

You can read more about their failure here .

Rafter was a course material provider for colleges. They had lots of competition and had to deal with logistical, financial, and market challenges.

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