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Seven Epic Cases of Companies That Failed Internationally

This blog covers seven epic cases of companies that failed internationally, including Target, Home Depot, and Walmart.

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As Target’s recent withdraw from the Canadian market showed, sometimes a successful business can’t cut it in a foreign market. To Target, its guns-blazing, self-proclaimed gift from the heavens approach to Canada probably felt right.

Unfortunately after less than two years of blunders, billions of dollars lost and another six years to go before profitability, the brand announced it was ending its foray into Canada , liquidating 133 stores and laying off more than 17,000 employees.

Call it culture shock, call it poor timing, but either way, some business plays look rosy on paper but in practice fail to stick. Target isn’t the first company that saw immense success at home but got shunned abroad. In an effort to learn from the mistakes of others, we took a look at seven of the biggest foreign flops and the reasons why they failed to woo consumers elsewhere.

Home Depot fails to inspire the DIY movement in China

With the Chinese economy in the midst of a growth spurt and the housing market following suit, 2006 seemed liked a good year for U.S.-headquartered DIY giant Home Depot to dip its toes into the market. It was until they’d opened 12 stores that they realized the Chinese didn’t really like to do it themselves. Unlike the Western world where renovating your home is considered a bit of a hobby, developing countries have a tendency to see DIY as a sign of poverty. By 2012, Home Depot had shuttered its stores  and taken a US $160 million after- tax hit in the process. File under, needs improvement.

Walmart creeps out the Germans

Like Home Depot, U.S. big box retailer Walmart failed to take into account   cultural nuances – in particular personal space – when it opened up shop in Germany in 1997. The chain opened 85 stores in an attempt to tap into the frugal country’s lucrative discount department market. But with intricate labour laws, restricted business hours and rows upon rows of regulatory red tape, the market was harder to crack than the American retail giant anticipated. The icing on the cake – customers were a tad bit freaked out by Walmart greeters and their propensity to bag customers groceries for them, both unusual practices in Germany. In 2006, Walmart pulled out, at a cost of US $1 billion.

Starbucks too hot (and expensive) for Australia

Massive U.S. coffee chain Starbucks ended up with a ton of melted iced machiattos when it tried to push into Australia in 2000. Much like Target’s failed leap to the Canadian market, Starbucks went down under with similar naïveté – Aussies act the same as Americans so why wouldn’t their coffee drinking habits be the same? Unfortunately, the local movement dominates the Australian coffee market and for those prone to visiting chains, Starbucks proved to be too expensive. But the slow burn didn’t set in until 2008 when the caffeine peddler suddenly  closed 61 stores to the tune of a reported $143 million loss. Starbucks kept the faith until 2014 when it handed over the remaining 24 shops to the Withers Group, which operates the 7-11 chain in Australia .

Best Buy too big for its britches in the U.K.

Best Buy entered  the UK market in 2010, buying up a 50 per cent stake in UK mobile phone company Carphone Warehouse for $1.3 billion. The goal, which was initially to launch 200 stores, was revised to 100 stores but didn’t even get that far. By late 2011, the big box electronic retailer announced it was closing the lackluster 11 stores it had managed to open during the run. The reason? Despite keeping an eye on strategic acquisitions for years before making the Carphone Warehouse play, Best Buy chose the apex of the worst economic decline in recent history to open up shop. The whole bungled affair was estimated to have cost the company around US $318 million.

Hailo gives up in North America

Unlike Walmart or Home Depot, it took London, U.K.-based taxi finding app Hailo less than a year and a half to decide  it wasn’t up for a rumble with entrenched competitors Uber and Lyft – both peer to peer, ride-sharing networks powered by apps. Despite getting around US $77 million in investment from high profile venture capital groups like Atomico and Union Square Venture, Hailo didn’t see much point in trying to compete in the price war  between Uber and Lyft when it’s doing just fine in Europe with nearly two and a half million registered passengers and 2013 revenues of US $100 million. The company pulled out in October 2014 , shutting its operations in Washington, Chicago, Boston, Toronto and Montreal.

Mattel misses playtime in China

It’s clear the Chinese are a tough consumer for Western retailers to entice. In March 2009, Mattel hoped to hawk its skinny fashionista Barbie to the kids of China . The goal – build a giant 36,000-square-foot Barbie stronghold with six floors, a staircase lined with 875 Barbies and a Barbie-themed bar in the midst of Shanghai’s flashy retail district. Unfortunately, Mattel didn’t study  its market enough. In a culture that stresses skill building and educational toys, Barbie was seen as a bit of a distraction. Within two years the behemoth of a store was closed. But it’s worth noting that Mattel has been tirelessly educating itself on the Eastern market and is slowly making another play. This time, might we recommend Entrepreneur Barbie?

Tesco fails to whet U.S. appetite

For U.K.-based grocery chain, convincing American consumers to shop at its Fresh & Easy seemed like a done deal . And a few years earlier, the brand could have found success selling its fresh supermarket meals to the growing local and organic consumer base. But Tesco’s Fresh & Easy opened the doors in 2007, on the edge of a recessionary cliff when American consumers appetite for food spending was heading south. Five years later, Tesco announced  it was abandoning its American dream and closing its nearly 200 stores on the west coast. The failure cost the British chain nearly US $1.8 billion.

There’s a moral somewhere in there, but if you ask the c-suite you’re sure to get a mixed bag of responses. Some models just don’t work. The truth is, when building out international operations it’s a delicate balance of timing and understanding the cultural nuances. Get it wrong, and it may cost you more than a little humiliation and a pile of cash .

History has shown that good ideas fail all the time, and when expanding into unknown waters, businesses need to be all the more careful.

Tags: Corporate

Andrew Seale

Andrew Seale is a Toronto-based business writer who contributes frequently to Yahoo Canada Finance, The Globe and Mail's Report on Business and The Toronto Star.

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More From Forbes

Companies that failed at digital transformation and what we can learn from them.

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Digital transformation technology strategy,

A staggering 70% of digital transformations fail . Although most companies and executives know how crucial it is to evolve with technology and create digital processes and solutions, putting it into action is a different story. Many companies have endeavored on digital transformations, only to hit roadblocks. Understanding what went wrong with the following three companies can provide guidelines of things to avoid and point future digital transformations in the right direction.

• The majority of digital transformation efforts hit roadblocks and fail
• GE created a new digital business unit but was focused on size instead of quality
• Ford started a new digital service that was separate from the rest of the company instead of integrating digital solutions
• Procter & Gamble didn’t consider the competition or impending economic crash
• These missteps can spell doom for digital transformation, but all three companies managed to try again with better success

It’s important to note that although these companies failed on their initial digital transformation efforts, they were able to make adjustments to succeed in the future. A failed digital transformation doesn’t spell the ultimate end of a company, but it can be incredibly costly in lost money, resources, time and credibility.

In 2011, GE started a major effort to assert itself in the digital software space by building a huge IoT platform, adding sensors to products and transforming its business models for industrial products. It took the next step in 2015, when it created a new business unit called GE Digital. The goal was to leverage data to turn GE into a technology powerhouse. Despite pouring billions of dollars into GE Digital and its thousands of employees, the company’s stock price continued to drop and other products suffered. GE Digital quickly became stuck in the pattern of having to report earnings to shareholders and was focused more on short-term goals and earnings than long-term innovative goals and returns. The CEO was soon forced out .

Lesson: Focus on quality, not quantity. GE tried to do too much without a real strategic focus in any area. The company was simply too large to transform all at once, especially without a true vision of what it was trying to achieve. Digital transformations are often done best with a handful of passionate people leading the charge instead of thousands of employees.

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In 2014, classic American car company Ford attempted a digital transformation by creating a new segment called Ford Smart Mobility . The goal was to build digitally enabled cars with enhanced mobility. The issues arose when the new segment wasn’t integrated into the rest of Ford. Not only was it headquartered far from the rest of the company, but it was seen as a separate entity with no cohesion to other business units. As Ford dumped huge amounts of money into its new venture, it faced quality concerns in other areas of the company. Ford’s stock price dropped dramatically, and the CEO stepped down a few year later.

Lesson: Integrate digital transformation efforts with the rest of the company. In this case, digital transformation as less of an actual transformation and more of a pivot into a new business area. To be successful, digital transformation needs to be integrated into the company.

Procter & Gamble

In 2012, consumer packaged goods giant Procter & Gamble set out to become “ the most digital company on the planet .” The company was already leading the industry when it decided to take things to the next level with a digital transformation. However, its broad goal led to broad initiatives that lacked purpose. Coupled with a slumping economy, P&G faced problems from the start. The CEO was soon asked to resign by the board.

Lesson: Look at the competition. The return on investment for a widespread and expensive digital transformation was small, especially with signs on an economy on the brink. P&G likely could have seen more success if it had focused on smaller digital efforts that were more targeted to its existing products and processes. It failed to look at what was going on in the industry to see it was already ahead of competitors and what was going on with the economy. A digital transformation for transformation sake only won’t be effective. It must consider all outside factors and be tightly tied to strategy.

A digital transformation is a complicated and risky endeavor. When done correctly, it can lead to amazing, future-proof results, but when done incorrectly it can be extremely costly and embarrassing for the company. These failed transformations show common missteps, but the companies behind them prove that failure isn’t the end of the road and that successful digital transformation is possible.

Blake Morgan is a customer experience futurist, keynote speaker and the author of two books including The Customer Of The Future. Sign up for her weekly customer experience newsletter here .

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Case study - companies that failed internationally from a lack of social understanding.

For many companies, expanding internationally is a huge goal. To be able to grow a brand outside of the initial country opens up the opportunity for increasing sales by entering untapped markets who are looking for exactly what a company is selling. 

For company’s who have successfully expanded internationally, the rewards are plentiful. For example, Lego — which is a Danish company — came to the United States in the 70s . Since their expansion, they have become one of the United States’s most beloved toys, reaching nearly 10% of the toy market share in 2018 (good enough for third overall, behind Hasbro and Mattel). 

But, not all international expansions go smoothly.

If a business is not careful and doesn’t do their due diligence, their marketing messages may be lost in translation. Or, if they don’t take the time to incorporate some in-depth market research into their expansion strategies, they may end up losing money instead of making money. 

Here are some examples of companies that failed internationally due to a lack of social understanding and an in-depth breakdown of what really went wrong. 

Walmart in Japan and Their Failure to Differentiate

In 2018, Walmart brought in more than $500 billion in sales globally. Not surprisingly, 3/4 of those sales came from the U.S.

But, overseas — particularly in Japan — things are not going so well for the American retail giant. 

Recent reports have shown that Walmart may be looking to exit Japan nearly 17 years after its initial expansion into the Japanese market. This expansion involved purchasing a minority stake in Seiyu — a Japanese grocery store — in 2002, which then turned into a fully-owned subsidiary in 2008. Like Walmart, Seiyu uses the “Everyday Low Prices” mantra to market to their consumers. 

In between then and now, not much has gone right for Walmart in Japan. Aeon, the top supermarket in Japan, owns 45% of the market share. Meanwhile, Walmart’s Seiyu sits at 12%. 

That may not sound terrible, but to put it into perspective, let’s compare it to another U.S. supermarket that has expanded into Japan with much more success — Costco. 

Costco only has 26 stores in Japan, but in 2017 they brought in just over $3 billion in revenue. Seiyu, on the other hand, has 331 locations and brought in $7.1 billion in revenue. 

So, what went wrong exactly? 

Well, the low price strategy that both Walmart and Seiyu abide by is not nearly as effective in Japan as it is in the United States. 

While consumers in the U.S. appreciate the convenience of being able to find great deals at one central location, Japan consumers are not as concerned with this convenience, making it less of a differentiator in the Japanese market. 

Michelle Grant, the Head of Retailing at Euromonitor International, outlines this issue in a CNBC video , titled “Why Walmart is Failing in Japan.”

In the video, Grant describes how Japanese consumers “enjoy the treasure hunt of pricing” and will go to multiple stores while shopping in search of the best deals. Also, as this Bloomberg Businessweek article points out, Japanese consumers often associate low prices with cheap quality. 

In addition to all of that, Japan’s retail market was already so congested with everything from your stereotypical supermarket to online retailers and mom-and-pop shops by the time Walmart expanded into that region. 

Now, this doesn’t mean that the barriers to entry were impenetrable. It just means that  to enter that market, you need to have a strong differentiator that was effective to the market. This was something that Costco did well, while Seiyu failed. 

Japanese consumers typically aren’t used to shopping in bulk, so going to Costco offers them a totally new shopping experience. Meanwhile, Seiyu was no different than any other supermarket that Japanese consumers were already familiar with. 

Last, Walmart also failed to recognize that Japanese consumers enjoy fresh, locally sourced food — which is something Seiyu does not offer a lot of. 

It remains to be seen whether Walmart will be able to turn it around or if they’ll ultimately end up selling Seiyu. But, one thing is certain, the U.S. supermarket’s lack of understanding their consumers in Japan has set them pretty far back. 

Home Depot in China and the DIY Attitude

Home Depot is known as the place to go for those who embody the DIY mindset when it comes to home improvement. 

In the late 20th century, China started to commercialize and privatize urban public housing to encourage homeownership. For the first time since the 40s, Chinese citizens could own homes. 

Up until this point, Home Depot didn’t even think about expanding to China. But, as more and more Chinese citizens started to own homes, the demand for home improvement and construction materials boomed. As a result, Home Depot acquired Home Way in 2006. 

Unfortunately, in 2012, Home Depot closed all its Home Way stores and left the market. 

So, why the quick exit from the Chinese market for Home Depot? 

The problems they encountered — as laid out in another CNBC video — can be boiled down to two main issues. 

First, the Home Way stores were predominantly located in Chinese suburbs. While being located in the suburbs makes sense in the U.S. — as this is where people tend to move when they gain wealth — this is not the case in China. 

Chinese citizens who acquire wealth will typically stay in the cities and live in apartments or condominiums, which typically don’t require the need for renovations. 

Home Depot took their time when it came to deciding whether or not to enter the Chinese market. However, it seems they still lacked the proper amount of preparation and social understanding it takes to successfully navigate a new and foreign market.  

Starbucks in the Land Down Under and the Importance of Originality 

From its humble roots in Seattle to becoming one of the largest coffee giants in the world, Starbucks is one of the most successful coffee chains out there today. 

In the U.S., it reigns supreme. Look no further than its heavy presence in our pop culture and movies as an indication that it is a staple of American society . But, it’s also a world leader in coffee sales, with nearly 30,000 stores worldwide. 

After its initial success in international markets, Starbucks decided to expand to Australia — opening up their first shop in Sydney in 2000. By 2008, there were over 87 Starbucks locations throughout Australia. 

Despite this growth, things were not going so well for America’s favorite coffee in the Land Down Under. Early on in their Australian endeavors, Starbucks reported $105 million in losses. 

But why was Starbucks expansion into Australia so different than the other international markets it had entered? What exactly went wrong? 

The biggest mistake that Starbucks made when they decided to move into Australia was that they thought they didn’t need to adjust their offerings. 

Australia has a rich coffee culture, where local cafe menus are dominated by complex coffee drinks as opposed to the basic offerings found in Starbucks stores. 

In addition to the basic drinks on Starbucks’ menus, they also have many sugary drinks, which Australians also aren’t particularly fond of. 

Not only did Starbucks fail to tailor their menu to fit the preferences of the Australian coffee consumer, they also failed to alter the physical stores to fit Australia’s idea of what a coffee shop should look like. 

Australians see their cafes as a meeting place to talk business or to catch up with friends. The actual coffee is seen as more of a bonus to meeting there. So, cafes in Australia offer a place to socialize and drink coffee. Meanwhile, a Starbucks shop treats the coffee as the main offering, where you can get your drink and then head out as you start your day. 

Today, Starbucks still operates in Australia — but its target market isn’t Australians.

It’s tourists who are visiting Australia. 

Instead of having locations in various cities and suburbs throughout the continent, they are focusing on major tourist cities. The idea here is that these tourists are looking for something familiar while in a foreign city, and there are few brands that are more well-known than Starbucks.  

Coors’ Messaging is Lost in Translation in Spain

Coors is a very successful American beer manufacturer. But, they made an all-too-common mistake when it came to launching their “Turn it Loose” campaign in Spain — not double-checking a slogan’s translation before going to market. 

When translated into Spanish, their tagline was interpreted as a common expression that means “suffer from diarrhea.” So, not great. 

While this isn’t as big of a failure as the previous case studies, and Coors maintains a strong presence in the Spanish market, it is a lesson in the importance of tailoring your marketing message to fit new consumers, and their language and cultural terms, when in an international market. 

You can find plenty of examples of other companies who have made mistakes in marketing to foreign markets, and there will certainly be more messaging mishaps in the future. 

Takeaways: How to Avoid These Mistakes For Your International Expansions

To ensure that your company doesn’t fall victim to an international marketing blunder, there are a few things you should do prior to setting up shop in a new country, region, or even state. 

First, do the research. ou most likely conducted market research in your current markets and target audience, you will also need to go through the same process in new markets before expanding. It’s important to first establish whether or not there is an opportunity in that international market prior to entering. 

In addition, you have to zero in on the consumer preferences of the new target audience. What type of products they like, what their hobbies are, what flavors they prefer, and simply whether or not your offering will be valuable to them. 

When it comes to marketing, it is not effective to  simply assume you can take current campaigns and apply them without alteration in other areas of the world. People differ from city to city, country to country, and continent to continent. 

How MediaBeacon Can Make Your International Expansions Easier

Some of a business’s most powerful marketing tools are the digital assets that have been created to resonate with their audience. 

When operating in multiple countries, you also have employees who are scattered throughout the world but all need access to the same assets. For example, if you’re rolling out a new product in multiple markets, the assets revolved around that product (such as photos of it) needs to be accessible to all your teams — including those abroad. 

Other assets that your marketing teams, both domestic and abroad, need easy access to are your logo, typography, images, and more. 

That’s where MediaBeacon, a digital asset management (DAM) software, comes in. 

MediaBeacon is all about delivering the correct content and assets to the correct people, no matter where they are working. It also gives your teams access to original assets so that they can quickly alter them to attract a new market while remaining consistent with the international brand.

By incorporating a digital asset management system into your organization, you can have a secure means of facilitating the creation, organization, production, and distribution of all your digital assets.

For countries that require different assets, you can carefully label and tag those specific assets so that the wrong ones don’t get used (you know, so you can avoid accidentally having types of digestive issues inserted into your taglines). 

Contact MediaBeacon today to learn more about how digital asset management can help you thrive abroad!

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10 Companies That Failed To Innovate, Resulting In Business Failure

It’s crazy to think that 88% of the Fortune 500 firms that existed in 1955 are gone. These companies have either gone bankrupt, merged, or still exist but have fallen from the top Fortune 500 companies. Most of the companies on the list in 1955 are unrecognizable, forgotten companies today. As the life expectancies of companies continue to shrink, organisations must be more vigilant than ever in remaining innovative and future-proofing their businesses. 

Here are 10 famous companies that failed to innovate, resulting in business failure.

1. Blockbuster (1985 – 2010)

Home movie and video game rental services giant, Blockbuster Video, was founded in 1985 and arguably one of the most iconic brands in the video rental space.  At its peak in 2004, Blockbuster employed 84,300 people worldwide and had 9,094 stores. Unable to transition towards a digital model, Blockbuster filed for bankruptcy in 2010.

In 2000, Netflix approached Blockbuster with an offer to sell their company to Blockbuster for US$50 million. The Blockbuster CEO, was not interested in the offer because he thought it was a "very small niche business" and it was losing money at the time. As of July 2017, Netflix had 103.95 million subscribers worldwide and a revenue of US$8.8bn.

2. Polaroid (1937 – 2001)

Founded in 1937, Polaroid is best known for its Polaroid instant film and cameras. Despite its early success in capturing a market that had few competitors, Polaroid was unable to anticipate the impact that digital cameras would have on its film business. Falling into the ‘success trap’ by exploiting only their (historically successful) business activities, Polaroid neglected the need to explore new territory and enhance their long-term viability.

The original Polaroid Corporation was declared bankrupt in 2001 and its brand and assets were sold off. In May 2017, the brand and intellectual property of the Polaroid corporation was acquired by the largest shareholder of the Impossible Project, which had originally started out in 2008 by producing new instant films for Polaroid cameras Impossible Project was renamed Polaroid Originals in September 2017.

3.Toys R Us (1948 – 2017)

Toys “R” Us is a more recent story about the financial struggle one of the world’s largest toy store chains.  With the benefit of hindsight, Toys "R" Us may have led to its own undoing when it signed a 10-year contract to be the exclusive vendor of toys on Amazon in 2000. Amazon began to allow other toy vendors to sell on its site in spite of the deal, and Toys "R" Us sued Amazon to end the agreement in 2004. As a result, Toys "R" Us missed the opportunity to develop its own e-commerce presence early on. Far too late, Toys “R” Us announced in May 2017 its plan to revamp its website as part of a $100 million, three-year investment to jump-start its e-commerce business.

While filing for bankruptcy in September 2017 under pressure from its debt of US$1bn and fierce online retail competition, it has continued to keep its physical stores open.

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4.  Pan Am (1927 – 1991)

Pan American World Airways (aka Pan Am), founded in 1927, was the largest international air carrier in the United States. The company was known as an industry innovator and was the first airline to offer computerised reservation systems and jumbo jets.

The downfall of Pan Am is attributed to was a combination of corporate mismanagement, government indifference to protecting its prime international carrier, and flawed regulatory policy. By over-investing in its existing business model and not investing in future, horizon 3, innovations, Pan Am filed for bankruptcy in 1991. Pan Am is survived only in pop culture through its iconic blue logo, which continues to be printed on purses and T-shirts and as the subject of a TV show on ABC starring Christina Ricci.

5. Borders (1971 – 2011)

Borders was an international book and music retailer, founded by two entrepreneurial brothers while at university. With locations all around the world but mounting debt, Border was unable to transition to the new business environment of digital and online books. Its missteps included holding too much debt, opening too many stores as well as jumping into the e-reader business to late.

Sadly, Borders closed all of its retail locations and sold off its customer loyalty list, comprising millions of names, to competitor Barnes & Noble for US$13.9 million. Borders' locations have since been purchased and repurposed by other large retailers.

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6. Pets[dot]com (1998 – 2000)

Pets.com was an online business that sold pet accessories and supplies direct to consumers over the World Wide Web. Although short-lived, Pets.com managed to find some success during a time when there were no plug and play solutions for ecommerce /warehouse management and customer service that could scale. Pets.com launched in August 1998 and went from an IPO on the Nasdaq stock exchange to liquidation in 268 days.

Its high public profile during its brief existence made it one of the more noteworthy failures of the dot-com bubble of the early 2000s. US$300 million of investment capital vanished with the company's failure. Pets.com is a memorable cautionary tale of a high-profile marketing campaign coupled with weak fundamentals (and poor timing). Today, the Pets.com URL redirects users to PetSmart's website.

7. Tower Records (1960 – 2004)

A pioneer in its time, Tower Records was the first to create the concept of the retail music mega-store. Founded by Russell Solomon in 1960, Tower Records sold CDs, cassette tapes, DVDs, electronic gadgets, video games, accessories and toys. Ahead of its time for a fleeting moment, Tower.com launched in 1995, making it one of the first retailers to move online. It seems the company’s foresights stopped short there as it fell prey excessive debts and ultimately bankruptcy in 2004. Tower Records could not keep up with digital disruptions such as music piracy, iTunes and streaming businesses such as Spotify and Pandora. Its legacy is remembered in the form of the movie ' Empire Records ,' which was written by a former Tower Records employee.

8. Compaq (1982 – 2002)

Compaq was one of the largest sellers of PCs in the entire world in the 1980s and 1990s. The company produced some of the first IBM PC compatible computers, being the first company to legally reverse engineer the IBM Personal Computer. Compaq ultimately struggled to keep up in the price wars against Dell and was acquired for US$25 billion by HP in 2002. The Compaq brand remained in use by HP for lower-end systems until 2013 when it was discontinued.

9. General Motors (1908 – 2009)

After being one of the most important car manufacturers for more than 100 years, and one of the largest companies in the world, General Motors also resulted in one of history’s largest bankruptcies. Failure to innovate and blatantly ignoring competition were key to the company’s demise. As GM focused predominantly on profiting from finance, the business neglected to improve the quality of its product, failed to adapt GM to changes in customer needs and did not invest in new technologies. Through a major bailout from the US  government, the current company, General Motors Company ("new GM"), was formed in 2009 and purchased the majority of the assets of the old GM, including the brand "General Motors".

10. Kodak (1889-2012)‘

At one time the world’s biggest film company, Kodak could not keep up with the digital revolution, for fear of cannibalizing its strongest product lines. The leader of design, production and marketing of photographic equipment had a number of opportunities to steer the company in the right direction but its hesitation to fully embrace the transition to digital led to its demise. For example, Kodak invested  billions of dollars into developing technology for taking pictures using mobile phones and other digital devices. However, it held back from developing digital cameras for the mass market for fear of eradicating its all-important film business. Competitors, such as the Japanese firm Canon, grasped this opportunity and has consequently outlived the giant. Another example is Kodak’s acquisition of a photo sharing site called Ofoto in 2001. However, instead of pioneering what might have been a predecessor of Instagram, Kodak used Ofoto to try to get more people to print digital images. Kodak filed for bankruptcy in 2012 and after exiting most of its product streams, re-emerged in 2013 as a much smaller, consolidated company focused on serving commercial customers.

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100 DOS AND DON'TS FOR CORPORATE INNOVATION

To help you avoid stepping into these all too common pitfalls, we’ve reflected on our five years as an organization working on corporate innovation programs across the globe, and have prepared 100 DOs and DON’Ts.

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Major corporate failures have more in common than you’d think, and can be avoided

Assistant Professor of Entrepreneurial Strategy, ESCP Business School

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Well-known firms such as AIG, American Airlines, Arthur Andersen, Blockbuster, Chrysler, Citigroup, Delta Airlines, Dunlop, Enron, General Motors, Kodak, Marks & Spencer, Nokia, Parmalat, Polaroid and Woolworth have one thing in common: They’re cases of major corporate failures. Any resemblance seems to stop there, as they worked in widely different industries and the reasons behind their declines and collapses seem quite different.

However, in April 2018 research published in the Journal of Management Studies , my colleagues and I asked whether there are any recurring patterns explaining how and why large corporations fail, a fundamental question that has puzzled organisations and management scholars. This article was co-written by Stefanie Habersang (Leuphana University of Lüneburg, Germany), Jill Küberling-Jost (Technical University of Hamburg, Germany), and Markus Reihlen (Leuphana University of Lüneburg, Germany).

To explore such patterns, we used a qualitative meta-analysis research design. This allowed us to synthesize the wealth of previously published single-case studies on corporate failures.

Four common processes leading to corporate failure

A first salient finding of our analysis was that all the failure cases seemed to converge around four distinct process archetypes. We named these processes imperialist, laggard, villain and politicized.

Imperialist : This process archetype describes the failure of a firm due to overexpansion. For example in the cases of Parmalat, WorldCom, and News of the World, a dominant firm leader (often either autocratic or charismatic) fostered an aggressive expansion strategy. These firms failed due to an unfocused overexpansion of the firm which gave rise to conflicts with internal and external stakeholders.

Laggard : In the cases of Kodak, Nokia and Polaroid, once industry leaders, they failed because they did not adapt to changing market environments. These firms were stuck in their identity of being leaders, even as their dominance slipped away. While the management of these firms saw the need for change, they were not able to change a previously well-established business model that had made them so successful before – a similar process is described by Joshua Gans in discussing how the iPhone disrupted the mobile-phone industry .

Villain : Here the case involves the process of a previously good corporate citizen into a villain. In the cases of AIG, Enron and Fannie Mae, previously well-regarded firms with ambitious goals increasingly engaged in questionable business practices ( see also Kennedy and Anderson discussing how unethical practices can become routine ). After repeated discovery of such questionable business practices, these firms failed because they lost the trust of their customers and more generally their legitimacy in society. They lose their social “license to operate.”

Politicized : This model describes how firms fail due to increasingly severe conflicts with internal and external stakeholders. In cases such as Arcandor, Chrysler and Delta Airlines, the firms failed because they engaged in “trench warfare,” which strained resources and did not allow them to adapt to changing customer demands.

Two underlying mechanisms explaining the four processes

When examining the four typical process types in more detail, we were intrigued that each one could be explained by two underlying and self-reinforcing mechanisms: rigidity and conflict.

“Rigidity mechanisms” are processes of converging interactions. In the case of Marks & Spencer, top managers overestimated the firm’s stature, which lead to middle managers developing an illusion of invulnerability, which was fed back to top management. The process took hold and led to the company becoming locked in to an erroneous self-perception.

In contrast, “conflict mechanisms” are contradicting interactions and are also self-reinforcing. In the case of Nokia, changing consumer preferences for mobile innovations collided with the organisation’s strategy to diversify into businesses unrelated to mobile phones and caused it to lose sight of its core business.

In total, we identified five types of rigidity mechanisms (e.g., identity rigidity, obedience rigidity, etc.), as well as five types of conflict mechanisms (e.g., identity conflict, authority conflict, etc.)

While the rigidity and conflict mechanisms are fundamentally different – one is based on convergence, the other on divergence – both are capable of bringing about or preventing firm-level change contributing to the failure. Furthermore, we find that it is the distinctive pattern of rigidity and conflict mechanisms over time that gives each process archetype its pronounced characteristics and explains why firms fail.

Helping executives avoid corporate failure

No manager wants to experience or be the cause of a corporate failure. But at the same time, it is notoriously difficult to detect early on the subtle signals of factors that could lead to a downward spiral. In this regard, the outlined process archetypes hold two important implications.

First, we provide evidence-based conceptual frameworks that can help managers recognise patterns that may threaten the survival of their firm. For example, the “laggard” archetype draws the attention to the role of organisational identity in corporate failure. When firms must engage in a radical technological shift – for example, the automotive industry needing to shift from thermal to electric motors (as explained by Stefan Tongur and Mats Engwall ), converging on a new identity becomes a crucial task in the turnaround process.

Second, the good news is that we find that each of the outlined processes can be overcome. While it is important to note that some rigidity and conflict is actually desirable within organisations because the former increases efficiency and the latter has creative potential, it is the extreme forms of these two mechanisms that contribute to organisational failure. The practical implication is that effective leaders will have to strike the right balance between rigidity and conflict within their organisations…

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Why Companies Fail—and How Their Founders Can Bounce Back

Most companies fail. It's an unsettling fact for bright-eyed entrepreneurs, but old news to start-up veterans.

But here's the good news: Experienced entrepreneurs know that running a company that eventually fails can actually help a career, but only if the executives are willing to view failure as a potential for improvement.

The statistics are disheartening no matter how an entrepreneur defines failure. If failure means liquidating all assets, with investors losing most or all the money they put into the company, then the failure rate for start-ups is 30 to 40 percent, according to Shikhar Ghosh, a senior lecturer at Harvard Business School who has held top executive positions at some eight technology-based start-ups. If failure refers to failing to see the projected return on investment, then the failure rate is 70 to 80 percent. And if failure is defined as declaring a projection and then falling short of meeting it, then the failure rate is a whopping 90 to 95 percent.

"Very few companies achieve their initial projections," says Ghosh. "Failure is the norm."

Why Start-ups Fail

Start-ups often fail because founders and investors neglect to look before they leap, surging forward with plans without taking the time to realize that the base assumption of the business plan is wrong. They believe they can predict the future, rather than try to create a future with their customers. Entrepreneurs tend to be single-minded with their strategies—wanting the venture to be all about the technology or all about the sales, without taking time to form a balanced plan.

“In Silicon Valley, the fact that your enterprise has failed is actually a badge of honor.”

And all too often, they do not give themselves wiggle room to pivot midstream if the initial idea doesn't jibe with customer demand.

"Instead of going into the venture with a broad hypothesis, they commit in ways that don't allow them to change," Ghosh says. He cites as an example the failed dot-com-era grocer Webvan, which bought warehouses all over the United States before realizing that there was not enough customer demand for its grocery delivery service.

Next, there's the matter of timing, a huge issue that can determine whether a company gets funding and whether it achieves the start-up's elusive measure of success: an exit that involves going public or getting bought.

During the Internet boom, companies armed with nothing more than a PowerPoint presentation of a lousy idea could secure tens of millions of dollars—which sometimes gave them enough time to figure out a viable business plan through trial and error. Eventually successful companies such as Netscape and Open Market went through several business models before finding one that worked. But the opposite was true after the boom; a company could have a great idea and a great team, but still fail to achieve traction due to lack of funding and, consequently, lack of time to let a good model mature. (These days, Ghosh says, if start-ups often manage to secure a good team and good financing, they face dozens of lower-cost competitors and fragmented customer demand.)

Funding has the potential to turn a little failure into an enormous one.

"The predominant cause of big failures versus small failures is too much funding," Ghosh says. "What funding does is cover up all the problems that a company has. It covers up all the mistakes, it enables the company and management to focus on things that aren't important to the company's success and ignore the things that are important. This lets management rationalize away the proverbial problem of the dogs not eating the dog food. When you don't have money you reformulate the dog food so that the dogs will eat it. When you have a lot of money you can afford to argue that the dogs should like the dog food because it is nutritious."

Enterprise Failure Can Be An Asset, But Personal Failure Is Ruinous

Still, stubborn entrepreneurs continue to found companies, in spite of the failure rates, which raises the question of why. It's not as if any of them harbored childhood dreams of launching a search engine optimization software firm.

Sometimes this is due to naïveté and hubris—the notion that their idea simply cannot fail. But savvy entrepreneurs know that running a company that eventually fails can actually help a career. Even failed businesses yield future networking opportunities with venture capitalists and relationships with other entrepreneurs whose companies are succeeding. Ghosh says boards of successful companies often seek out the founders and CEOs of failed companies because they value experience over a clean slate. After all, Henry Ford, Steve Jobs, and Desh Deshpande experienced multiple failures before achieving success.

“In a start-up, if a company is doing well, and a founder gets greedy and takes more than his fair share, people sort of forgive him. But when a company is going down, when you protect your own interest it's always at the cost of someone else. People don't forgive that.”

"How many search engines are out there that really matter now?" Ghosh says. "Just a handful! And yet the people who created all the other ones in the 1990s are not living under a bridge somewhere. Many of them now run the big ones. In Silicon Valley, the fact that your enterprise has failed can actually be a badge of honor."

Individual failures within a company can be an asset, too, in that they can prevent the whole system from failing—but only if the executives are willing to view failure as a potential for improvement. For instance, if the company's best salesperson is unable to sign a key customer, then the management is likely to chastise the salesperson for failing. But they could also realize that if the top talent has trouble with the sell, then maybe there is something wrong with the product. Small failures can provide the raw material for improvement.

"The more that you can embrace all the little failures you have, and treat them as ways of improving the system, the less likely that the entire system will collapse," Ghosh counsels.

That said, Ghosh warns entrepreneurs that failure of an enterprise, product, or initiative and the personal failure of an individual executive are two very different things. While the former is a learning experience that can lead to future opportunities, the latter can damn a career.

A personal failure, as Ghosh defines it, is one in which an individual does something that violates a fiduciary duty, commits a crime, or acts in a way that goes against the normal tenets of morality and fair play. Ghosh cites as example a CEO who fires a bunch of employees in order to pay for his own severance package. In such cases, a manager's reputation will be tarnished to the point of rendering him or her un-hirable even if the venture was a financial success.

"In a start-up, if a company is doing well and a founder gets greedy and takes more than his fair share, people sort of forgive him," Ghosh says. "But when a company is going down and you protect your own interests it's always at the cost of someone else. People don't forgive that."

Ironically, a personal failure often occurs because an entrepreneur is trying too hard to avoid an enterprise failure. Trying to keep the venture capitalists happy and bankruptcy at bay, the founder or CEO will resort to illegal acts such as fraud, or to morally problematic acts such as blatant misrepresentation of the company's capabilities or prospects when talking to customers or financiers. "And when you do that, you're then on the slippery slope of taking an enterprise failure and making it a personal failure," Ghosh says. "Executives do that all the time because they do not distinguish between the two."

Revising Expectations

Ghosh notes that venture capitalists could help mitigate personal failures by allowing for the expectation of company growing pains. He points out that a baseball player with a .350 average is considered to be a success, even though he has a .650 failure rate. But in entrepreneurial management, there's a tendency to see things in black and white, rather than looking at the whole picture. And while VCs are likely to recruit an executive with experience at a failed company, they are less patient with individual failures. VCs rarely consider their role in establishing unrealistic expectations or an environment where the ends are more important than the means, he says.

"In any natural system, failure is the engine that causes growth, that causes new birth, that causes anything to happen," he says. "One of the truly big differences between growing economies and economies that stagnate is the acceptance of failure. If you don't let forests burn, if you don't let the old trees die out and the new trees grow, you don't get a healthy forest. The ability to manage failure so that enterprises fail but people can still succeed becomes one of the tricks of how you build a society that can reinvent itself as the world changes.

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Failed Startups In India - Case Study of 20 Promising Indian Startups That Tanked

Lakshya Singh , Akash Kushwaha

Sustaining a startup is perhaps the most difficult phase for any entrepreneur. While everyone advocates entrepreneurship as a shortcut to mint money and get rich scheme, the uncertainty and constant pressure to perform is a huge responsibility even for the toughest of individuals. The team at StartupTalky decided to analyze some unsuccessful startups in India.

According to a 2019 report, more than 5 million startups are founded every year. However, only 10%, i.e., 500,000 of these startups, succeed in the long run.

The case study discussed below will give you insights into the failure of some Indian startups that were destined to reach new heights . Learn from the mistakes these Indian ventures did so that you don't end up repeating the same.

Serving home-cooked food is becoming a trend among today’s startups. Yumist was one such venture. It was launched in 2014 to cover the daily-meals segment in India, a largely untapped market. The founders were Alok Jain and Abhimanyu Maheshwari who managed to raise nearly $3 million in funding.

Reason for failure : A business model with a high burn rate that required extensive capital beyond Yumist’s reach for achieving growth. Enough funding was also not available to run the startup. So the startup had to shut down. The Yumist case study is often mentioned when one talks about famously failed startups in India.

2. Dial-A-Celeb

Let’s be honest, a chance to talk with your favorite celebrity is on everyone’s bucket list. Banking on this wish, Dial-A-Celeb was a short-lived yet exciting concept founded in 2016 by Gaurav Chopra and Ranjan Agarwal. In addition to video chats with actors and celebs, the platform also allowed customers to get autographed items such as toys and diaries. However, the startup closed its doors within a year.

Reason for failure : The major reason for Dial-A-Celeb's failure was that celebrities were coming up with their own apps to interact with fans. This trend resulted in immense competition for Dial-A-Celeb and a direct impact on profitability. Dial-A-Celeb was shut in 2017. Know your rivals well and also brace yourself for competition that may arise in the future.

3. Stayzilla

Once on the path to becoming the largest homestay network in India, Stayzilla is reminiscent of a riches-to-rags story. With around $33.5 million in funding and establishing itself in the hotel-rental segment, this brainchild of Yogendra Vasupal, Rupal Yogendra, and Sachit Singhi started crumbling after it failed to repay vendors. The troubles were then aggregated and in February 2017, Yogendra Vasupal officially announced the closure of Stayzilla's operations.

Reason for failure : Stayzilla was way ahead of its time when launched. People were not ready for such Hi-Fi technology. However, the company somehow managed some time on the funding it received. But when people started becoming familiar with online booking, new competitors emerged with better discounts and deals. Stayzilla was unable to provide the same due to the unavailability of funds. Additionally, legal disputes and a lack of focus on growing the business destroyed Stayzilla.

Inter-city travel has become a mainstream requirement— traveling 100 km or more every day is deemed as just another day to some. The reason may be anything: office location, excursion, meeting a friend, etc. These journeys can burn a hole in the pocket. Roder (earlier known as Insta Cabs) was founded by Abhishek Negi, Ashish Rajput, and Siddhant Matre in 2014 to ease inter-city rides. One of Roder's highlights was offering one-way rides at nearly half the market price.

Reason for failure : The inability to cope with customer acquisition costs and not keeping up with the user retention rates. Moreover, increased competition from experienced ventures like Ola and Uber added to Roder's woes. Having a bigger competitor that is more aggressively funded makes the entrepreneurs lose their zeal. And this is one of the major causes of entrepreneurial failure.

5. Turant Delivery

The B2B startup was an intra-city logistics provider that was launched in 2015 to bring a new flavor to the Indian logistics industry. The algorithm followed by Turant Delivery permitted it to offer services at a price as much as 15% less than what fellow competitors charged for the same trip (as per the endeavor’s claim).

Reason for failure : The company did not have the funds to sustain itself in the long run. A logistics service provider needs intensive cash flow to run. Hence, funding is essential for any logistics startup .

6. Finomena

Students are the new target audience when it comes to offering small loans. Acting on this, Finomena came out with an app that provided ‘EMI without cards’. The aim was to allow students to purchase mobile phones and other electronics on a loan. In March 2016, Finomena raised its seeding funding and then made quick strides before going down in 2018.

Reason for failure : Finomena is counted amongst those Indian startups that failed unexpectedly despite having enough funding. It was a fintech startup that focused on providing loans, a segment already dominated by established players before its entry. Fierce competition from rivals like ZestMoney was the major reason behind Finomena's failure. Also, burning cash where it was not needed was another cause. Before you launch your startup, check if the target segment has reached its saturation levels. Also, use your funding wisely!

MrNeeds was a grocery delivery startup founded by Hitashi Garg, Yogesh Garg, Ravi Wadhwa, and Ravi Verma. It provided a subscription-based grocery delivery service. People could easily pay for their subscriptions and receive their groceries on the set date. MrNeeds, a Delhi-based startup , did well with more than 10,000 deliveries in Noida alone.

Reason for failure : MrNeeds was a subscription-based startup. Hence, turnover might not have been that great given how frugal Indians usually' tend to be. So it is possible that the startup had a lack of funding to sustain itself. The entry of funded grocery delivery startups like Grofers and Big Basket can also be another reason for MrNeeds' failure.

8. CardBack

A fintech platform founded by Nidhi Gurnani and Nikhil Wason, CardBack lets credit and debit cardholders with multiple cards know which card provider would offer the best rewards and points on transactions. The venture was funded by famous angel investors such as Alok Mittal and Sunil Kalra and managed to raise $170k in five years.

Reason for failure : CardBack could not secure funds after 2014, and the number of multiple cardholders in India was less than what the fintech startup had expected. Hence, the main reason for CardBack's failure was its over-expectation of market growth. The plan to shift the headquarters to Singapore, where the multiple credit card culture abounds, also failed. The failure to move to Singapore was the final nail in the coffin for CardBack.

9. Overcart

Overcart was the first Indian fintech player to provide a platform for purchasing refurbished, overstock, and pre-owned items. It was founded in 2012. People could buy and sell their electronic devices on the website. Overcart received substantial angel investment; however, the company failed to capitalize on it.

Reason for failure : Overcart did not seem to be very focused on its business. Unsatisfactory services such as late delivery, poor quality of purchased items, and bad customer service led to customer rebuke, thereby causing Overcart to shut down in 2017.

10. RoomsTonite

Last-minute hotel bookings usually end up in a mess and utter disappointment. RoomsTonite was launched to deal with this issue. It received around $1.5 million in funding and ceased functioning by September 2017. The startup rose and crumbled within three years!

Reason for failure : Having strong rivals in the form of Makemytrip and OYO was one reason for RoomsTonite's failure. The credit crunch also added to RoomsTonite's woes. Facing a sudden reduction in the loan's availability is called a credit crunch. Roomstonite faced a credit crunch in 2016 which didn’t allow it to flourish.

11. Doodhwala

Founded in 2015, Doodhwala was a subscription-based platform that delivered milk and grocery items directly to the customer's doorstep. Founded by Ebrahim Akbari and Aakash Agarwal, Doodhwala claimed to complete about 30,000 deliveries in a day.

Reason for failure : According to experts, lack of funds and tough competition from the big shots like BigBasket, Milkbasket, and SuprDaily caused Doodhwala to shut down. It is a prime example of startups that failed in India that failed due to strong competitors.

Russsh was founded in 2012 by Bharat Ahirwar. Russsh offered both first-mile and last-mile on-demand delivery services to individuals and businesses. The company claimed to have a database of over 50,000 loyal clients and completed 500,000 transactions. However, on June 3rd, 2019, the company announced its closure.

Reason for failure : The major reason for Russsh's failure was the lack of funds. It was a self-funded startup and in the absence of enough funds, Russsh was unable to resist the intense competition from its rivals. Bharat Ahirwar also admitted that being a single-founder venture and the absence of a strong team were equally responsible for Russsh's shutdown.

Rakesh Yadav, Rahul Raj, and Aditya Naik founded Koinex in August 2017, and in no time the company established itself as India’s largest cryptocurrency exchange. With a user base of over 1 million, Koinex claimed to have a trading volume of over $3 billion and the successful execution of 20 million+ orders.

Reason for failure : Koinex suspended its services on 27th June 2019. The cryptocurrency trading business has seen many ups and downs in India and this instability affected Koinex. The founders stated the lack of a clear regulatory framework for cryptocurrencies in India to be a major deterrent that prevented them from running Koinex's operations smoothly.

14. DocTalk

Founded in 2016, by Krishna Chaitanya Aluru, Akshat Goenka, and Vamsee Chamakura, Doctalk connected doctors with patients. Through the Doctalk app, one could find good doctors in the vicinity and after just one in-person visit, the patient could connect to the doctor through the Doctalk app for further consultation and queries.

The patients had to pay a subscription fee, whereas the doctors were charged an initiation fee. In 2018, Doctalk pivoted to a new business model wherein it built an electronic medical record (EMR) solution to help doctors write digital prescriptions on customized prescription templates. The EMR business was launched under a new brand name 'Pulse' and was sold to the doctors as a tool that let them digitalize the entire consultation, and share the same with the patients.

Reason for failure: Doctalk's pivot from its initial business model into the electronic medical record solution (EMR) business was not successful; it is often cited as the cause of DocTalk's closure by company insiders.

15. LoanMeet

P2P lending platform LoanMeet was started in 2015 by Ritesh Singh and Sunil Kumar to help small businesses grow through ultra-short-term loans (for 15, 20, or 30 days) for buying inventories. LoanMart's services included B2B marketplace financing, working capital financing, cash credit line, and channel financing in the range of Rs 5,000 to 5 lakh for a period of 15 days to 9 months. The company claimed to have an average lending ticket size of Rs 50,000 at around an 18% interest rate.

Reason for failure: LoanMeet raised funding from Chinese investors Cao Yibin and Huang Wei in 2017 but failed to secure any funding after that. LoanMart's shutdown is attributed to the lack of funds and tough competition from players like Capital Float, Loan Frame, and Happy Loan.

16. Houseparty

Houseparty was a social media and video chat application that was founded in 2016 by Ben Rubin, Sima Sistani, Itai Danino, and Scott Ahn. The app gained popularity for its unique feature that allowed users to connect with friends in group video calls and play games together in real time.

Reasons for failure : Houseparty’s closure was influenced by multiple factors, including the decline of the pandemic, insufficient funding, and Epic Games' prioritization of other areas.

17. Dark Sky

Dark Sky was a weather forecasting app that provided hyperlocal weather information and accurate forecasts to users. It was founded in 2011 by Adam Grossman and Jack Turner. Dark Sky gained popularity for its user-friendly interface and precise weather predictions, which were based on real-time data and advanced algorithms.

Reasons for failure: Sky announced that it had been acquired by Apple and would be discontinued on other platforms, including Android. The acquisition by Apple led to the dissolution of Dark Sky as an independent entity, and its features were integrated into Apple's own weather services.

Amit Sharma and Apoorva Jois founded the startup, which had secured a total funding of $56.4 Mn from multiple rounds since its inception. The startup had received backing from prominent investors, including Infosys co-founder Nandan Nilekani and Fung Investments.

Reasons for failure   In  August, the B2B e-commerce startup operated by 10i Commerce Services had to close its operations and file for bankruptcy. In a filing with the Registrar of Companies (RoC), the startup informed its board that it faced challenges in generating sufficient cash flow or raising new capital through the sale of stakes.

19. Lido Learning

Lido Learning was a Mumbai-based Indian educational technology (EdTech) startup that focuses on providing online education. February 2022, Lido Learning made headlines as the first tech startup to lay off more than 150 employees, using the term "pink-slipped," which raised concerns about the company's employment practices.

Reasons for failure Lido Learning faced a concerning situation when payments to their teachers and employees were not being adequately taken care of .

20. Amazon Food, Distribution

In May 2020, Amazon Food entered the competitive Indian food delivery market. However, after trying it out for more than two and half years, Amazon decided to shut down its food delivery platform, which was being piloted in Bengaluru, India, by 29 December 2022.

Reasons for failure Amazon Food failed in India due to stiff competition from established players like Zomato and Swiggy, localization challenges in catering to diverse culinary preferences, operational complexities in building a reliable network of restaurants and delivery partners, and broader cost-cutting measures undertaken by Amazon in a challenging economic environment.

List Of Other Failed Startups In India

Main Reasons why Startups Fail in India

The above-mentioned examples shed light on major issues that are responsible for the failure of nearly 90% of the emerging startups in India:

• Lack of funds: On close observation, it is evident that insufficient funding or the lack of it caused most of the startups to shut down.
• Highly anticipated model, not in sync with the nature and lifestyle of the Indian population: Some of the startups listed above failed because their highly anticipated models were not appropriate for Indians. Startups should either wait for the right time or educate their future consumers about their technology in advance. Also, the company should pivot only after a thorough market study.
• Poor customer service and sub-par quality of the products offered: Be it an online startup or a brick-and-mortar store, customer service is of utmost importance. Some startups compromise on customer service and the quality of their products; the compromise always results in the closure of business.
• Lack of focus and legal disputes: It is imperative for any startup to focus on building a solid foundation and then growing it further. Entrepreneurs should also focus on the legalities which may cause disruptions in the future. What if you ignore these two factors? You cease to operate like Stayzilla.

You can read more about reasons for startups failures here .

How to Bounce back from your Startup's Failure

Panic doesn’t help in failure; relaxation and progressive thinking will prove to be useful. Successful people have seen failures and have overcome all challenges.

Here are some tips to bounce back from your startup's failure:

Share Your Feelings

Don’t think that life ends after a failure. Don’t spend time criticizing yourself or anyone else, but feel proud of the takeaways from that failure. Keep in touch with friends, family, and relatives to stay calm and relaxed in times of failure. Find a mentor or a group of experienced people. Learn from them. Seek guidance and mental support from mentors and entrepreneurs who have seen both success and failure.

Find Different Sources Of Income To Recover Your Loss

Failures will lead to financial difficulties. So work on expanding your income stream. Contact mentors and entrepreneurs for suggestions on income generation. Do not get depressed because money is meant to come and go. Calculate how long your savings will last and plan accordingly. It will be great if you already have a secondary source of income. If not, spend some time creating a source of income through freelancing or consulting.

Prepare And Plan With Consciousness

A lot of lessons are learned after hard times. Use these lessons to prepare and prioritize. Make a survival plan. Startup founders are very comfortable with planning and execution. Appoint suitable founders and workers to assist you. Hard work always pays off, so work until you achieve success. If your startup fails, create an excel sheet, and write down the skills in one column and the potential income from those skills in the second column. By doing this simple exercise, one will get some clarity on how to keep the business running for a few more months.

Wait For The Right Time To Get The Right Opportunities

Don’t take any important decision at the time of failure because the mind is depressed at such a time. Wait and then plan for the future. Take whatever time is required to make up your mind but once the thought process is in place, do not go back to thinking about the failure. Great opportunities do not come frequently. So wait for the right moment. It is better to wait for several months for the right kind of work than to get stuck on the wrong assignment.

Actions Speak Louder Than Words

Be mindful of your actions after a bout of failure. The right attitude is important during stressful moments. Take the right action with the right attitude. Say no to poor opportunities. Work to the best of your abilities. Aim high and let your failures be the stepping stones to success.

Failure is not an end. It's the first step to success. Whether you are running a startup or are planning to launch one, note down the mistakes discussed in this post. Nothing hurts more than committing a mistake you were already aware of. If this case study on the failure of some promising Indian startups was useful to you, let us know in the comments.

How many startups fail in India?

According to a 2019 report, more than 5 million startups are founded every year. However, only 10% of those startups succeed and the rest break down.

What happens when startups fail?

The startup may gather outstanding accounts, take up loans to settle outstanding debts, sell resources for paying debts, and cater to the investors who funded the startup. Venture capitalists and other investors usually end up at a loss when a startup fails.

Why do 90% of startups fail or why do most Indian startups fail?

Here are some of the major reasons: 1. Lack of funds. 2. Highly anticipated model against the nature and lifestyle of the target audience. 3. Poor customer service and low-quality products. 4. Lack of focus and legal disputes.

What is the hardest business to start?

Businesses that require huge funds to start off with are the hardest to start. Businesses pertaining to logistics,  restaurants, and travel agencies are deemed some of the most difficult businesses to start.

What is the safest business to start?

Businesses that require low investment are the safest. Things that can be done entirely from the comfort of your home are the easiest. Some examples are logo designing, digital marketing, website building, online tutoring, virtual assistance, and so on.

Am I too old to start a business?

There is no age limit for starting a startup. You can be 50 and have a unique idea that might take off in the market.

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Four companies that failed spectacularly, and the lessons of their demise

A recent study published in the Journal of Financial and Quantitative Analysis (a rip-roaring read!) suggests that more than 50% of companies won’t survive to age 16, with the highest corporate mortality occurring in the fourth year.

The Boston Consulting Group’s 2015 report,  Die Another Day: What leaders Can Do About the Shrinking Life Expectancy of Corporations , involving 35,000 companies publicly listed in the US since 1950, claims that today almost one-tenth of all public companies fail each year, a fourfold increase since 1965. The “five-year exit risk” for public companies traded in the US now stands at 32%, compared with a five per cent risk 50 years ago.

Since this one-in-three chance of not surviving the next five years falls within typical CEO tenures and investor time horizons, we decided to analyse four companies that suffered early demise to learn why they “prematurely” failed.

Want to learn more about lessons learnt from the demise of companies that failed spectacularly?

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278 of the biggest, costliest startup failures of all time

• August 29, 2023

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From financial fraud to just running out of money, we scanned our database to identify 278 of the most expensive startup flameouts in history.

For startups, the risk of failure looms large. 

Countless startups have called it quits . But which ones had the most dramatic falls — and why?

We combed through our database to find the most well-funded startup companies that ultimately failed or had an undesirable exit, such as an asset sale or an acquisition for less than the total funding raised by the company.

The reasons for failure are varied. But a few common threads do emerge, such as an inability to generate sustainable revenue, bad product-market fit, losing to competitors, and (of course) simply running out of money.

THE D2C SURVIVAL GUIDE

Learn 5 lessons from major direct-to-consumer brands — like Peloton and Casper — that faced disaster.

But we’ve also uncovered some more extraordinary causes of failure, including:

• Financial fraud
• A most-wanted founder
• A global pandemic

We’ve broken down the companies that failed by the amount of funding they received, starting with those that failed that raised over $100M. We then highlight discussions about the reasons for failure based on press reports, founder post-mortems , and company statements.

• Total funding of $100M+ 
• Total funding from $75M – $100M 
• Total funding from $50M – $75M 
• Total funding from $25M – $50M
• Total funding from $15M – $25M 

This post is updated as of Q2’23.

If you are not already a CB Insights client, sign up for a free trial to dive deeper into startup funding history, investor data, and much more.

For more research into startup failures and corporate flops, check out:

• 463 startup failure post-mortems
• The top 12 reasons startups fail
• The 164 biggest product failures of all time

Startup Failures: Total funding of $100M+

Company: Zume

Select VC investors: SoftBank, SignalFire, SGH Capital

Total disclosed funding: $446M

“Zume, the robot pizza delivery startup that raised close to $500 million, has shut down, The Information reported. The company was founded in 2015 and aimed to automate the pizza-making process, but suffered a series of technological difficulties. It then changed its business model and tried to become a sustainable-packaging manufacturer. According to The Information, Zume was ‘insolvent,’ and Sherwood Partners, a restructuring firm, had been instructed to sell the company’s assets. It ceased trading in May, according to a person with knowledge of the matter, per the report.”

via Business Insider

Company: IRL

Select VC investors: Founders Fund, SoftBank, Kleiner Perkins Caufield & Byers

Total disclosed funding: $197M

“Ironically, the social app IRL‘s users do not exist in real life. An internal investigation by IRL’s board of directors found that 95% of the app’s reported 20 million users were ‘automated or from bots,’ The Information first reported.”

via TechCrunch

Goldfinch Bio

Company: Goldfinch Bio

Select VC investors: Third Rock Ventures, Gilead Sciences, BlackRock

Total disclosed funding: $214M

“CEO Tony Johnson and Chief Financial and Operating Officer Kyle Kuvalanka told Fierce Biotech that the company is closing up shop after failing to secure additional financing. Goldfinch is now in an assignment for the benefit of creditors in Delaware court, an alternative to bankruptcy.  ‘Unfortunately, we had funding challenges, just like I think the rest of the environment, particularly private companies, in the current macro environment,’ said Johnson. The two executives said the company had reduced its workforce over the course of 2022 while winding down and has been operating with a small staff.”

via Fierce Biotech

Company: Mindstrong

Select VC investors: Optum Ventures, Bezos Expeditions, General Catalyst

Total disclosed funding: $160M

“Digital mental health company SonderMind is acquiring Mindstrong’s technology assets months after the fellow mental health firm laid off more than a hundred workers and shuttered its headquarters. The deal includes Mindstrong’s tech and some of the company’s tech-related workforce. According to reporting by Digital Health Business & Technology, about 20 workers will have jobs at SonderMind. The rest of Mindstrong has terminated operations.”

via MobiHealthNews

Company: Freshly

Select VC investors: Highland Capital Partners, Insight Partners, Slow Ventures

Total disclosed funding: $107M

“Freshly is halting direct-to-consumer (D2C) meal deliveries as economic challenges rack the company and the broader meal delivery industry… …as consumers left their homes in 2021, shifting their food spending to dining out, and as economic conditions worsened in 2022, prompting many consumers to pare back their retail subscriptions, the company’s performance took a turn for the worse.”

Company: Argo AI 

Select VC investors: Ford Autonomous Vehicles, Volkswagen Group

Total disclosed funding: $500M

“Ford said in its third-quarter earnings report released Wednesday that it made a strategic decision to shift its resources to developing advanced driver assistance systems, and not autonomous vehicle technology that can be applied to robotaxis… …That decision appears to have been fueled by Argo’s inability to attract new investors. Ford CEO Jim Farley acknowledged that the company anticipated being able to bring autonomous vehicle technology broadly to market by 2021. ‘But things have changed, and there’s a huge opportunity right now for Ford to give time — the most valuable commodity in modern life — back to millions of customers while they’re in their vehicles,’ said Farley.”

Company: CommonBond

Select VC investors: BMO Capital, Barclays Bank, Citibank, Goldman Sachs

Total disclosed funding: $1.3B

“Student loan lending company CommonBond quietly announced it will be ‘winding down’ its operations after its core businesses saw a hit during the pandemic. CommonBond cofounder and CEO David Klein said in a LinkedIn post that despite shifting to focus on residential solar panel loans, the impact of the student loan payment pause made it hard to continue the business.”

Company: Reali

Select VC investors: Akkadian Ventures, Signia Venture Partners, Zeev Ventures

Total disclosed funding: $292M

“Startups that are catering to homebuyers are struggling as interest rates and inflation have climbed and inventory shortages continue in many markets. The latest casualty in the space is Reali, which announced that it has begun a shutdown and will be laying off most of its workforce on September 9. In a press release, co-founder and chairman Amit Haller said ‘the challenging real estate and financial market conditions and unfavorable capital-raising environment’ led to the decision to wind down operations.”

Quillion Tech

Company: Quillion Tech

Select VC investors: Lightspeed China Partners

Total disclosed funding: $178M

“Quillion Technology, which has been in operation for more than half a year and was working on general-purpose computing and data center solutions, informed all staff on August 5 that the company would cease its operations, LatePost reported on August 10… …According to LatePost, the letter for all employees of the company said that Quillion will pay their August salary in full, but starting September 5, it will only pay the salary according to the minimum wage standard in Shanghai, that is, 2,590 yuan per month… …A person close to the company commented that ‘Quillion has not announced its dissolution, but it is no different from dissolution’, and its measures of paying the minimum wage will have the effect of dismissing employees.”

via Pandaily

Company: Kitty Hawk

Select VC investors: Defense Innovation Unit, Larry Page

Total disclosed funding: $101M

“After more than a decade of trying to make flying cars a reality, Kitty Hawk is shutting down. ‘We’re still working on the details of what’s next,’ the Larry Page-backed startup posted to LinkedIn on Wednesday afternoon. It’s unclear why Kitty Hawk decided to call it quits, but comments [Kitty Hawk CEO Sebastian] Thrun made after the company ended development on Flyer may provide a clue. ‘No matter how hard we looked, we could not find a path to a viable business,’ the chief executive said at the time.”

via Engadget

Company: Airlift

Select VC investors: First Round Capital, ACE Capital, Quiet Capital

Total disclosed funding: $109M

“Airlift founder Usman Gul confirmed to TechCrunch that the startup is shutting down and provided detailed notes about the events of recent months… ‘As of July, 2022, Airlift was about three months away from operating profitability (i.e. positive cash flow from operations), and about 6-9 months from company-level profitability (i.e. Free Cash Flow),’ [Airlift founder Usman Gul] wrote. It was also finalizing a new funding round when suddenly things [fell] apart. ‘Last week, amidst rapidly deteriorating conditions in the global economy, several participants shared uncertainty in wire schedules and their disbursements – this ultimately meant that the company’s capital requirements would not be met. Ultimately, the round was unsuccessful,’ he added.”

Company: Volt Bank

Select VC investors: Australian Finance Group, The Collection House

Total disclosed funding: $102M

“[Volt’s] collapse is a further blow to a business model that the Australian government and regulators promoted heavily after a 2018 inquiry into misconduct in the finance industry led to a loosening of rules for new banking entrants. Rising inflation and interest rates this year have made it harder for online-only banks, called neobanks in Australia, to compete with established lenders, making fundraising much more difficult.”

via Reuters

Company: Nice Tuan 

Select VC investors: Alibaba Group, GGV Capital, DST Global

Total disclosed funding: $1.2B 

“As it expanded into small towns, costs rose disproportionately. Goods were sold at below cost to entice customers. Fake buyers appeared at the end of each month to meet sales targets. Regulators were alarmed. Nice Tuan reportedly had a sales target of 80 billion yuan in 2021 but brought in no more than 2 billion in a good month. In March, Meituan, Nice Tuan, Pinduoduo and Xingsheng Youxuan, were each fined 1.5 million yuan for fraud and dumping. In May, Nice Tuan was fined for misleading advertising. ‘The fines really tied our hands,’ a former employee said. ‘ We couldn’t do the kind of promotions our competitors were doing, which really hurt sales.'”

via Jiemian News

Company: Fast  

Select VC investors: Index Ventures, Stripe, Addition, Global Founders Capital 

Total disclosed funding: $125M

“One-click checkout startup Fast is shutting down entirely and will discontinue its products and brand, according to several people familiar with the matter.  It’s a stunning collapse for a fintech company that had raised $120 million in funding from backers including payments giant Stripe, Index Ventures and Lee Fixel’s Addition. Fast has been aiming to transform online shopping by making it easier to check out across a wide range of stores.”

via The Information

Company: LendUp 

Select VC investors: Andreessen Horowitz, Google Ventures, Y Combinator, PayPal Ventures

Total disclosed funding: $366M

“LendUp was backed by some of the biggest names in venture capital,” said CFPB Director Rohit Chopra in a Tuesday statement. “We are shuttering the lending operations of this fintech for repeatedly lying and illegally cheating its customers.”

via MarketWatch

Company: Yunniao

Select VC investors: GSR Ventures, Matrix Partners China, Sequoia Capital China

Total disclosed funding: $210M

“The manager of Yunniao’s Weibo account used it to denounce the CEO, Hán Yì 韩毅, encouraging people to sue him and claiming some employees haven’t been paid for three months. More disgruntled employees quickly emerged, claiming they were forced to buy the company’s financial products, and that drivers were required to pay a 4,000 yuan ($626) deposit before they could get jobs, but never had them refunded.”

via SupChina

Company: KupiVIP  

Select VC investors: MCI Capital, Accel, Balderton Capital, Intel Capital

Total disclosed funding: $119.5M

“‘It is true that the initial business model turned out no longer unique. A commercial innovation introduced in Russia by KupiVIP, discounts progressively became the norm both online and offline,’ David Waroquier of Mangrove Capital Partners previously told East-West Digital News. ‘KupiVIP attempted to become omnichannel, involving operating across its websites, mobile app and brick-and-mortar retail stores. All this required significant capital, given the size of the Russian market,’ Waroquier added.  ‘While the international context was less favorable, not all local players were able or willing to invest in the company.’”

via The Moscow Times

Company: Katerra

Select VC investors: SoftBank Group, Greenoaks Capital Management, Foxconn Technology Company, Khosla Ventures 

Total disclosed funding: $1.5B 

“Katerra’s fall marks the most high-profile failure for SoftBank since the failed 2019 WeWork IPO. The firm has largely been seeing gains among its Vision Fund portfolio in the past year amid a larger tech stock rally, though some of those gains have receded in recent months. In an interview with Barron’s last month, CEO Masayoshi Son highlighted Katerra as well as SoftBank’s investment in Greensill as ‘regrets’ of his. Katerra’s other backers included Khosla Ventures, DFJ Growth, Greenoaks Capital and Celesta Capital.”

Company: Quibi

Select VC investors: Goldman Sachs, NBC Universal, JPMorgan Chase

Total disclosed funding: $1.75B

Quibi Holdings LLC is shutting down a mere six months after launching its streaming service, a crash landing for a once highly touted startup that attracted some of the biggest names in Hollywood and had looked to revolutionize how people consume entertainment. […]

“Our failure was not for lack of trying,” founder Jeffrey Katzenberg and Chief Executive Meg Whitman said in an open letter to employees and investors. “We’ve considered and exhausted every option available to us.”

via Wall Street Journal

Company: Loon

Select VC investors: HAPSMobile

Google’s dream of delivering global internet access with a fleet of balloons floating on the edge of space came to an end on Thursday, as parent company Alphabet disclosed the nine-year project was being closed down. […] Astro Teller, head of X, said on Thursday that, “despite the team’s groundbreaking technical achievements over the last nine years, the road to commercial viability has proven much longer and riskier than hoped.” X would not comment on why its view of Loon’s commercial prospects had shifted in the space of the past six months.

via Financial Times

Company: Xinja

Select VC investors: Equitise, World Investments

Total disclosed funding: $100.6M

“After a year marked by Covid-19 and an increasingly difficult capital-raising environment, and following a review of the market in Australia, Xinja has decided to withdraw the bank account and Stash (savings) account and cease being a bank. This was an incredibly hard decision. We hope to refocus the business in other areas such as our US share trading product, Dabble, should circumstances allow.”

via Finextra

Essential Products

Company: Essential Products

Select VC investors:  Redpoint Ventures, Playground Global, Tencent Holdings

Total disclosed funding: $330M

Essential is shutting down less than three years after the startup unveiled its first smartphone. The company’s only complete product, the Essential Phone, sold poorly and received mixed reviews. A follow-up phone was canceled, and a number of other promised devices — like a smart home assistant and operating system — never materialized.

via The Verge

ScaleFactor

Company: ScaleFactor

Select VC investors:  Bessemer Venture Partners, Canaan Partners, Coatue Management

Total disclosed funding: $ 104M

Though the pandemic may have been a death knell, ScaleFactor was on rocky ground long before, Forbes found. Technology startups are often rewarded for a “fake it ‘til you make it” mentality by venture capital firms willing to throw money at a product until it meets expectations. But ScaleFactor used aggressive sales tactics and prioritized chasing capital instead of building software that ultimately fell far short of what it promised, according to interviews with 15 former employees and executives. When customers fled, executives tried to obscure the real damage.

Company: LeSports

Select VC investors: HNA Capital, Caissa Travel, Zhongtai Securities, Fortune Link

Total disclosed funding: $1.7B

The Hong Kong-based sports streaming arm of cash-starved mainland Chinese conglomerate LeEco closed on Thursday night because of overdue rent. LeSports HK confirmed its shutdown amid other problems – the Consumer Council revealed it also received 30 subscription-related complaints against the troubled company.

via South China Morning Post

Company: Singulex

Select VC investors: OrbiMed Advisors, Fisk Ventures, Prolog Ventures, Advantage Capital, GE Capital

Total disclosed funding: $219M

During a two-week jury trial held in Charleston, South Carolina, the government introduced evidence that [HDL and Singulex] paid physicians remuneration disguised as processing and handling fees… for each patient they referred to two blood testing laboratories: Health Diagnostics Laboratory Inc. (HDL), of Richmond, Virginia; and Singulex Inc., of Alameda, California. The government also introduced evidence that the kickback scheme resulted in physicians referring patients to HDL and Singulex for medically unnecessary tests, which were then billed to federal health care programs. via US Department of Justice

Company: Tink Labs (hi Inc.)

Select VC investors: SoftBank Group, FIH Mobile (Foxconn subsidiary), Sinovation Ventures

Interviews conducted by the FT with several former employees have painted a picture of an organisation that pursued growth too aggressively, falling back to earth when its profits did not meet its vision. [Founder] Terence Kwok declined to comment on “potential ongoing labour disputes” or “business transaction details” in terms of outstanding bills. “I am trying to do what I can, but a lot of things are now out of my hands,” he said.

Company: uBiome

Select VC investors: 8VC, Y Combinator, Dentsu Ventures

Total disclosed funding: $110M

The company’s cofounders have resigned, it faces law enforcement scrutiny over its billing practices, it’s currently in bankruptcy proceedings, and it filed a motion Tuesday to move from Chapter 11 to Chapter 7 bankruptcy, which would mean liquidating its assets and shutting down.

Company: Beequick

Select VC investors: Sequoia Capital China, Eastern Bell Capital, Tiantu Capital

According to media reports, Beequick has now moved out of its original office space, and the app has been removed from major app stores such as Apple and Xiaomi. It is suspected to be out of service. At the same time, the owner of Beequick has also received a formal notice of suspension. This community convenience store [startup], which once set off the Online-to-Offline wave, has ended.

via 36Kr (article translated from Mandarin; lightly edited for clarity)

Company: Anki

Select VC investors: Andreessen Horowitz, Index Ventures, Two Sigma Ventures

Total disclosed funding: $205M

It is with a heavy heart to inform you that Anki has ceased product development and we are no longer manufacturing robots. To our partners and customers, thank you for all your support and joining us on this journey to bring robotics and AI out of research labs and into your homes.

Roadstar.ai

Company: Roadstar.ai

Select VC investors: CMB International Capital, Shenzhen Capital Group, Vision Plus Capital

Total disclosed funding: $128M

In an announcement published on WeChat in late January, Tong and Heng announced they had fired Zhou, accusing him of receiving kickbacks during fundraising, deliberately hiding codes, and putting false data into a government regulatory report.

via Synced Review

Company: Panda TV

Select VC investors: Bright Stone, HanFor Holdings, Woken Asset Management

Total disclosed funding: $194M

Panda TV announced that the company was in a potential bankruptcy, posting an image of its panda mascot facing a sunset, alongside the word “Bye.” The reasons behind this bankruptcy have not yet been officially published.

via Esports Observer

Seven Dreamers Laboratories

Company: Seven Dreamers Laboratories

Select VC investors: P anasonic Semiconductor Solutions, Daiwa House Group, KKR

Total disclosed funding: $104M

Clearly, the product was too ambitious. Seven Dreamers had planned a simpler, but still potentially-impressive version that merely folded and sorted clothes. The first-gen model still required a complex combination of robotics, image analysis and artificial intelligence to achieve its goals, however.

Company: Arrivo

Select VC investors: Plug and Play Ventures, Trucks VC

Total disclosed funding: $1B

Futuristic transportation startup Arrivo shut down its operations this week, The Verge has learned. All of the company’s 30 or so employees were furloughed in late November, with about half being completely laid off at the end of that month … Now, the Los Angeles startup is shutting down because it hasn’t been able to secure new funding, these people say. Remaining employees were informed Friday via text messages seen by The Verge, or by phone.

Company: A iwujiwu

Select VC investors: GGV Capital, Temasek Holdings, Gaorong Capital

Total disclosed funding: $305M

While no official statement has been made, the former unicorn’s website appears to be inactive:

Aiwujiwu, the Chinese online property listings platform and “unicorn,” had ceased regular operations as of the end of January 2019, according to mainland news reports. The company is in a liquidation phase, and services are no longer available on its website (www.iwjw.com) and app.

via SinoInsider

Company: Munchery

Select VC investors: Greycroft Partners, Menlo Ventures, Sherpa Capital

Total disclosed funding: $117M

As a player in the increasingly crowded food delivery space, Munchery writes:

Today, with heavy heart, we’re announcing that Munchery is closing its doors and ending operations effective immediately. Any outstanding orders with Munchery will be cancelled and refunded. Please allow 2-3 business days for these refunds to process.

via Munchery

Company: Solyndra

Select VC investors: Redpoint Ventures, US Venture Partners

Total disclosed funding: $1.22B

Even industry heavyweights such as China’s Suntech Power Holdings Co Ltd and U.S.-based First Solar Inc are struggling with dwindling profits, while small, up-and-coming solar companies are finding it increasingly difficult to stay afloat. Solyndra said it was evaluating options, including a sale of the business and licensing its copper indium gallium selenide (CIGS) technology.

Company: Jawbone

Select VC investors: Khosla Ventures, Sequoia Capital, Kleiner Perkins Caufield & Byers

Total disclosed funding: $929.9M

In July 2017, device maker Jawbone became one of the most spectacular failures in the history of startups. The company’s announcement that it was selling off its assets was long coming: despite grabbing $930M in funding during its 17-year lifespan, Jawbone failed to hold on to significant market share for its line of headsets, fitness trackers, and wireless speakers. With its demise, Jawbone become the second-costliest VC-backed startup failure of all time (per CB Insights’ 2017 Hardware Failure report ).

Abound Solar

Company: Abound Solar

Select VC investors: Technology Partners, DCM Ventures, BP Alternative Energy Ventures

Total disclosed funding: $614M

Abound Solar was the manufacturer of cadium telluride thin-film photovoltaic modules for solar panels. During its run, the company received support from institutions like Colorado State University and the National Science Foundation. In addition to its VC investors, the startup was heavily backed by a loan from the US Department of Defense and a grant from the US Department of Energy. With $614M in Total disclosed funding when it went under in 2012, the company is the third-costliest startup failure in our database.

Company : Theranos

Select VC investors : BlueCross BlueShield Venture Partners, Rupert Murdoch, Walgreens

Total disclosed fundin g : $500M

Theranos is going out with barely a whisper. Once heralded as a revolutionary new way to conduct a blood test to detect myriad diseases, all with a single finger prick, the company is making preparations to close its operations, according to a letter sent to shareholders. “We are now out of time,” David Taylor, the company’s chief executive and general counsel, informed investors in an email first reported on Tuesday by The Wall Street Journal, whose in-depth investigation unraveled the company’s claims. Mr. Taylor declined to comment further, saying the letter spoke for itself. Theranos’s efforts are now focused on avoiding bankruptcy.

via The New York Times

ReVision Optics

Company: ReVision Optics

Select VC investors: InterWest Partners, Canaan Partners, Domain Associates, ProQuest Investments

Total disclosed funding: $172M

ReVision Optics developed an implantable corneal device to treat presbyopia, a vision condition which results in the loss of the eyes’ ability to focus on nearby objects. In an interview with OIS Weekly, ReVision president and CEO John Kilcoyne called the presbyopia segment “very challenging.” He said the reason for shuttering ReVision was that the company “could not get the business to grow fast enough.” The firm would have needed significantly more capital to achieve positive cash flow, and the investors … were reluctant to put more money in. Corneal inlays may yet find their place in ophthalmologists’ business models, but as of now they require more time and effort in a practice than either refractive or cataract surgery, which typically involve the operation itself and one follow-up visit. “Ophthalmic surgeons do not want to keep seeing their patients,” Kilcoyne said.

Company : Wonga

Select VC investors : 83North, The Accelerator Group

Total disclosed funding : $158.4M

While the company received a £10m emergency cash infusion earlier this month, it also saw a new rise in compensation claims, with one source saying that complaints had risen 80 percent since the funds were received. Each complaint costs Wonga £550 in fees before any compensation is even issued, which is more than the lender’s average loan size.

After admitting its algorithmic technology had been lending money to people who couldn’t pay it back, Wonga agreed to write off the loans of 330,000 customers, as well as waive the interest and fees for an additional 45,000. The company was also censured by the FCA for sending fake lawyers’ letters to customers in arrears, which led to the company being forced to pay out a further £2.6 million in compensation.

via PYMNTS and the Financial Times

Company: Beepi

Select VC investors: SAIC Motor, Foundation Capital, Gil Penchina, Redpoint Ventures

Total disclosed funding: $147.7M

Riding on the hype of transportation startups and marketplaces, Beepi may have raised too much, too soon. “They were running the business to raise money, and then to get someone else to take it on,” was how one person described it. One investor in the startup said that the founders were too aggressive in pushing for higher valuations. Indeed, co-founder Alejandro Resnik, the CEO, told the WSJ in 2015 that it was looking to raise a “monster round” of $300 million at a $2 billion valuation to fuel its national expansion.

AOptix Technologies

Company: AOptix Technologies

Select VC investors: Kleiner Perkins Caufield & Byers, Lehman Brothers, Clearstone Venture Partners

Total disclosed funding: $107.9M

Long-time Free-Space Optics (FSO) player AOptix has shut up shop and is selling off its assets at auction next week… the company is currently trying to shop around its intellectual property. A source tells Light Reading that AOptix’s hybrid radio-FSO units were expensive, selling for up to $80,000 a link. Carriers in the US and beyond are looking at wireless backhaul as alternative to fiber, but the expectation is that it should be cheaper and easier to install as well.

via Light Reading

Company: DEFY Media

Select VC investors: ABS Capital Partners, ZM Capital, Wellington Management

Total disclosed funding: $100M

“Regretfully, Defy Media has ceased operations today,” the company said in a statement released Tuesday evening. “We are extremely proud of what we accomplished here at Defy and in particular want to thank all the employees who worked here. We deeply regret the impact that this has had on them today… Unfortunately, market conditions got in the way of us completing our mission.”

via Variety

Primary Data

Company: Primary Data

Select VC investors: Battery Ventures, Lightspeed Venture Partners, Accel, Pelion Venture Partners

Total disclosed funding: $103M

According to a trusted source close to the company, Primary Data’s problem from the outset was that its technology was never quite as compelling as it needed to be, given that it was trying to sell mission-critical software. (If it’s not up to snuff, data virtualization software can create challenges with manageability, usability, data quality and performance.) Immediately upon joining Primary Data, [former CEO] Lance Smith realized that its burn rate was out of control, particularly for a company with no revenue. But while the processes Smith instituted helped, they didn’t change the fact that Fortune 500 companies weren’t prepared to buy Primary Data’s technology.

Company: Guvera

Select VC investors: AMMA Private Investment

Total disclosed funding: $102.6M

Australian music streaming company Guvera has reportedly stopped operating, with its co-founder and biggest financial backer walking away from the project. The startup, which was established in 2008, privately raised $185 million before its $100 million initial public offering was blocked by the Australian Securities Exchange last year. Guvera’s IPO prospectus was widely criticised and the company was forced to issue an updated version with 45 amendments after scrutiny from the Australian Securities and Investments Commission. The company had lost $81 million in the 2016 financial year with revenue of just $1.2 million.

Company: ChaCha

Select VC investors: Qualcomm Ventures, Rho Ventures, VantagePoint Capital Partners

Total disclosed funding: $108M

Advertising revenue declined sharply [2016], leaving the company unable to service its debt, and no suitors took a bite. So its secured lender, which [founder Scott] Jones didn’t name, recently emptied ChaCha’s bank accounts. “We sold some assets, but not enough to sufficiently cover all of our obligations,” Jones said in an email Monday morning. “Unfortunately, our debtholders and shareholders, including me, will be writing off their investment.”

via Indianapolis Business Journal

Drugstore.com

Company: Drugstore.com

Select VC investors: Amazon, Kleiner Perkins Caufield & Byers, Maveron

Total disclosed funding: $157M

[Walgreen’s wants] to make sure they can invest more of the equity in Walgreens.com. Drugstore.com and Beauty.com are distractions.

At the end of the day, it’s about getting new customers, increasing the frequency of transactions and increasing transaction sizes. When I see the retirement of these two domain names, I see a play (for Walgreens.com) in all those spaces.

via Chicago Tribune

Company: Mode Media

Select VC investors: Accel Partners, Draper Fisher Jurvetson, Greycroft Partners

Total disclosed funding: $229M

“The general consensus of the employee base is that there was mismanagement of finances,” said one former company executive… The day after the shutdown announcement, one Mode manager of an overseas office described receiving frantic emails from headquarters requesting immediate transfer of all funds and assets back to the US. “It was the most unprofessional, unethical experience imaginable. [A] confirmed catastrophe,” another exec said about the shutdown. “It’s so catastrophically unethical. No one can believe it.”

Next Step Living

Company: Next Step Living

Select VC investors: Black Coral Capital, Braemar Energy Ventures, VantagePoint Capital Partners

Total disclosed funding: $100.8M

The firm intended to provide a missing channel for residential energy services leveraging its core energy-audit business. At one point Next Step Living had more than 800 employees and was generating more than $100 million in annual revenue. In order to spur revenue, the company moved into downstream energy services such as solar installation and insulation installation and found itself in a low-margin business with a high rate of cash burn. The company also found itself confronted by conflicting energy program mandates and regulations. By the time NSL tried to return to its core home energy audit skills and jettison its downstream installation businesses, many of the VC investors had chosen to stop investing in NSL, despite their earlier entreaties for growth at all costs.

via GreenTech Media

Company : Airware

Select VC investors: Andreessen Horowitz, GE Ventures, Google Ventures, Intel Capital, Kleiner Perkins Caufield & Byers

It appears [Airware] wasn’t able to raise necessary funding to save the company or secure an acquisition from one of its strategic partners like Catepillar. Airware will serve as cautionary tale of startup overspending in hopes of finding product-market fit. Had it been more frugal, saved cash to extend its runway, and given corporate clients more time to figure out how to use drones, Airware might have stayed afloat. Sometimes, even having the most prestigious investors can’t save a startup from mismanagement.

Company : AwarePoint

Select VC investors : Kleiner Perkins Caufield & Byers, New Leaf Venture Partners

Total disclosed funding : $100.9M

Awarepoint executives and board members could not be reached to comment on a recent tip from a former Awarepoint employee, who asked to remain anonymous and who said the company had unexpectedly shut down. A separate tip, sent to me Tuesday by direct message on Twitter from a pseudonym, said the company shut down on May 24. CEO Tim Roche did not respond to a voice message left on his office phone or to an e-mail. Awarepoint’s offices on the second floor of the One America Plaza building in downtown San Diego were locked Wednesday afternoon, and a building representative said the company was gone.

via Xconomy

Company: KiOR

Select VC investors: Khosla Ventures, Alberta Investment Management Corporation, Artis Capital Management

Total disclosed funding: $252.9M

Different parties disagree about which side was responsible — Khosla Ventures or [chemical engineer Paul] O’Connor and the CEO — but most agree that KiOR made poor hiring decisions as it staffed up. The result was a relative preponderance of lab researchers with Ph.D.s and a dearth of people with technical, operational experience running energy facilities. The lack of people with real operational experience “hurt KiOR a lot,” says O’Connor.

via Fortune

Aquion Energy

Company: Aquion Energy

Select VC investors: Bill Gates, CapX Partners, Constellation Technology Ventures

Total disclosed funding: $196.6M

Company CEO, Scott Pearson, commented: “Creating a new electrochemistry and an associated battery platform at commercial scale is extremely complex, time-consuming, and very capital intensive. Despite our best efforts to fund the company and continue to fuel our growth, the Company has been unable to raise the growth capital needed to continue operating as a going concern.”

via Cleantechnica

Company: Quixey

Select VC investors: Alibaba Group, Atlantic Bridge Capital, GGV Capital

Total disclosed funding: $164.2M

Quixey, which revealed last month it was ‘exploring strategic options,’ has reportedly shut down… in part due to its inability to repay a loan provided by a shareholder, e-commerce firm Alibaba. ( Read the Axios report here . )

via Global Corporate Venturing

Company: Quirky

Select VC investors: RRE Ventures, Kleiner Perkins Caufield & Byers, Andreessen Horowitz

Total disclosed funding: $185.3M

Steering the ship — handling all of the engineering, manufacturing, marketing, and retailing, even when you’re taking 90 percent of the subsequent profits — was ultimately too expensive of a proposition, especially in comparison to other, less-handholding-oriented start-ups. “The reason why Kickstarter makes a ton of money is they don’t have to do anything besides put up a website,” [founder Ben] Kaufman notes.

via New York Magazine

Powa Technologies

Company: Powa Technologies

Select VC investors: Wellington Management, Otto Group

Total disclosed funding: $176.3M + at least $50M of debt

The chief executive’s downbeat tone was a stark contrast to an optimistic tone last year. “I’ve forced you to hold out your nerve because I asked you to and I’ve taken you through that, but we’re past that point and now it’s all sunshine and light,” he said in a staff video. In a meeting with the Financial Times last April, [Dan] Wagner compared himself to John Rockefeller, the US business magnate who dominated the oil and rail industries in the 19th century. He believed Powa would set down mobile payments infrastructure that would be just as revolutionary. “What we’re building here is the biggest tech company in living memory,” he said in his offices in Heron Tower, a skyscraper in the heart of the City of London. A person with knowledge of the matter said that Powa could be paying as much as £2.5m a year.

Lilliputian Systems

Company: Lilliputian Systems

Select VC investors: Kleiner Perkins, Atlas Venture, Intel Capital

Total disclosed funding: $150.4M

The Nectar system had its roots at MIT’s Microsystems Technology Lab — and may have simply left the lab a few years too early.

via Beta Boston

Company: Rdio

Select VC investors: Atomico, Mangrove Capital Partners

Total disclosed funding: $117.5M

“Rdio, I guess, made the mistake of trying to be sustainable too early,” says [early employee Wilson] Miner. “That classic startup mistake of worrying about being profitable and having a business that makes any sense before you’ve reached this astronomical growth curve. Which is partly the trap of the business model itself — because of the content licensing deals, the margins for the business were so incredibly thin. No matter what we did, the labels made the lion’s share of the revenue. You have to make it up with extreme volume, which is why you see Spotify going after every human being in the world.”

Company: OnLive

Select VC investors: Lauder Partners, Time Warner Investments

Total disclosed funding: $116.5M

First there were doubts about its ability to deliver a lag-free experience, then business troubles led to a form of bankruptcy followed by big layoffs and a buyout, and all sorts of uncertainty after that.

Company: Coraid

Select VC investors: Azure Capital Partners, Menlo Ventures

Total disclosed funding: $114.3M

Its U.S. operations and had not been successful in raising new funding, among other things. A CRN report earlier this month said the company was closing up for good and was filing for bankruptcy.

via Venture Beat

Terralliance

Company: Terralliance

Select VC investors: Kleiner Perkins Caufield & Byers, Goldman Sachs, DAG Ventures

Total disclosed funding: $296.3M

“All told, the investors had sunk nearly half-a-billion dollars into Terralliance, an astounding sum given the audacity of the company’s aspirations — and the paucity of its accomplishments.”

Webvan Group

Company: Webvan Group

Select VC investors: Sequoia Capital, Softbank Capital

Total disclosed funding: $275.2M

“They spent so much money on all this infrastructure, which was basically part of their business model,” [stock analyst David] Kathman said. “But what they hoped was going to be their advantage turned out to be their downfall. They got big fast, but size turned out to be an albatross when the demand wasn’t there.” One reason demand fell short was that Webvan wasn’t as convenient as it billed itself, Kathman said.

Better Place

Company: Better Place

Select VC investors: VantagePoint Capital Partners, Lend Lease Ventures

Total disclosed funding: $675.3M

The bet was risky because it required large geographies — indeed, entire nations — to adopt the technology in order for it to scale successfully. The company chose small countries like Israel and Denmark to test its model, but the company’s upfront costs kept mounting, and it kept delaying debuts. Also, a number of competing electric car efforts, including the venture by new company Tesla but also by the Big 3 and other manufacturers, kept the industry from adopting any one standard.

via VentureBeat

Amp’d Mobile

Company: Amp’d Mobile

Select VC investors: Highland Capital Partners, Columbia Capital, Redpoint Ventures

Total disclosed funding: $324.5M

Maybe it was Verizon’s most recent in-court request to stop serving up costly airwaves for which it couldn’t pay, maybe it was the cold reality that it’ll allegedly have a mere $9,000 in the bank as of next Monday — but at any rate, Amp’d Mobile appears ready to throw in the towel.

AllAdvantage.com

Company: AllAdvantage.com

Select VC investors: Alloy Ventures, Walden Venture Capital

Total disclosed funding: $133.8M

In a statement posted on the site, the company said the move was taken because “the advertising and capital markets have changed so fundamentally that it is now impossible to continue our infomediary incentive programs and benefits.”… The company saw traffic to its Web site drop significantly during the last six months of 2000. In June, the site was drawing visitors 2 million visitors each month, according to Nielsen/NetRatings. That number dropped to less than 600,000 by December.

via San Francisco Business Times

Company: Kozmo.com

Select VC investors: Oak Investment Partners, Flatiron Partners

Total disclosed funding: $256.5M

If making money on operations was a near impossibility, Kozmo seemed perpetually on the precipice of tapping into the public equity markets. Meanwhile, it floated other plans, like starting a print catalogue and delivering for local retailers. But then they discovered that other retailers had their own deliverymen.

Company: eToys

Select VC investors: Bessemer Venture Partners, Sequoia Capital

Total disclosed funding: Undisclosed, but raised $166.4M at IPO

The company also said it was on the verge of being delisted from the Nasdaq stock exchange. The exchange sent a notice to eToys, threatening to remove the company by May 2 because it has failed to maintain at least a $1 share price for 30 consecutive days, according to Gary Gerdemann, spokesman for eToys. The events were not a complete surprise, given that company executives had cautioned late last year that eToys had only enough cash to remain open through March.

Caspian Networks

Company: Caspian Networks

Select VC investors: New Enterprise Associates, US Venture Partners

Total disclosed funding: $260M

First core routing. Then P2P networking. Then net neutrality. Investors apparently put the kibosh on the company before it crow-barred itself into another communications fad.

Pay By Touch

Company: Pay By Touch

Select VC investors: Mobius Venture Capital, Rembrandt Venture Partners

Total disclosed funding: $130M

Despite those early customers, processing fingerprint payments has not taken off as expected. Pay By Touch claims that it has fingerprint scanners in 3,000 stores, but the privately held company has never disclosed how many transactions it processes. For millions of consumers accustomed to using credit and debit cards, the proposition of using a fingerprint hasn’t been all that appealing. “It’s hard to fight the credit-card companies,” says Gartner (IT) analyst Avivah Litan. “Consumers are so used to racking up frequent-flier miles and other rewards that it’s like a David vs. Goliath situation. There’s just not much of a value proposition for the consumer to use a fingerprint.”

via Bloomberg Businessweek

RealNames Corporation

Company: RealNames Corporation

Select VC investors: Draper Fisher Jurvetson, Clearstone Venture Partners

Total disclosed funding: $116.2M

RealNames said it had no choice to but to close operations as Microsoft was its primary distribution partner. Microsoft was owed $25 million for RealNames “resolutions” already delivered over the past two years and remained unwilling to bet that RealNames would become successful in the long-term. In addition, Microsoft expressed concerns about the quality of RealNames keywords that were sold. The bad guy in all of this is clear: Microsoft, at least when reading the commentary posted on the weblog run by RealNames founder and former CEO Keith Teare, as well as comments he’s made to the press.

via Search Engine Watch

Arts Alliance

Company: Boo.com

Select VC investors: Arts Alliance

Total disclosed funding: $135M

“The firm mis-timed and failed to execute on a good idea,” Torris said. “They started by keeping most of their target audience out,” she added, referring to the need for high-speed connections to easily use the site. Torris said Boo.com also spent too much on advertising and promotions and failed to keep pushing forward on technology innovations. She pointed out that sites such as Landsend.com now feature similar “try on” technology and that third party vendors have begun to develop similar Web sites.

via eCommerce Times

Savaje Technologies

Company: Savaje Technologies

Select VC investors: VantagePoint Venture Partners, RRE Ventures

Total disclosed funding: $113.7M

Now the company is close to closing its doors as it seeks additional funding from venture capitalists. The company, which employs about 140 people, had furloughed its developers and some other employees early in October, asking them to use up their vacation time or go on unpaid leave while Savaje moved to find its way out of its financial troubles.

Company: Pets.com

Select VC investors: Hummer Winblad Partners, Bowman Capital

Almost from the start, Pets.com was a losing proposition, despite its backers’ talk about how much money consumers lavish on their pets. Many pet supplies are heavy and costly to ship – cat litter, cans of dog food – and the firm couldn’t sell enough higher-profit items such as pet toys. Moreover, to attract customers, the company depended heavily on discounts, said Jupiter Communications analyst Heather Dougherty. As a result, the firm was selling supplies below cost the entire time.

via The Wall Street Journal

Cereva Networks

Company: Cereva Networks

Select VC investors: Oak Investment Partners, North Bridge Venture Partners, Intel Capital, Goldman Sachs

Total disclosed funding: $109.5M

A victim of swiftly shrinking corporate IT budgets and a sharp drop in demand for the startup’s large-scale enterprise storage systems, the Marlborough, MA.-based company last week abruptly shut down and laid off 140 employees.

COPAN Systems

Company: COPAN Systems

Select VC investors: Globespan Capital Partners, Austin Ventures

Total disclosed funding: $108.4M

The COPAN product was well differentiated. The weakness was their not understanding, focusing and exploiting its sweet spot. A consequence of an incomplete or erroneous market understanding and a sole reliance on the internal body of experience and knowledge.

via Toolbox.com

Company: Calxeda

Select VC investors: Battery Ventures, Flybridge Capital Partners

ARM server chip designer Calxeda has shut down as one of its executives told The Register: “We simply ran out of money.”

via The Register

Startup Failures:  Total funding  from $75M – $100M

Vedere bio ii.

Company: Vedere Bio II

Select VC investors: Atlas Venture, Casdin Capital, Samsara BioCapital

Total disclosed funding: $77M

“Almost two years after its launch, eye-focused gene therapy start-up Vedere Bio II is closing its doors, company leaders announced through a LinkedIn post over the weekend. The decision to end the company’s operations comes after it missed its preclinical targets, Kevin Bitterman, chairman, and Cyrus Mozayeni, CEO, Vedere Bio II, said in the post. ‘We set a high bar for success, and a broad set of preclinical efficacy studies were performed to determine if we cleared that bar,’ they wrote. ‘Based on the results of those studies, we made the difficult decision to discontinue our efforts.’”

via BioSpace

Company: Fuzzy

Select VC investors: CrossCut Ventures, Matrix Partners, Icon Ventures

Total disclosed funding: $75M

“Fuzzy, a vet care startup founded in 2016, is no longer active. Its site and mobile apps have been taken down and the LinkedIn and Twitter profiles of its CEO and co-founder Zubin Bhettay no longer exist. Dr. Cherice Roth, the Chief Medical Officer of the startup, confirmed the news via a social media post, sharing that ‘the rumors are unfortunately true’ and that it isn’t obvious why this occurred in the manner that it did.”

via Coverager

Aristea Therapeutics

Company: Aristea Therapeutics

Select VC investors: Fidelity Investments, Novo Ventures

Total disclosed funding: $78M

“Aristea Therapeutics (Aristea), a clinical-stage immunology focused drug development company advancing novel therapies to treat serious inflammatory diseases, today announced that, due to safety findings in the ongoing Phase 2 clinical trials, it has discontinued the RIST4721 development program in order to protect patient safety. As a result of this decision, the Board of Directors has determined, after careful and extensive consideration of a range of strategic alternatives, that the appropriate business decision is to undertake an orderly conclusion of the Aristea Therapeutics business and operations and dissolve the company.”

via Aristea Therapeutics’ press release

Faze Medicines

Company: Faze Medicines

Select VC investors: Eli Lilly and Company, Third Rock Ventures, Alexandria Venture Investments

Total disclosed funding: $81M

“Biomolecular condensate startup Faze Medicines is shutting down, nearly two years after launching with $81 million in venture financing. The Cambridge, Mass.-based company first targeted treatments for ALS, or amyotrophic lateral sclerosis, along with a neuromuscular disorder, before expanding into cancer drug research. Third Rock Ventures, one of Faze’s early investors, confirmed its shutdown. ‘While advancements were made in the company’s ALS and oncology programs since launch in late 2020, the science did not progress sufficiently to meet our bar for further investment,’ Third Rock spokesperson Cynthia Clayton, said in a statement. ‘When Faze management made the recommendation to wind down the company, we — and the board — supported that decision.’”

via Biopharma Dive

Company: Bank North

Select VC investors: Crowcube, Insight Investment

Total disclosed funding: $96M

“Manchester-based neobank Bank North is winding down its operations with immediate effect after failing to raise the funds needed for a full banking licence from the Bank of England. In a letter to the bank’s shareholders, board chair Ron Emerson stated the firm had failed to secure funding within the required timeframe as it looked to become a fully regulated bank.”

via Fintech Futures

Company: YCloset

Select VC investors: Alibaba Group, Sequoia Capital China, SoftBank China Venture Capital

Total disclosed funding: $70M

“YCloset’s collapse comes as investor sentiment sours toward the once-popular fashion rental market, which has proven to be capital intensive. As YCloset scaled, it struggled to keep up with high expenses in shipping, dry cleaning, and staying abreast of the latest fashion trends.”

via TechNode

Company: Houseparty

Select VC investors: Sequoia Capital, Greylock Partners, Comcast Ventures

Total disclosed funding: $69.7M

“Epic says that ‘tens of millions of people’ have used the app. Going forward, however, ‘the team behind Houseparty is working on creating new ways to have meaningful and authentic social interactions at metaverse scale across the Epic Games family,’ Epic said. That seems to indicate that Epic has more social features in the works for games like Fortnite and Rocket League that the Houseparty team will be contributing to, which could be important tools to keep gamers playing the ever-updating games. But for those who used Houseparty to chat with their friends and family, the impending shutdown means they’ll have to move those conversations to another messaging app.”

Company: GoBear

Select VC investors: Walvis Participaties, Aegon

Total disclosed funding: $97M

In a statement, the fintech firm said Covid-19 has made the operating and fundraising environment “very challenging,” despite the firm having made progress in its growth and transformation plans last year. The factors included a prolonged period of weakened demand for some financial products and services, in particular travel insurance. Its chief executive Adrian Chng said: “GoBear has made the difficult decision to close the business. Our purpose has been to improve the financial health of people across Asia, and I’m proud and grateful for the contributions that all our employees and partners have made towards that mission.”

via The Straits Times

Aura Financial

Company: Aura Financial

Select VC investors: FirstMark Capital, Varadero Capital, Revolution Ventures

Total disclosed funding: $82M + $264M of debt

Hit hard by the pandemic-induced recession, the consumer lender Aura Financial has suspended its operations. “When the pandemic first hit, Aura was on the verge of closing new financing on its final march to profitability. However, suddenly, all capital dried up as the uncertainty of how our low-income, mostly Latino customer base would recover from a pandemic that disproportionately impacted their jobs, health, and finances intimidated investors,” [co-founder James Gutierrez] wrote.

via American Banker

Company: Jumpshot

Select VC investors:  Avast Software, Ascential

Total disclosed funding: $ 83M

Our investigation found that Avast, through a subsidiary called Jumpshot, made millions of dollars following its users around the internet. Jumpshot told its clients, which include Microsoft, Google, McKinsey, Pepsi, Home Depot, Yelp, and many others that it could track “every search. Every click. Every buy. On every site.” Avast CEO Ondrej Vlcek wrote in a public letter Thursday morning that he and the company’s board of directors have decided to “terminate the Jumpshot data collection and wind down Jumpshot’s operations, with immediate effect.”

Company: Atrium

Select VC investors:  Andreessen Horowitz, General Catalyst, Y Combinator

Total disclosed funding:  $76M

Justin Kan’s hybrid legal software and law firm startup Atrium is shutting down today after failing to figure out how to deliver better efficiency than a traditional law firm, the CEO tells TechCrunch exclusively. The startup has now laid off all its employees, which totaled just over 100. It will return some of its $75.5 million in funding to investors, including Series B lead Andreessen Horowitz. The separate Atrium law firm will continue to operate.

Sienna Biopharmaceuticals

Company : Sienna Biopharmaceuticals

Select VC investors : Fidelity Investments, Altitude Life Science Ventures, ARCH Venture Partners, Partner Fund Management

Total disclosed funding : $86M

The company, founded in 2010, had hoped to sell itself and restructure but didn’t receive any bids for the whole company. It sold its topical photoparticle therapy assets to Sebacia, a dermatology company, for $1.7 million.

via Becker’s Hospital Review

Company: Lesara

Select VC investors: Mangrove Capital Partners, Northzone Ventures, 3L Capital

Total disclosed funding: $99M

Lesara, which was an online fashion retailer, stated on its website:

We regret to inform you that the Lesara Online Store has closed. Rest assured, we will do our best to fulfill orders that have been placed. Orders placed before 28th February will have a return policy of 30 days.

Company: Juicero

Select VC investors: Kleiner Perkins Caufield & Byers, Thrive Capital

Total disclosed funding: $99.9M

On Sept. 1, as many U.S. businesses closed early for the Labor Day holiday weekend, Juicero Inc. — a lavishly funded startup that once sold a $699 Wi-Fi-connected juice press — announced it was shutting down forever. Juicero’s demise was not unexpected. Its collapse was the consequence of unsustainable costs, unflattering headlines and a bungled product launch. After attracting about $134 million in funding from such illustrious investors as Google Ventures and Kleiner Perkins Caufield & Byers, Juicero was losing about $4 million a month. Four years after its founding, the startup was unable to find new backers willing to fund its ambition of making fresh juice accessible to all.

via Bloomberg

Company: Auctionata

Select VC investors: German Startups Group, Bright Capital, e.ventures, Earlybird Venture Capital

Total disclosed funding: $97.4M

Auctionata has been in decline since news of serious trade violations perpetrated by co-founder and former CEO Alexander Zacke came to light in March 2016, when Zacke and Auctionata board members were accused of illegally bidding on their own auctions. Months later, reports of business difficulties at Auctionata emerged after independent evaluations of auction results suggested that the house was making only very few direct sales. At the time, the company insisted that the figures didn’t take into account private sales and other revenue streams.

via artnet news

Company : Wimdu

Select VC investors : Rocket Internet

Total disclosed funding : $90M

They say imitation is the sincerest form of flattery. But it doesn’t guarantee success, and today, an Airbnb clone learned that the hard way. Wimdu, a startup originally hatched out of the Rocket Internet startup factory in Berlin and modelled on the travel accommodation US startup Airbnb, announced that it would be shutting down at the end of 2018, citing “significant financial and business challenges.

Company : Verdezyne gri

Select VC investors : BP Alternative Energy Ventures, Sime Darby

Total disclosed funding : $89.4M

Confirmed this month, Verdezyne, the synthetic biology company that was founded in 2008 and was working on the production of renewable chemicals, using their own highly-proprietary platform, has gone into bankruptcy. First reported by BiofuelsDigest, this month Green Chemicals Blog had spoken with a senior employee from Verdezyne, who said the Californian company closed its operations on May 15th due to its primary investor, Sime Darby, having withdrawn its funding. The closure of the company came ahead of the imminent opening of its first commercial facility, which would have been an impressive achievement for an industry where one of the main challenges lies in producing bio-based materials on an industrial scale.

via Bio Based World News

Sonitus Medical

Company: Sonitus Medical

Select VC investors: GE Capital, Aberdare Ventures, Novartis Venture Funds, RWI Ventures

Total disclosed funding: $89.7M

We took a prevalent surgical treatment into the office where we reduced the cost by half and we significantly impact patient safety because there was no surgery involved and we made it more effective… They [the Centers for Medicare & Medicaid Services (CMS)] arbitrarily draw a line saying, “No, you are not qualified for coverage because the way we draw a line between what’s a prosthetic and what’s a hearing aid is whether it involves surgery or not.”

via MDDI Online

DeNovis, Inc.

Company: DeNovis, Inc.

Select VC investors: Advanced Technology Ventures, UV Partners

Total disclosed funding: $97.8M

In a Boston Globe interview in January, he had indicated that the company’s financial performance was a pressing concern. He said the $22 million in venture capital the company raised nine months ago was effectively its last chance. But having spent such a large sum of venture capital, DeNovis needed to go public or find a deep-pocketed buyer to return a large profit to its investors. Burkett said at the time, ”I only hear that about 11 times a day.”

via Boston Globe

Company: Aereo

Select VC investors: FirstMark Capital, Highland Capital Partners

Inside the infrastructure that drove its online service, it assigned every Aereo user a mini broadcast TV antenna, and it used this to argue that its service was no different than sticking a pair of bunny ears on your television. That way, Aereo could avoid paying retransmission fees for broadcasters’ content. But broadcasters never bought this argument, and when it came down to it, neither did the US Supreme Court.

Company: Beyond The Rack

Select VC investors: Silicon Valley Bank, BDC Venture Capital, Highland Capital Partners

Total disclosed funding: $95.6M

Launched in 2009 by former Saks executive Yona Shtern, Beyond the Rack pitches steep markdowns on designer goods, accessories and home décor. The sales typically last 48 hours and are announced to email subscribers. The company has 14 million members, and 450,000 active buyers, according to court filings. But Beyond the Rack struggled to turn a profit and spent its funds on “aggressive and costly marketing campaigns aimed at increasing customer growth,” according to court papers. It filed for protection with less than $1 million in cash, the documents show.

via Wall Street Jourrnal

Canopy Financial

Company: Canopy Financial

Select VC investors: GGV Capital, Foundation Capital

Total disclosed funding: $89.5M

…company management discovered earlier this month financial records provided to investors and lenders that were “fraudulent,” as well as “significant financial and accounting irregularities.”

Soapstone Networks

Company: Soapstone Networks

Select VC investors: Accel Partners, Oak Investment Partners

Total disclosed funding: $87.3M

Soapstone was an underdog from the start. Even as a known quantity, it was going to have to wrestle with the slow process of qualification at big carriers. The recession certainly didn’t help. And it seems to me (and one source from outside Soapstone agrees) that while Soapstone wasn’t entirely wrapped up in PBB-TE (Provider Backbone Bridging – Traffic Engineering), the stall in that technology’s ascent was a contributing factor, too.

Claria Corporation

Company: Claria Corporation

Select VC investors: US Venture Partners, Crosslink Capital

Total disclosed funding: $84M

The company realized that there were too many ad networks out there, and with the souring outlook for advertising, it made better sense to close shop and sell the company’s extensive set of patents, the source said.

Company: 38 Studios

Select VC investors: Rhode Island Economic Development Corporation

Add it all up, including interest, and already-cash-strapped Rhode Island could be out as much as $110 million on the loans. As Schilling sits beside the softball diamond, his company, with nearly $151 million in debt and just $22 million in assets, is being liquidated through Chapter 7 bankruptcy.

via Boston Magazine

Company: SunRocket

Select VC investors: Anthem Capital, BlueRun Ventures

Total disclosed funding: $79.3M

Analysts have been predicting that it would be difficult for companies, like SunRocket and the more popular Vonage, to base an entire business around a VoIP service. While VoIP makes it relatively cheap to serve customers, it’s still expensive to acquire them.

Startup Failures: Total funding from $50M — $75M

Coda biotherapeutics.

Company: CODA Biotherapeutics

Select VC investors: Astellas Venture Management, MPM Capital, Novartis Venture Funds

Total disclosed funding: $63M

“A gene therapy startup backed by two key biopharmas and two premier biotech VC firms has ceased operations. California biotech Coda Biotherapeutics shut down recently, investors Versant Ventures and MPM Capital confirmed to Endpoints News Tuesday night, declining to provide further details. The upstart had presented preclinical data on its program for focal epilepsy last summer but had not provided an update since then. MPM removed Coda from its portfolio page in recent weeks, per internet archives, and the biotech’s LinkedIn page has been wiped.”

via Endpoints News

Triplet Therapeutics

Company: Triplet Therapeutics

Select VC investors: Pfizer Venture Investments, Alexandria Venture Investments, Atlas Venture

Total disclosed funding: $59M

“Three years after emerging from stealth with plans to use RNA to silence disease-causing genes, Atlas Venture spinout Triplet Therapeutics is winding down its operations. Co-founder Nessan Bermingham told the Business Journal the closure had been in the works for some time, following discouraging clinical trial data from competitors that were developing similar medications. The startup went from around 55 employees to around 12, then to a few key leaders who would stay on to ensure that the data Triplet had generated, plus an ongoing natural history study, would not go to waste.”

via Boston Business Journal

Company: Modsy

Select VC investors: Google Ventures, Comcast Ventures, NBC Universal

Total disclosed funding: $71M

“In late June, Modsy, an online interior design services startup, abruptly ceased offering design services, laid off its designers and left customers with unfinished renovations and project orders in process. The company returned some service order charges and promised to refund furniture deliveries to those who completed a form. But more than two weeks later, tweets show that many Modsy customers are still awaiting updates. The reason is that Modsy quietly shut down in early July, founder and CEO Shanna Tellerman said in an email to TechCrunch.”

Company: Butler

Select VC investors: Kraft Food Groups, Shamrock Holdings

Total disclosed funding: $51M

“​​Butler’s downfall is a cautionary tale both of the opportunities and challenges that exist in the world of on-demand startups. There may be clear gaps in the market for services that appear in theory like easy sailing. Yet they can inevitably be buffeted by economic, social and, in recent times, extreme public health headwinds. And amidst all that, those working there are the first to go over.”

Company: Hubba  

Select VC investors: Brightspark Ventures, Kensington Capital Partners, Real Ventures, GS Growth

Total disclosed funding: $59M 

“It is unclear to what extent the COVID-19 pandemic had hampered Hubba’s growth and customer base. However, one source BetaKit spoke with claimed a months-long battle between Zifkin and Hubba’s board of directors regarding the ongoing viability of the company. Recent StatCan data indicates that over half of Canadian businesses (98 percent of which are small businesses) saw a drop in revenue compared to 2019, with 20 percent seeing a revenue drop of 40 percent or more.”

via BetaKit

Company: Quantopian

Select VC investors: Bessemer Venture Partners, Andreessen Horowitz, Khosla Ventures

To some pros, the end of Quantopian was inevitable. Could amateurs really figure out anything they couldn’t? Even high-priced hedge fund managers are struggling to outwit the market these days. […] Quantopian’s bet was that this kind of elitism might give it a competitive edge. By offering everyone on the internet free access to data, tutorials, and tools, it sought to beat the army of Ivy League Ph.D.s by picking the best quant strategies from the world’s untapped geniuses. It was the wisdom of the crowds, applied to the nerdiest corner of Wall Street — radical, sure, but a logical extension of a burgeoning gig economy and a tech revolution that was opening up access to ever-deeper market data. […] In late October, the company announced it was shutting down. A few weeks later, Quantopian Chief Executive Officer John Fawcett announced that he, his co-founder, and other employees were going to work at the retail brokerage Robinhood Markets Inc.

Stay Alfred

Company: Stay Alfred

Select VC investors:  Nine Four Ventures

Total disclosed funding:  $62M

Stay Alfred had raised around $60 million in funding, with its most recent round coming in at $47 million in October 2018. Allen said he and his leadership had been seeking new funding of up to $30 million as recently as March [2020] but the global lockdown caused by the coronavirus pandemic, coupled with investor interest failing to materialise into an offer, forced the startup’s hand.

via Short Term Rentalz

Company: IfOnly

Select VC investors:  New Enterprise Associates, Khosla Ventures, Founders Fund

Total disclosed funding:  $54M

IfOnly — an “experiences” marketplace based around access to exclusive, and often expensive, events and people, with a portion of the proceeds that a guest pays for the experience going towards good causes — was quietly acquired and shut down by credit giant Mastercard for an undisclosed sum. Mastercard told TechCrunch that it has folded the tech and team into Priceless — its own experiences marketplace — after initially leading a strategic investment in the company in 2018. …IfOnly’s business had ground to a halt in the wake of the coronavirus pandemic… The sale (and closure) puts an end to a startup that began life with exclusive experiences that appeared to be aimed squarely at the one percent.

Company: Wellfount

Select VC investors:  Arboretum Ventures, Elevate Ventures, Deerfield Management

Total disclosed funding:  $51M

The sky seemed the limit. “It’s a very scalable model,” CEO Eric Orme told IBJ in 2014. But last month, Wellfount quietly shut its doors, stopped answering its phones and pulled down its website. Several employees told IBJ the company closed on March 31 [2019] and laid them off. Nursing homes, the company’s largest customers, were caught off guard. […] What happened at Wellfount remains unclear, though industry observers say the competitive landscape shifted for the company in recent years, as the vending machine-style medicine dispensers it helped pioneer became available from many vendors.

Company : Vicis

Select VC investors:  Rx3 Ventures, Trilogy Equity Partners, W Fund 

Total disclosed funding : $74M

“We were more successful than most at raising capital, but it took a tremendous amount of time and effort, effort that could have been applied to growing and running the business,” [co-founder and ex-CEO Dave] Marver said.

via New York Times

Stratoscale

Company : Stratoscale

Select VC investors : Battery Ventures, Bessemer Venture Partners, Cisco Investments, Intel Capital, Qualcomm Ventures

Total disclosed funding : $69M

We built something amazing but the merger was not successful. The product that we developed was great and right, if it will be part of a larger organization. We think there has been a technological switch in which the giants dictate the direction of the market and we gave more power to the traditional players. We had an amazing team but we decided that the time had come to move on.

Company : Hipmunk

Select VC investors :  Ignition Partners, Oak Investment Partners, NGP Capital

Total disclosed funding : $55M

We carefully considered all potential avenues for Hipmunk and Concur Hipmunk and determined that it was in the best interests of our travelers, customers, our people, and SAP Concur to terminate the service and retain all of the intellectual property.

via Yahoo! Finance  

Oryx Vision

Company: Oryx Vision

Select VC investors: Bessemer Venture Partners, Trucks VC, Maniv Mobility

Total disclosed funding: $67M

Currently, the architecture of the autonomous vehicle is simply not converging, so a venture-backed company will not be able to justify the investment that will still be needed… There was a lot of deliberation and investors were prepared to keep going, but we saw that LIDAR was becoming a game of giants and as a small company, it would be difficult to continue operating and return investments.

via co-founder Ran Wellingstein quoted in CTech

Crazy Teacher

Company: Crazy Teacher

Select VC investors: Tencent Holdings, Kun Ling Capital, bioVENTURE

Total disclosed funding: $65M

The crazy teacher app page displays the words “Goodbye” and writes: “The madness has ended, thank you for the past.”

via Pencil News

Company: Shyp

Select VC investors: Homebrew, Sherpa Capital, Kleiner Perkins Caufield & Byers, Slow Ventures, Otter Rock Capital, Machine Shop Ventures

Total disclosed funding: $62M

Shyp had bet everything on sustainability rather than expansion. It drastically downsized itself last July, when it ended service in Chicago, Los Angeles, and New York, laid off much of its staff, and dedicated itself to reaching profitability in its home market of San Francisco. Even earlier, it had laid off 8% of its workforce and before that shuttered its Miami operations. According to [Shyp CEO and co-founder] Gibbon, the new, smaller Shyp began turning an operational profit last December… But the company still needed more funding to continue and was unable to secure it from venture capital firms, which have grown wary of the whole category of startups that provide on-demand services involving physical infrastructure such as Shyp’s couriers and warehouses. With no viable alternative moves such as selling the company on the horizon, “we just ultimately ran out of time with the cash that we had available to us,” [Gibbon] says.

via Fast Company

Company : Apprenda

Select VC investors : Ignition Partners , Safeguard Scientifics

Total disclosed funding : $55.5M

Venture capital firm Safeguard Scientifics has invested $22.1 million in Apprenda since 2013 and held a 29 percent ownership stake in the company, corporate controller Dave Kille said during an earnings call Thursday. Safeguard took a $6.6 million charge against earnings during the second quarter to write off its ownership in Apprenda. “Apprenda recently decided to wind down its operations,” Kille said during the call. Apprenda “would have needed … to continue to develop technology and try to catch back up,” Safeguard CEO and president Brian Sisko said. “The collective view around the table (was) that it wasn’t appropriate to plow more capital into this opportunity.”

via the Albany Times-Union

Company : PATH

Select VC investors : Ashton Kutcher, Gary Vaynerchuk, Greylock Partners, Kleiner Perkins Caufield & Byers

Total disclosed funding : $66.3M

As Facebook ballooned in size and our friend lists grew with it, Path sought to be the place where you chatted with only the people you were closest to. And for a little while, the idea seemed to work. Quickly, Google reportedly tried to gobble it up. By mid-2013, Morin proclaimed that people were checking the app “over 1 billion times per month. Around [2015], it was bought by Korean tech company Daum Kakao. And then we forgot about it. On October 1, the app will be removed from the app stores.

via Gizmodo

Company : Seatwave

Select VC investors : Accel, Ticketmaster Entertainment

Total disclosed funding : $62.6M

We’re shutting down our sites GET ME IN! and Seatwave. That’s right, we’ve listened and we hear you: secondary sites just don’t cut it anymore and you’re tired of seeing others snap up tickets just to resell for a profit. All we want is you, the fan, to be able to safely buy tickets to the events you love. So, we’re launching a fan-to-fan ticket exchange on Ticketmaster where you can easily buy tickets or sell tickets you can’t use through our website at the price originally paid or less.

via Ticketmaster

Gridco Systems

Company: Gridco Systems

Select VC investors: General Catalyst, North Bridge Venture Partners, Lux Capital

Total disclosed funding: $54M

Utilities have failed so far to expand their use of distribution grid-level power electronics much beyond the pilot phase, leaving Gridco with little opportunity to grow to the scale necessary to maintain its operations on the strength of its own revenues. “Though we were able to successfully prove Gridco’s technology as best-in-class for use in utility-scale volt/VAR optimization programs, the VVO market did not actualize quickly enough for us to achieve critical mass and financial self-sustainability,” said CEO Naimish Patel.

via Greentech Media

Company: Hello

Select VC investors: Cherubic Ventures, Temasek Holdings

Total disclosed funding: $52.9M

Hello, the startup behind Sense sleep tracking devices, plans to shut down. The company recently laid off most of its staff. Hello recently held discussions to sell its assets in what one source described as “a firesale” to Fitbit, but the deal fell through, according to a source familiar with the situation. According to a blog post from founder and CEO James Proud, the company continues to seek buyers for its assets. “The past few weeks we have been working hard to find the right home for Sense and we are still focused on that,” wrote Proud.

Company: TerraLUX

Select VC investors: Access Venture Partners, Emerald Technology Ventures

Total disclosed funding: $55.6M

A fast-growing maker of LED and smart lighting doesn’t have enough cash to keep its own lights on. Longmont-based Terralux, now known as Sielo, ceased all operations on Aug. 3 and is now looking for a buyer to get things running again. As of December 2016, the company employed 57 people, according to the Longmont Economic Development Partnership. Lundie declined to comment on current workforce numbers. Lundie said the shutdown was necessary because “there wasn’t money to continue.” He declined to answer further questions, citing ongoing negotiations.

via Denver Post

Company: LOYAL3

Select VC investors: Community Investment Management, Brevet Capital Management, Trinity Ventures, Giles Raymond

Total disclosed funding: $62.4M

Loyal3, a commission-free brokerage that initially emphasized IPO shares before transforming into a discount broker, announced Wednesday it will close its doors May 19. Offering a portfolio of 70 stocks, the firm allowed beginner investors to purchase fractional shares and to engage in transactions as low as $10 and as high as $2,500. The strategy relied on batch trading, wherein Loyal3 grouped company trades and executed only once a day.

via Benzinga

Company: PepperTap

Select VC investors: Innoven Capital, Sequoia Capital India

Total disclosed funding: $52M

PepperTap – which operated in a high-competition, low-margin market – decided to shut down its main e-grocery business after months of rapid expansion showed no signs of profitability and deep discounts led to high cash burn. “Losing cash on every order (no matter how small or how controlled or how goal-oriented the burn) meant one day we will run out of cash – perhaps we could slow down the process but mathematically speaking, this was a certainty,” PepperTap co-founder Navneet Singh said while announcing the shutdown.

via TechCircle

Company: Sprig

Select VC investors: Greylock Partners, Social Capital and Sozo Ventures

Total disclosed funding: $56.7M

“No question, I’m sad that the Sprig model did not work out,” CEO Gagan Biyani said in an email circulated to the app’s users. “The demand for Sprig’s convenient, high-quality food was always incredibly high, but the complexity of owning meal production through delivery at scale was a challenge.” Sprig had raised $56.7 million to cook and deliver its own gourmet meals in the San Francisco area, but insiders said it was losing six figures monthly and could not expand the service into other cities.

via PYMNTS.com

Company: Dealstruck

Total disclosed funding: $70.1M

Dealstruck closed its doors after more than three years in business. It did not close because the customer base isn’t there or due to a lack of demand for its lending products. It closed because a deal fell through.

via Crowdfund Insider

Company: Sand 9

Select VC investors: Commonwealth Capital Ventures, Flybridge Capital Partners, General Catalyst

Total disclosed funding: $55.5M

It was revealed last month that Sand 9’s website and phone numbers were no longer operating and that its former CEO and other executives had left the company. Consultant Mark Sherwood, principal associate with Consulting Services and Associates LLC (Cupertino, Calif.), told eeNews Europe that although the piezoelectric technology showed promise Sand 9 had hit technical issues amidst changing markets and effectively outlasted investors’ patience. Sherwood told eeNews Europe in email “I can confirm the sale of Sand 9 to Analog Devices Inc. We are now about three months post acquisition, and the Sand9 executive team is gone but the meat of the company was indeed the MEMS technology that had been in development for many years.”

via eeNews Analog

Company: Karhoo

Select VC investors: David Kowitz, Jonathan Feuer, Nick Gatfield

Ultimately, [its] structure … is based on very large economies of scale … building out any transport service before it can get to that scale is extremely capital intensive … Karhoo, however, didn’t appear to have the reach with consumers to achieve anything like enough scale. [Its shutdown letter states that the] “Karhoo staff around the world in London, New York, Singapore and Tel Aviv have, over the past 18-months [sic], worked tirelessly to make Karhoo a success. Many of them have worked unpaid for the last six weeks in an effort to get the business to a better place. Unfortunately, by the time the new management team took control last week, it was clear that the financial situation was pretty dire, and Karhoo was not able to find a backer.”

Company: Beenz.com

Select VC investors: Gefinor Ventures, Apax Partners

Total disclosed funding: $73.8M

After the Internet bubble burst, e-currency companies tried to evolve by concentrating on business customers, but the collapse of a high-profile trailblazer such as Beenz shows that the Old Economy credit card companies have probably won the online shopping battle. Experts believe that online currency sites such as Beenz were overtaken as a way of shopping online by credit cards, which had the advantage of being virtually universally accepted both on and offline.

Veoh Networks

Company: Veoh Networks

Select VC investors: Shelter Capital Partners , Spark Capital

Total disclosed funding: $70.8M

…the venture was pronounced dead in a tweet today by Veoh board member Todd Dagres of Spark Capital, a Boston VC firm that invested in Veoh Networks. Dagres tweeted, “Veoh is dead. Universal Music lawsuit was the main killer. Veoh won resoundingly but was mortally wounded by the senseless suit. Next.”

Dash Navigation

Company: Dash Navigation

Select VC investors: Kleiner Perkins Caufield & Byers, Sequoia Capital

Total disclosed funding: $41M, sold for $8.3M to BlackBerry

User adoption was slow, likely because the device carried a $600 price tag (later reduced to $399), but the service won praise from many reviewers, including Om. The navigation device was designed with true mobile web access and interactivity in mind, but sales were sluggish.

Move Networks

Company: Move Networks

Select VC investors: Hummer Winblad Venture Partners, Steamboat Ventures

Total disclosed funding: $60.3M

So what went wrong? For one thing, Move Networks never reached critical mass on the consumer side of things; despite early success with ABC, Fox, the CW, and others, many media companies shied away from the technology because it required a plugin that not many consumers had installed. This created a vicious chicken-and-egg problem: How do you get people to install the plugin if it’s not being used to deliver good premium content? And how do you get good premium content unless people already have the plugin installed?

Company: Nirvanix

Select VC investors: Valhalla Partners, Mission Ventures

By trying to play in the pure storage business, Nirvanix found itself in a market that, over the past five years, became increasingly commoditized by Amazon Web Services, Windows Azure and now Google Compute Engine, which have all been engaging in a price war. With no service to offer on top of its storage, Nirvanix did not stand a great chance of differentiating from such large competitors.

Expand Networks

Company: Expand Networks

Select VC investors: The Challenge Fund-Etgar, Tamir Fishman Ventures

Total disclosed funding: $69M

Although Expand Networks won appreciation for its technology, its operational performance was much less impressive. The court documents show that it was losing $ 250,000 a month and had $ 11 million revenue in 2010. Although it was a pioneer in its field, it failed to make a breakthrough.

Company: Ecast

Select VC investors: Doll Capital Management, Crosslink Capital

Total disclosed funding: $66.8M

The San Francisco-based technology firm’s board of directors voted for an immediate shutdown after the company failed to raise enough capital to continue operating. “We worked diligently for this not to happen,” said Ecast vice-president of network operations Scott Walker. “We appreciate all the support from jukebox operators and the industry.”

via Vending Times

Company: Edgix

Select VC investors: Battery Ventures, Venrock

“Companies that joined in during the last few years are primarily the ones dropping out. Many never had a sound business model to begin [with]. Edgix is one example. The company was basically a carbon copy of Cidera and other ISP caching solutions, with little new to offer. They basically launched a platform and went into business believing they would quickly generate revenue. Unfortunately for companies such as Edgix, once you continually say to investors, ‘There is a market out there and we can own it,’ you start to believe it yourself.”

via Newsday

DoubleTwist

Company: DoubleTwist

Select VC investors: Institutional Venture Partners, Boston Millennia Partners

Total disclosed funding: $56.6M

Two months later, DoubleTwist bowed to the inevitable. “No one was surprised by this,” Williamson told the San Francisco Chronicle, “but everyone was disappointed. We had a great product and a great team — we just didn’t have the revenues.”

via Bio-IT World

Company: Akimbo

Select VC investors: Zone Ventures, Draper Fisher Jurvetson

Total disclosed funding: $54.7M

The company had raised $4 million earlier this year from existing investors, but Chantel said the company was looking to raise $8 to 10 million to become cash positive with its new white-label strategy. Unfortunately, “there wasn’t enough runway to execute the plan,” he said.

Sequoia Communications

Company: Sequoia Communications

Select VC investors: Tallwood Ventures, BlueRun Ventures

Luis Arzubi, a general partner at Tallwood Ventures, told EE Times that Sequoia (San Diego) was forced to cease operations despite having working parts and customers because it failed to raise the needed capital to continue. The company and its investors “basically had no choice,” he said.

via EE Times

Company: govWorks

govWorks, the brilliant idea, has been bungled badly in execution. Arrogant and overly aggressive, company officials have alienated key government partners and vendors. They have burned through millions in false starts and other fumbles, and it has lost time and ground to competitors. One of the co-founders has been forced out by the board and other senior executives. Now directors are looking for a more seasoned manager to help Isaza Tuzman run the company. Harvard Business School case study department, here they come.

via CNN Money

Startup Failures: Total funding from $25M — $50M

Company: Buzzer

Select VC investors: Lerer Hippeau, Sapphire Ventures, Michael Jordan, Naomi Osaka

Total disclosed funding: $33M

“Since our founding, Buzzer aimed to reimagine live sports consumption in partnership with rights holders, facilitating connection with Gen Z fans and addressing the generation gap in live viewership facing our industry — first as a D2C mobile app, and recently as a technology provider. As of today and with a heavy heart, we are formally winding down our operations. Recent fundraising developments and market dynamics have informed this outcome, despite our very best efforts to continue building Buzzer.”

Cana Technology

Company: Cana Technology

Select VC investors: The Production Board

Total disclosed funding: $30M

“Cana, the company which was building an appliance that they claimed could create and customize virtually any beverage, shut down last week, The Spoon has learned. According to numerous Linkedin posts from previous employees, the company could not secure funding and laid off all of its employees last week. Cana, which had raised $30 million in January last year, promised to have the product ready to ship sometime this year. But despite having a working prototype and brand partners in place, Cana could not raise the ‘funding necessary to build a production line for manufacturing and shipping devices.’”

via The Spoon

Company: Wyre

Select VC investors: Great Oaks Venture Capital, Plug and Play Accelerator, Pantera Capital

Total disclosed funding: $28M

“At one point, Wyre was set to be acquired for over $1 billion. Now, it’s shutting down.  The crypto payments firm said Friday evening that it plans to wind down its operations, citing ‘market conditions.’ ‘We made this decision to protect the best interest of our key stakeholders and customers,’ the firm said in a tweet. ‘This decision is not due to any regulatory agency direction. Wyre continues to secure customer assets.’”

via The Block

Company: Tascent

Select VC investors: NEC, Tano Capital

Total disclosed funding: $38M

“Multimodal biometric identification company Tascent has folded. Its tombstone will not be markedly different than many other companies in its niche. It appears to have been in the wrong part of its own business cycle when the industry cycle sagged… …[Tascent founder Alastair Partington] reflected on the experience in a Medium post which suggests Tascent struggled to establish the kinds of manufacturing partnerships that could support its scaling operation.”

via Biometric Update

New Age Eats

Company: New Age Eats

Select VC investors: IndieBio, Supernode Ventures, SOSV

Total disclosed funding: $32M

“Cultivated pork maker New Age Eats closed because the company no longer had enough money to keep operating, founder and CEO Brian Spears announced on LinkedIn… …The company had little money, a fair amount of debt, no new investment dollars and no immediate path to product commercialization. Given these realities, Spears said in an interview, there was no choice but to shut down the company and repay creditors.”

via Food Dive

Food Rocket

Company: Food Rocket

Select VC investors: Baring Vostok Capital Partners, Circle K Ventures

Total disclosed funding: $27M

“Ultrafast grocery delivery firm Food Rocket, backed by convenience retail giant Couche-Tard, has shut down …, having burned through its funding and finding itself unable to bring in additional capital. ‘We believe that the rapid delivery industry has disrupted the retail market and changed consumer behaviors,’ CEO and founder Vitaly Alexandrov commented. ‘Unfortunately, current economic conditions reshuffled the tech market and presented significant challenges in the venture capital market.’”

Company: Nuri

Select VC investors: Sony Financial Ventures, Digital Currency Group, Earlybird Venture Capital

Total disclosed funding: $49M

“German cryptocurrency exchange Nuri has closed its business after struggling to find investors. The Berlin-based exchange with over 500,000 customers filed for insolvency in August after ‘challenging market developments and subsequent effects of financial markets,’ the company said in an earlier statement… …Nuri is not the only cryptocurrency exchange that has been affected by the crypto bear market — many exchanges including Coinbase, Gemini, Robinhood, Crypto.com and BlockFi have all had to cut staffing after suffering significant losses.”

via Blockworks

Company: GloriFi

Select VC investors: Undisclosed

Total disclosed funding: $45M

“GloriFi, a neobank billed as a bank for the ‘anti-woke,’ is shutting down two months after its turbulent launch, according to a message posted on the platform’s website on Monday. The platform’s closure follows an October story by the Wall Street Journal that detailed the Dallas-based firm’s chaotic start, including missed launch dates, workplace issues and vendor disputes. GloriFi founder Toby Neugebauer stepped down as CEO following the Journal report and became the firm’s executive chairman.”

via Banking Dive

Company: Lantern

Select VC investors: Drizly

Total disclosed funding: $40M

“At first, Lantern’s light seemed to shine bright. The e-commerce company quickly became the top marijuana delivery platform in Massachusetts after spinning off from Drizly in 2021. Propelled by a $40 million parting investment from its former parent, Lantern ads popped up everywhere in the Boston region — billboards, sidewalk trash cans, and even gas station pumps. But now, just as quickly, Lantern is being snuffed out: Chief executive Meredith Mahoney has announced that the company will cease operations at the end of January, citing regulatory hurdles in other states that doused its expansion plans.”

Fifth Season Collection

Company: Fifth Season Collection

Select VC investors: Drive Capital, Grit Ventures

Total disclosed funding: $36M

“Fifth Season’s seemingly abrupt closure is likely not the last we’ll see for this sector. Controlled environment agriculture — and vertical farming in particular — has long been the subject of much hype and promise. But to date, there’s very little public data around what works and what doesn’t in terms of efficiency and return on investment. Large farming facilities are extremely capital intensive. CNBC recently called out Fifth Season’s Ohio facility that was planned for 2023. The 180,000-square-foot vertical farm would require a $70 million expenditure — or roughly $17 million per acre. And while demand for locally grown, pesticide-free food is growing, it’s sometimes not enough to offset the cost of operating these high-tech operations.”

via AgFunderNews

Company: ProntoPiso

Select VC investors: Picus Capital, Global Founders Capital, Global Growth Capital

Total disclosed funding: $29M

“The CEO explained yesterday that he took over the management of ProntoPiso after the firm changed its business model and argued that, shortly after, the pandemic punished the start-up, which now functioned as a technological platform for real estate agents. ‘We were very close to reaching an objective that I had set myself when starting the project, but in the end it couldn’t be’, he admitted.” 

[This excerpt has been translated from Spanish.]

via Expansión

Company: Curb Food

Select VC investors: EQT Ventures, Point72 Ventures

“…When DI reported on [Curb’s] financing round last year, the company had seven brands of food from different parts of the world, and had expanded to several Swedish cities. But now the restaurants have closed in Bolt and Foodora, and the website is down.  CEO Carl Tengberg writes in an email to Breakit that after careful consideration they have chosen to close down the business.  ‘With a capital-intensive model in a uniquely weak capital market, the conditions for building the company we intended to build no longer exist.’”

[This excerpt has been translated from Swedish.]

via Dagens Industri

Company: SHOPX

Select VC investors: Fung Strategic Holdings 

Total disclosed funding: $48M

“Bengaluru-based ecommerce startup ShopX has filed for insolvency and bankruptcy under Section 10 of the Insolvency and Bankruptcy (IBC) code, according to the company’s filings with the Registrar of Companies (ROC). ‘ShopX has been instrumental in co-creating the e-B2B industry. Over time, it has become unviable to operate at scale given the low margin profile of the industry, and hence, the decision to shut down operations. We have focused on an orderly and ethical windup, respecting all company obligations,’ the company spokesperson told Entrackr.”

via Your Story

Bolt Mobility

Company: Bolt Mobility

Select VC investors: Fuel Venture Capital, Sherpa Capital 

Total disclosed funding: $42M

“If you think clogging the toilet at a party and Irish-exiting is bad, listen to this: City officials across the country are figuring out what to do with hundreds of dead e-scooters and bikes left behind by micromobility startup Bolt after it abruptly shut down. And the company’s ghosting anyone who tries to call or email… …Some officials were aware that Bolt was in the process of powering down, but were caught off guard when the company skipped protocol to do so seemingly overnight.”

via Morning Brew

Company: Propzy

Select VC investors: Breeze Investment, Frontier Digital Ventures, Next Billion Ventures

Total disclosed funding: $37M

“Vietnamese startup Propzy has commenced closure of its Vietnam business due to financial hardship and global economic instability. Propzy CEO, John Le confirmed the startup had ceased operating Monday. ‘We had raised our $25-million Series A round in mid-2020, which was immediately met by a prolonged pandemic compounded by global financial market instability from the Russian war in Ukraine,’ StreetDealAsia cited Propzy’s email to employees. ‘Our efforts to grow the business during this period resulted in absorbing significant losses that we were not able to recover from given the continual lockdown in Vietnam.’”

via VNExpress

B3i Services

Company: B3i Services

Select VC investors: China Pacific Insurance, Munich Re, Allianz, Swiss Re

Total disclosed funding: $26M

“B3i, the blockchain insurance venture backed by more than twenty insurers and reinsurers, is to shut down. The company was incorporated in Switzerland in 2018, and its funding came entirely from insurance firms. An inability to close a further funding round triggered the insolvency. A key question is whether this failure will be attributed to another large consortium, the technology, timing, agility, or something else. Consortia are notoriously hard.”

via Ledger Insights

Company: Apervita

Select VC investors: Pritzker Group Venture Capital , MATH Venture Partners, Optum Ventures, GE Ventures

“Apervita, which once claimed to be the first health analytics marketplace, has ceased operations as of October 1.   Chief Informatics and Innovation Officer Blackford Middleton wrote in a post on LinkedIn that the company had failed to drum up enough resources in its second round of funding.”

via Healthcare IT News

Company: AWOK

Select VC investors: Al Faisaliah Ventures, StonePine Capital Partners

Dubai-based ecommerce platform Awok has shut down just a little over a year after raising $30 million in one of the largest investment rounds for an ecommerce startup in the region. […] “Awok’s journey as a mass-market e-commerce player has unfortunately come to an end and the company has ceased operations,” reads the statement. […] MENAbytes has spoken with multiple employees at Awok all of which have confirmed that the company has had been in crisis since the start of 2020. All of them have told us that the employees weren’t paid salaries since January and the majority of them left the company in March. The employees who spoke to us have also told us that the employees who left this year did not receive their end of service benefits as well.

via  MENAbytes

Company: Hollar

Select VC investors:  Pritzker Group Venture Capital, Lightspeed Venture Partners, Kleiner Perkins Caufield & Byers

Total disclosed funding:  $48M

Los Angeles-based Hollar launched in 2015 to help users find dollar store-like bargains on branded consumables, ranging from kitchen goods to toys to beauty products. […] Hollar’s thesis was that dollar store denizens would buy multiple products at a time, thus alleviating pressure on shipping costs. But a source close to the situation says the unit economics never panned out. The company is said to have started looking for a buyer late last year, and is in final negotiations with retailer Five Below, which would bring on more employees and at least some of the other assets. Hollar’s site and app are not expected to survive.

Company: Stockwell

Select VC investors:  DCM Ventures, New Enterprise Associates, Google Ventures

Total disclosed funding: $47M

Stockwell AI entered the world with a bang but it is leaving with a whimper. Founded in 2017 by ex-Googlers, the AI vending machine startup formerly known as Bodega first raised blood pressures — people hated how it was referenced and poorly “disrupted” mom-and-pop shops in one fell swoop — and then raised a lot of money. But ultimately, it was no match for COVID-19 and the hit it has had on how we live. TechCrunch has learned and confirmed that Stockwell will be shutting down, after it was unable to find a viable business for its in-building app-controlled “smart” vending machines stocked with convenience store items.

Company: Sorabel

Select VC investors:  OpenSpace Ventures, Shift Accelerator, Kejora Ventures

Indonesia’s fashion e-commerce startup Sorabel is shutting down its operations by end of July [2020] after struggling to stay afloat amid the COVID-19 pandemic, an investor in the startup confirmed to DealStreetAsia. […] In a letter to Sorabel employees, the company said it had done its best to save the business but was left no choice but to close down. “Due to this liquidation process, we have to terminate employment contracts with no exception, effective July 30. I am certain that no one would ever expect this to happen,” the letter, quoted by Daily Social, said.

via DealStreetAsia

IgnitionOne

Company : IgnitionOne

Select VC investors :  SoftBank Capital, ABS Capital Partners

Total disclosed funding : $40M

While the business had turned the corner this year and had the best year to date for % growth, revenue and EBITDA, our liquidity was severely hampered by our inability to renew our line of credit from existing lenders. The underlying cause of this was client concentration and that we operate in an industry where we are required to pay for inventory from suppliers long before our customers remit payment to the Company.

Company : Omni

Select VC investors : Highland Capital Partners, Precursor Ventures 

Total disclosed funding : $35M

They realized that the core business was just challenging as architected… The service was really great for the consumer but when they looked at what it would take to scale, that would be difficult and expensive.

Miaoshenghou

Company : Miaoshenghou

Select VC investor s : Capital Today, Eastern Bell Capital

Total disclosed funding : $34M

The rent for a shop of more than 100 square meters is about [~$5,050 USD] on average in Shanghai; with other costs approximately [$10,100 USD to $11,500 USD]. Even if we automate, such a premium is not enough to offset the sensitivity of consumers to prices.

via China Economic Net

Company :   CrediFi

Select VC investors : Battery Ventures, Liberty Technology Venture Capital, Viola Ventures

Total disclosed funding : $29M

The company, led by CEO Ely Razin, had been in talks to sell to firms including Moody’s — which has been ramping up its real-estate data business — but no deal ever went through, according to a senior employee, whose account was later confirmed by sources familiar with the talks. 

via TheRealDeal

Kettlebell Kitchen

Company : Kettlebell Kitchen

Select VC investors : North Castle Partners

Total disclosed funding : $27M

The prepared meal delivery business is tough to scale, given all the supply chain, safety requirements, and logistics. Now we have to see if Kettlebell Kitchen is a canary in the prepared meal delivery coalmine.

Company: Layer

Select VC investors: Bloomberg Beta, Salesforce Ventures, Promus Ventures, Data Collective

In an email sent out to users, head of Layer Shaun VanWeelden wrote, “On the business side, we definitely messed up and have learned a lot in the process. […] I also recognize the timeline is very tight, but it is that way for our mutual safety. What I would not want to happen is that I say we can continue to support you for 6 months and then 4 months from now, we have a critical outage that we can just not resolve with our team. That would put us both in a much, much worse position.”

via head Shaun VanWeelden quoted in GetStream

Company: Call9

Select VC investors: Index Ventures, Y Combinator, Anne Wojcicki

Total disclosed funding: $34M

The company had raised $34 million in venture capital but struggled to secure additional capital to scale its business and manage the high cost of running a health-care business. The company said it laid off about 100 employees in the process of winding down.

Swell Investing

Company: Swell Investing

Select VC investors: Pacific Life Insurance

The California-based investment platform was founded in 2017 on impact investment principles. In a statement on the company’s website, it was announced that Swell would no longer be accepting new clients from 24 July. “Our journey began as a mission that every dollar you invest would have a positive impact on the world,” the statement reads. “Together, we built a product that allows you to invest in companies innovating to solve global challenges.” It continues: “While we’re incredibly proud of what we’ve accomplished together, Swell was not able to achieve the scale needed to sustain operations in the current market. As a result, we will be closing.”

Company: Arivale

Select VC investors: Spectrum Health Ventures, Maveron, Polaris Partners

Total disclosed funding: $49.6M

The decision was a surprise to many Arivale employees and customers. In a message to Arivale customers this afternoon, the company attributed the decision to “the simple fact that the cost of providing the service exceeds what our customers can pay for it.”

via Geekwire

Aria Insights

Company: Aria Insights

Select VC investors: Lux Capital, Bessemer Venture Partners, General Catalyst

Total disclosed funding: $46.5M

The company was primarily known for its Persistent Aerial Reconnaissance and Communications (PARC) platform, a tethered drone that provided secure communication and continuous flight to customers. It relied heavily on law enforcement and military contracts.

via The Robot Report

Company: ZipGo

Select VC investors: Essel Infraprojects, Orios Venture Partners

Total disclosed funding: $43.7M

ZipGo had earlier suspended operations in Bangalore and Mumbai two months ago, before completely shuttering down operations in other cities including Delhi NCR, Jaipur, Kolkata, and Pune.

via Live Mint

Alta Motors

Company : Alta Motors

Select VC investors : Harley-Davidson

Total disclosed fundin g : $31.2M

A report from Asphalt and Rubber suggested that Alta Motors was ceasing operations. According to an anonymous source, the company has halted business operations effective immediately, sending staff home early. Alta Motors currently has over 70 dealers across the country, and has already begun informing some of the closure.

via Electrek

Eleven James

Company : Eleven James

Select VC investors : Great American Capital Partners, Jason Saltzman

Total disclosed funding : $40.1M

…Eleven James tried to raise additional funds to allow them to continue operating. When the company was unable to raise said funds, the company’s main lender pulled its existing line of credit, causing the company’s management and board to begin winding down operations around the middle of June 2018.

via Hodinkee/Bloomberg

Company : Liquavista

Select VC investors : Amazon, Philips, Samsung Electronics, SenterNovem

Total disclosed funding : $35.6M

Liquavista, a screen tech company Amazon acquired five years ago, has shut down. News of Liquavista’s closure was first reported by Nate Hoffelder’s The Digital Reader site and confirmed by the company. Rumblings of Liquavista’s potential closure have been bouncing around the e-reader community for more than six months. It remains unclear if Liquavista’s work has been brought inside Amazon and moved to other parts of the organization, or if it was shut down entirely. Amazon declined to release further details.

via GeekWire

Company : Yogome

Select VC investors : 500 Startups, Insight Venture Partners

Total disclosed funding : $36.5M

The company’s shutdown, first reported by Forbes Mexico, is tied to allegations that Yogome’s co-founder and CEO, Manolo Diaz, had been committing fraud and mismanaging funds. A video obtained by Forbes shows what appears to be a team meeting in which employees were informed of the news. The speaker said (translated from Spanish): “The conduct by the previous management has compromised finances and integrity of the company by poss12–ibly having committed fraud. The board of directors, as well as its investors and financial advisors, have met over the past few days to investigate and analyze the current state of the company as well as possible fraud… Based on an analysis of the economic situation of the company, and the effects of the crime of fraud, the decision has been made to end the operation definitively, since the company is in a situation of no return.”

via EdSurge

Chef’d

Company: Chef’d

Select VC investors: CircleUp

We have had some unexpected circumstances with the funding for the business. Due to setbacks with financing, unfortunately, we are ceasing operations for all employees, effective today, July 16, 2018. If we had been successful with these funding efforts, this difficult decision would have been avoided.

The meal kits space is notoriously expensive, with many firms facing high marketing expenses as they work to attract and retain customers, many of whom flee after just a few times using the service. There also has been growing evidence that investors, concerned by high operating costs and the lack of a clear path to profitability, are reluctant to invest further in meal kits, a factor that ultimately contributed to the demise of Chef’d.

via FoodDive

Company: Navdy

Select VC investors: Eniac Ventures, Ludlow Ventures, Promus Ventures, Formation 8

No one ever says hardware is easy, and today it looks like another promising startup has hit a wall. Navdy, which made an in-car heads-up display that projected info like navigation on to your windscreen, has been sending out notices to customers and others who might have claims against the company, as part of a General Assignment for the Benefit of Creditors. …the heads-up display market is very crowded … and even more so, considering that this isn’t a mainstream product today. Indeed, for many the jury may still be out on whether a display on your windscreen is less or more distracting than other kinds of displays and interfaces. Together, all this makes for a tricky product/market fit.

Doppler Labs

Company: Doppler Labs

Select VC investors: Sterling VC, Acequia Capital

Total disclosed funding: $41M

The Here One [headphones] was a sales flop. In a candid profile, Doppler told Wired that Here One only sold 25,000 units, well below the hundred thousand-plus it expected. As a result, investors were unwilling to put more money into the company, and couldn’t find a reasonable buyer. [Doppler Labs founder] Kraft places the blame squarely on the fact that Doppler was in the hardware business — a cutthroat market that requires massive amounts of capital to get started, and pits you against the likes of Apple, Microsoft, and Amazon.

Company: Klout

Select VC investors: Venrock, Kleiner Perkins Caufield & Byers, Greycroft Partners

Klout was founded in 2009 by Joe Fernandez. …Ranking people by importance or influence turned out to be a strong enough idea to raise four rounds of venture funding from top-tier firms totaling $40M. Eventually, it was sold in 2014 for $200M to Lithium Technologies …Lithium CEO Pete Hess discussed the shutdown in an email to customers. “The Klout acquisition provided Lithium with valuable artificial intelligence (AI) and machine learning capabilities but Klout as a standalone service is not aligned with our long-term strategy.”

Company: Otto

Select VC investors: Greylock Partners

The startup, first founded in 2013, was planning on bringing the lock to market in the first couple of months of 2018 after having been acquired by an unnamed company that was going to handle the shipping of the product. …the long and the short of it is that Otto entered a round of financing, and [was] approached by a company that offered acquisition rather than funding, Otto agreed, and then the acquisition fell through.

via TechRadar

Company: Plaxo

Select VC investors: Sequoia Capital, Globespan Capital Partners, Harbinger Venture Management

Total disclosed funding: $35M

Comcast had hoped to turn Plaxo into a way “to bring the social media experience to mainstream consumers,” according to a blog post by the startup’s founders at the time of the acquisition. Among the ideas floated: discovering new TV shows to watch based on friends’ recommendations and sharing photos with friends and family that they could view “online, at work, on their mobile device, or in their living room watching TV.” But Plaxo never expanded beyond being a utility for syncing contacts.

Company: Bluesmart

Select VC investors: FundersClub, Endeavor Catalyst, Tsing Capital, Fairhaven Capital, Pear

Earlier this year when airlines started banning luggage with lithium-ion batteries in their cabins, smart luggage maker Bluesmart had a problem — one that ultimately led to the company’s demise. Bluesmart’s bags included a battery that’s not meant to be taken out, and customers needed to be able to remove it in order to fly. While the company eventually posted elaborate directions on how to remove the component on its site, doing so rendered many of the features of the suitcase useless. Though Bluesmart was looking into ways to change how its suitcases operate, the luggage ban was one that ultimately resulted in the closing of the business. In a statement Tuesday, Bluesmart said that the new rules “put our company in an irreversibly difficult financial and business situation.”

Pearl Automation

Company: Pearl Automation

Select VC investors: Accel Partners, Shasta Ventures, Venrock

Total disclosed funding: $50M

Early product sales disappointed, which was exacerbated by a high burn rate. The Pearl Automation team received several “acqui-hire” offers, but opted instead to shut down and part ways, according to a source close to the situation. Pearl was founded in 2014 by three ex-Apple iPod engineers, and hired dozens of other ex-Apple employees. It eventually settled on the wireless rear-view camera as a first step in developing autonomous driving technology — and raised $50M in VC funding from Accel, Shasta Ventures, Venrock, and Wellcome Trust.

Company: Raptr

Select VC investors: Accel Partners, DAG Ventures, Tenaya Capital

Raptr, the online optimization platform founded by former pro gamer Dennis “Thresh” Fong a decade ago, is about to be shuttered. “We are sad to announce that we will be closing Raptr on September 30th, 2017. We want to start by thanking you for your support over the past 10 years,” Fong announced on September 1. “The world is different today than when we first launched Raptr. Many companies offer game optimization tools. Having an independent platform to do this is no longer necessary.”

via gamesindistry.biz

SideCar Technologies

Company: SideCar Technologies

Select VC investors: Google Ventures, Union Square Ventures, Softbank Capital

Total disclosed funding: $36.3M

Sidecar Technologies Inc., a smaller rival to Uber whose investors include Alphabet Inc.’s Google Ventures and British billionaire Richard Branson, said it is shutting down its ride-sharing and delivery service and reassigning its staff to new projects. The San Francisco startup, which was co-founded by Sunil Paul in 2011 and says it has raised $39 million in financing, cited a capital disadvantage to its competitors for the reversal. Uber has raised more than $12 billion in debt and equity while Lyft Inc. has collected about $1 billion in funding.

Company: Stayzilla

Select VC investors: Matrix Partners India, Nexus Venture Partnerss

Total disclosed funding: $33.5M

Stayzilla CEO and co-founder Yogendra Vasupal was particularly reflective in his post, explaining how, as a founder, his own objectives were altered as the company ramped up. “The initial 7 years were all about having negative working capital, positive cash flow and a sustained ability to fund our own growth. Those were the only metrics we tracked. In the last 3–4 years, though, I can honestly state that somewhere I lost my path. I started treasuring GMV, room-nights and other ‘vanity’ metrics instead of the fundamentals of cash flow and working capital,” he explained. Note: Less than a month after the closure announcement, Vasupal was arrested for fraud in a bizarre case involving Stayzilla business dealings. Read more here .

via Iceland Review

Company: Mobeam

Select VC investors: Glu Mobile, Greycroft Partners, Sequoia Capital, BOLDstart Ventures

Total disclosed funding: $39.8M

Another company’s dreams of changing the way we use coupons have ended in disappointment. Mobeam is no longer promising to “bring consumers one step closer to phasing out paper coupons entirely,” as it once did. Instead, it has now sold off its technology to Samsung, and has left the coupon industry trying to make something out of the new mobile couponing standard it helped to create. Mobeam launched back in 2010, pitching a complex solution to a problem that most couponers didn’t know exists: Most retail scanners can’t read a barcode off a mobile device.n 2015 it was announced that NBC was going to develop a quiz show based on the game, which was supposed to premiere in spring 2017.

via Coupons in the News

Plain Vanilla Games

Company: Plain Vanilla Games

In 2015 it was announced that NBC was going to develop a quiz show based on the game, which was supposed to premiere in spring 2017. “We placed our bets on the extensive collaboration with the television giant NBC. One could say that we placed too many eggs in the NBC basket. We have spent a lot of time and energy on developing the show. When I received the message from NBC that they were canceling the production of the show, it became clear that the conditions for further operation, without substantial changes, were gone,” [CEO Þorsteinn B. Friðriksson] stated.

Company: Shoes.com

Select VC investors: N/A

Total disclosed funding: $36.5M

Doug Stephens, founder of consultancy Retail Prophet, said the company suffered from having too few managers from the fashion industry and too many from the technology sector. And customer service “wasn’t where it needed to be to give online customers the level of confidence necessary – especially in such a tricky category … It seems a matter of biting off way more than they could chew through a spate of acquisitions. Despite all the appearances of growth, market awareness was still quite low.”

via The Globe and Mail

Company: Carrier IQ

Select VC investors: Accel Partners, CRV, and Mohr Davidow Ventures

Knowledge of what (our) software tracked unbeknownst to the average user clearly hit a nerve with a public already skeptical about how private information is regarded by large corporations and other organizations for their own purposes … And so, unsurprisingly, following the revelations, there was a windfall of announcements about which companies were using it (and were not using it) to collect information; lawsuits over privacy violations and legislation drafted to tighten controls for the future. Some of those class-action suits, it appears, have been settled. As AT&T did not acquire the full company, we understand that it will not be liable for any outstanding litigation or settlements against CIQ.

Company: Homejoy

Select VC investors: First Round Capital, Google Ventures, Max Levchin

Total disclosed funding: $39.7M

CEO Adora Cheung said the “deciding factor” was the four lawsuits it was fighting over whether its workers should be classified as employees or contractors. None of them were class actions yet, but they made fundraising that much harder. “A lot of this is unfortunate timing. The [California Labor Commission’s] Uber decision … was only a single claim, but it was blown out of proportion,” she told Re/code.

Laguna Pharmaceuticals

Company: Laguna Pharmaceuticals

Select VC investors: Sante Ventures and Versant Ventures

Total disclosed funding: $34.5M

Two months into its roughly 600-patient initial Phase 3 trial, called Restore SR, researchers started to see side effects that would not have enabled Laguna to market the drug as widely as they had initially anticipated, [Laguna CEO Bob] Baltera said. “We were actually very surprised,” he said. “The [prior] Phase 2 study was robust.” Baltera declined to say much about the side effects, describing them only as “safety signals.” “The normal response in this business is to find a way forward,” Baltera said. “But it just wasn’t going to be commercially viable. Rather than trying to find any path forward, we decided to shut the company down.”

Company: Healthspot

Select VC investors: BlueTree Allied Angels

Total disclosed funding: $32.7M

Jason Gorevic, CEO of telemedicine company Teladoc, expressed his belief that there are three critical elements to success in this industry segment: the technology platform, clinical capabilities and consumer engagement. “Consumer engagement is hard to do,” Gorevic said. This is where HealthSpot may have fallen down. Teladoc has two revenue streams: a per-member, per-month fee it charges its partners, plus a per-visit fee. “Because we have both of those revenue sources, we can pour that money back into our customers.” … Also, Teladoc is purely a software company, so it doesn’t have the overhead associated with building and delivering kiosks … A bigger issue, according to [CEO of American Well Roy] Schoenberg, is that HealthSpot required patients and providers to pre-arrange appointments; it was not truly telemedicine on demand. “You actually have to build a lot of administration around it,” he said.

via MedCity News

Company: Nebula

Select VC investors: Highland Capital Partners and Kleiner Perkins Caufield & Byers

Total disclosed funding: $25M + $3.5M in debt

At the same time, we are deeply disappointed that the market will likely take another several years to mature. As a venture backed start up, we did not have the resources to wait.

Company: Nanochip

Select VC investors: New Enterprise Associates, JK&B Capital

Total disclosed funding: $48.8M

“No matter what, you’ll need $70 million to take [Nanochip’s technology] into production,” he [CEO Gordon Knight] said. That’s a large hurdle considering established chip companies have not been very active buyers lately and venture investors only put $327 million in chip deals in the first half of this year – not even half the amount for the same time last year, according to VentureSource, a research unit of Dow Jones & Co.

Company: Joost

Select VC investors: Sequoia Capital, Index Ventures

Joost attracted investment – $45 million to be exact – because it appeared to be the antithesis of YouTube, suspected by the networks of enabling and then turning a blind eye to piracy. Indeed, news coverage at the time billed Joost as a “YouTube killer.” But while YouTube proved popular, was acquired by Google and came to dominate web video, adoption of Joost was stunted by its peer-to-peer technology, which allowed high-quality video but required a clunky software download.

via Crain’s New York

Company: Pixelon

Select VC investors: Advanced Equities

“In April, Pixelon employees and investors were surprised to learn that the real name of Michael Fenne, the company’s founder and former chairman, was Paul Stanley. And they were more shocked to find out that Paul Stanley had been on Virginia’s most-wanted list for several years, after skipping bail following a stock-swindling conviction.”

Company: Digg

Select VC investors: Highland Capital Partners, Greylock Partners

Total disclosed funding: $44M

“In the soon-to-be end, Digg will become known as the first network to die from social fatigue,” wrote Mike Phillips in June 2010. “Facebook and Twitter are booming, LinkedIn is holding steady and even Myspace seems to have settled into a niche. But Digg is in a deadly, unrecoverable tail spin. “The fact is, people – real people – are beginning to tire. Submit this, upload that, vote on this, ‘like’ that, be my ‘friend’, check in here, suggest this, retweet that… there’s already so much to do. The only thing left to ‘Digg’ is a grave.”

via The Guardian

Company: ThumbPlay

Select VC investors: i-Hatch Ventures, Softbank Capital

Our source tells us that the sale is a do-or-die scenario because the company is running out of cash: “The price is very low. No one is making any money.”… the music industry has been hit hard with cannibalisation from digital sales and piracy. And the promise of new revenues, on the back of the explosion in mobile and internet usage, have yet to materialise for most music companies, with Apple’s iTunes dominating the market with more than a 60 percent share.

Company: Color Labs

Select VC investors: Bain Capital Ventures, Sequoia Capital

Nevertheless, the app simply failed to gain much traction with users, with reviewers often commenting that Color appeared to be an app trying to solve a problem that didn’t seem to exist.

Company: Goodmail Systems

Select VC investors: Doll Capital Management, Emergence Capital Partners

Daniel Dreymann, cofounder and CEO of Goodmail, said the biggest reason for the shutdown was an aborted acquisition attempt by a firm he would only call a “Fortune 500 company.”

via Direct Marketing News

Company: Xeround

Select VC investors: Benchmark Capital, Ignition Partners

Total disclosed funding: $39.8M + $4M of debt

Xeround is shutting down their MySQL Database as a Service (DBaaS) because their free instances, while popular, simply did not convert into sufficient paid instances to support the company.

via Head in the Clouds

Company: Webvisible

Select VC investors: Sutter Hill Ventures , Redpoint Ventures

“Even with all our efforts to recover throughout this past year, we found ourselves in a position in which the debt load of the company was simply too much to overcome. Our bank foreclosed on its loan which means they are taking over the company’s assets and collecting all remaining payments. As a result they have forced the company to shut down.”

Company: ArsDigita

Select VC investors: Trident Capital, Greylock Partners

The technical and managerial incompetence of the VCs and those they hired drove the company into the ground. All but 10 of the 240 employees were fired, laid off, or quit. All of the $40+ million in venture capital was squandered. The monthly operating profit turned to loss as more talentless executives were hired who threw out the company’s old, useful products and put their blind faith in engineers who spent millions building complicated software that solved no business problems.

via Content Wire

Company: Optiva

Select VC investors: AltoTech Ventures, NGEN Partners

Like most other nanotech companies, Optiva took a while to get its product out. It shifted focus, its technology changed, as did the market. Its “polarizer” technology was supposed to be sold for use in wrist watch, calculator and PDA displays, but as VentureWire reports, suddenly the people who already made the displays found a glut of scrap material, which was also suitable, thus resulting in a rapid drop in market prices.

via SiliconBeat

Company: Flooz.com

Select VC investors: Oak Investment Partners, Maveron

Total disclosed funding: $51.5M

While the company says it suffered in an unfavorable economic climate, credit card fraud also played a part in its demise. “We have been the victims of organized credit card fraud,” says Levitan, who says Flooz was hit for $300,000 for transactions charged to card numbers stolen by an international crime ring. The company’s credit card processor was holding $1 million in Flooz’s funds to cover chargebacks, says Levitan.

via Internet Retailer

Company: AdBrite

Select VC investors: Sequoia Capital, Artis Capital Management

Despite claiming to be the largest independent ad exchange and at one time being seen as a serious competitor to Google Adwords, it seems that they were unable to make enough money or sell the company to potential buyers.

via Performance Marketing Insider

Microdisplay Corporation

Company: Microdisplay Corporation

Select VC investors: Mobius Venture Capital, BlueRun Ventures

“We knew that we were entering a mature, competitive market, and that we had a narrow window in which to succeed. We developed a TV with a unique display technology, excellent picture quality and a low cost, and we saw an opportunity. Unfortunately, the recent uncertainty in the TV industry, highlighted by particularly slow sales in May, made it virtually impossible to introduce a new type of projection TV at this time.”

Company: Cuil

Select VC investors: Tugboat Ventures, Greylock Partners

…if it has failed, it’s probably because the name is tough to spell and unintuitive to pronounce (every story about Cuil has to remind you that it’s pronounced “cool”), and because it couldn’t live up to its hyperbolic claims of outperforming Google.

via Switched

TrueSAN Networks

Company: TrueSAN Networks

Select VC investors: JT Venture Partners, Spring Creek Partners

…a turnaround plan that founder and CEO Tom Isakovich presented to its board of directors last week failed to convince the company’s backers to stump up more cash.

via Network Computing

Asempra Technologies

Company: Asempra Technologies

Select VC investors: US Venture Partners, Polaris Partners

Why did Asempra cease trading – which, by the way, happened so fast its PR agency knew nothing of the asset sale to Bakbone? The probability is that it ran into cash flow problems in the recession and the investing VCaps were reluctant to go through another funding round. Three million dollars does not look like anywhere a worthwhile exit strategy for the three VC firms, not with $29m in the Asempra can, but it is something to pull out of the failed venture.

Company: Entellium

Select VC investors: Ignition Partners, Sigma Partners

Just because you run a private company that does not have to file quarterly financial statements with the SEC does not make it okay to cook your books. The CEO and CFO of Seattle-based CRM firm Entellium found that out the hard way. They were arrested by the FBI earlier this week for inflating their revenues and then lying to their board about it. The company appears to be toast.

Company: Agillion

Select VC investors: Matrix Partners India , Nexus Venture Partnerss

Agillion, which offered a Web service that helped businesses maintain vital information about their customers, filed for bankruptcy in July 2001 with about $100 in the bank. Just 15 months before, Agillion had $30 million in the bank, according to the suit. Between the product launch date, Feb. 23, 2000, and the bankruptcy filing more than a year later, Agillion had only a “few dozen subscribers” to its Web-based service, the suit claims. “Their revenue was so inconsequential that management never recorded a single dollar in revenue in their internal bookkeeping,” the suit alleges. Despite the poor performance, “Agillion’s management increased their wasteful spending,” the suit states.

via Austin Business Journal

Bling Nation

Company: Bling Nation

Select VC investors: Meck and Camp Ventures, Lightspeed Venture Partners

Executives at several banks said that they liked Bling Nation’s business strategy but its service ultimately suffered from a lack of merchant adoption and consumers’ unwillingness to switch from bank-issued debit cards.

Company: NebuAd

Select VC investors: Menlo Ventures and Sierra Ventures

Total disclosed funding: $31.6M

The company, which has occasionally been described as the ‘US version of Phorm’, has been dying a slow death since US authorities forced the company to abandon its targeting practices with local internet service providers in September. NebuAd was sued in November 2008 by US web users, who alleged the company violated privacy rights by purchasing information about their web activity from ISPs, using the data to serve targeted ads. The company was investigated for its targeting practices, which included the purchase of detailed web history from broadband providers, including search queries and browsing habits. NebuAd argued that it did not know the web users names, phone numbers, home addresses or IP addresses and gave users the option to opt out of the service. After being grilled in US Congress, NebuAd chief executive and founder Bob Dykes quit the company, shedding a number of staff and its PR firm in his wake, including staff from its offices in the UK.

via Marketing Magazine

Company: LV Sensors

Select VC investors: US Venture Partners, Mayfield Fund

…the company closed its doors in the spring after failing to raise a new round of capital… Though many sectors have been under pressure as venture funding is harder to get than it was a year ago, chip companies have been especially hard hit due to their high capital needs and the many years it can take to move beyond the development stage.

Startup Failures: Total funding from $15M — $25M

Seeker biologics.

Company: Seeker Biologics

Select VC investors: 5AM Ventures

Total disclosed funding: $24M

“An early-stage biotech backed by venture capital firm 5AM Ventures appears to have shut down. Multiple employees of Seeker Biologics, a startup behind biologics for autoimmune and inflammatory diseases, posted on social media last week that the company was winding down operations… …‘It can be challenging to witness a talented team dedicated to discovering new medicines fall short of their ambitious goals in a demanding market,’ Seeker’s vice president and head of biology, Jarrat Jordan, wrote in a LinkedIn post. ‘However, science doesn’t always take us in the direction we expect, nor does it adhere to our timeline. Yet, it can lead us to exciting new discoveries, inspiring us to keep pursuing breakthroughs with renewed vigor.’”

Company: Tessera

Select VC investors: Paradigm, Delphi Ventures, FlamingoDAO

Total disclosed funding: $22M

“Tessera, a protocol that enables collective ownership and governance of non-fungible tokens (NFTs), is winding down its operations over the next few weeks, co-founder Andy Chorlian tweeted on Friday. Chorlian, who co-founded the company alongside Nejc Krajnik in 2021, said that the decision was made after ‘carefully analyzing possible market scenarios, our company structure and our financial situation.’ Curated digital fine art marketplace Escher, one of the projects in the Tessera portfolio, will also be shutting down, Chorlian tweeted.  ‘As we really dug into the economic model for Escher, we saw that the targets we needed to hit to attain profitability – compared to the time and resource costs to scale there – just didn’t add up or make good business sense,’ he wrote.”

via CoinDesk

Company: Mandolin

Select VC investors: Salesforce Ventures, Foundry, TIME Ventures

“Mandolin, a live-stream concert platform that thrived after COVID-19 put a pause on in-person experiences, quietly closed its doors on Monday amid the resurgence of live touring and concerts. Mandolin launched on June 1, 2020, months into the pandemic, and less than a year later was named the best streaming platform at the 2021 Pollstar Awards… …Around this same time last year, Mandolin was testing different ways to keep the concert streaming boom going by launching a variety of initiatives aimed at maximizing the in-person concert experience with a wide range of digital services.”

Summation Bio

Company: Summation Bio

Select VC investors: RA Capital Management

“Summation Bio is shutting down after just five years in existence. Endpoints first reported the news. The Somerville biotech had been developing non-viral gene therapies for a variety of diseases… …RA Capital managing partner Peter Kolchinsky confirmed the closure in an email to the Business Journal. ‘We had a hypothesis, one of many, so we formed and capitalized a company to run the experiment, recruited great people, ran the experiment properly, got an answer, and now great people and residual capital will work on other worthy hypotheses and we are enriched by the lessons we learned, which is basically our whole job in a nutshell, except sometimes the experiments are positive and generate a high return,’ Kolchinsky said.”

Company: Pillow

Select VC investors: Elevation Capital, Accel, Quona Capital

Total disclosed funding: $21M

“Singapore-headquartered Pillow plans to discontinue all its services and app in the coming weeks, it warned customers Friday, citing regulatory uncertainty that has claimed countless other crypto startups in recent quarters. Pillow allowed customers to invest in Bitcoin, stablecoins and altcoins, and promised returns of up to 18% — a figure that dropped to 14% as the market started to cool… …The move follows Pillow’s chief rival Flint shutting down its services last month due to what it termed as ‘regulatory hurdles’ and ‘negative market sentiment.’”

Company: Heygo

Select VC investors: Ascension, Point Nine Capital, Lightspeed Venture Partners

“The startup Heygo generated millions of dollars in income for tour guides during a time when their normal business was nonexistent.  The London-based virtual experiences platform was founded in 2020 as a way to help people ‘travel’ when the world was shut down during the pandemic. Customers could attend virtual tours led by local tour guides…  …After nearly three years in operation, Heygo shut down permanently this week. ‘The metrics changed post-Covid. There just wasn’t a big enough market for the amount of money that we raised,’ said John Tertan, who graduated from Oxford University in 2015 and then worked for a law firm for four years before founding Heygo.”

Company: Daylight

Select VC investors: Anthemis, Citibank, Restive Ventures

Total disclosed funding: $20M

“Daylight, an LGBTQ+ banking platform, is shutting down. Its operations will cease on June 30, according to embattled co-founder and CEO Rob Curtis.  The announcement comes months after NY Magazine published an explosive feature on the neobank…NY Mag’s piece detailed a lawsuit brought on by three former employees as well as alleged fabrications and inappropriate behavior on the part of Curtis.”

Company: Cudoni

Select VC investors: Daily Mail and General Trust, Hunt Investment Group, eBay Ventures

Total disclosed funding: $18M

“Back in January, Cudoni, a startup based in London, added eBay to its roster of investors with a $9 million fundraise. Today, the company no longer exists. The company stated that the present economic situation has made it unfeasible to continue its operations. The move is noteworthy as the startup focused in a thriving category in retail — resale.”

Company: Karakuri

Select VC investors: Ocado, Founders Factory, UK Future Fund

“Karakuri, a startup that made a robotic food kiosk that assembles various cold and hot ingredients into prepared meals, is shutting down, according to founder Barney Wragg. In a post on Linkedin, Wragg cited the pandemic and the challenging fundraising environment as the reason for the news and included a link to a Google Sheet with Karakuri employees who Wragg said it was ‘incumbent’ on him to assist in finding new roles.”

Underground Cellar

Company: Underground Cellar

Select VC investors: Forefront Venture Partners, Y Combinator, Golden Ventures

Total disclosed funding: $16M

“Underground Cellar, a San Francisco-based company, could easily be a wine enthusiast’s dream: for free, customers could buy and store up to 500 bottles in the company’s ‘temperature-controlled CloudCellar’ in Napa Valley and ship them (also for free) whenever they wanted…  …In late April, the wine company abruptly halted operations, and, a few days later, filed for Chapter 7 bankruptcy, The San Francisco Chronicle reported. Underground Cellar owes nearly $25 million worth of wine and other debts, and some former customers are now questioning whether the CloudCellar even exists.”

via Entrepreneur

Company: L1ght

Select VC investors: Mangrove Capital Partners, Tribeca Venture Partners

Total disclosed funding: $15M

“Israeli startup L1ght, which developed technology to identify and analyze harmful online content, is shutting down. The company, founded by Ron Porat and Zohar Levkovitz, has notified all 22 of its employees that they are being laid off… …According to the company, it was ultimately forced to shut down after a deal to be acquired fell through.”

Company: Clim8

Select VC investors: Ecosummit, Crowdcube, 7Percent

“Citing ‘dramatic changes’ across the economic environment such as rising inflation, combined with a lack of appetite to invest in start-ups, Clim8 says it has been unable to secure further venture capital to continue operating. ‘Over the last few months we have pursued a number of strategic options and had a range of good interest, however we have not been able to secure a positive outcome from any of these avenues,’ writes Clim8 CEO and founder Duncan Grierson.”

Company: Kite

Select VC investors: Trinity Ventures, SV Angel, Arab Angel Fund

“Kite, a startup developing an AI-powered coding assistant, abruptly shut down last month. Despite securing tens of millions of dollars in VC backing, Kite struggled to pay the bills, founder Adam Smith revealed in a postmortem blog post, running into engineering headwinds that made finding a product-market fit essentially impossible. ‘We failed to deliver our vision of AI-assisted programming because we were 10+ years too early to market, i.e., the tech is not ready yet,’ Smith said. ‘Our product did not monetize, and it took too long to figure that out.’ Kite’s failure doesn’t bode well for the many other companies pursuing — and attempting to commercialize — generative AI for coding.”

Company: Brodmann17

Select VC investors: Sony Innovation Fund, Samsung NEXT, Lool Ventures

“Brodmann17 applied its technology to blind-spot wing cameras, surround and rear cameras, video telematics and even two wheelers, [Brodmann17 CEO Adi Pinhas] said. ‘The demand in the market is far more diversified than people think,’ he said. ‘We decided to take the road not taken by many other companies in the ecosystem. We just needed more time.’ The startup did attract investors during its lifetime…But the company struggled to get new funding. Even though the team was ‘very lean,’ with fewer than 30 people, Pinhas said it was impossible to continue without support from private and corporate venture capital firms. He added that ‘everyone’ is waiting for next year and for something to happen before making more investments.”

Recycling Technologies

Company: Recycling Technologies

Select VC investors: InterChem, Mirova, Neste

“Recycling Technologies, a plastics recycling technology provider based in the United Kingdom, has announced that it has ceased operations… According to a statement from Recycling Technologies, the company has entered into administration since it was unable to secure investments necessary to advance its technology.”

via Recycling Today

WanderJaunt

Company: WanderJaunt

Select VC investors: Founders Fund, Stonebridge Ventures, Global Founders Capital

Total disclosed funding: $19M

“A San Francisco short-term rental tech startup that branded itself as a competitor to Airbnb has abruptly shut down with barely a trace. WanderJaunt, headquartered in SoMa, no longer has an active website or Facebook page, nor does it have any active listings on partner websites… WanderJaunt’s shuttering is just another symptom of the tech industry’s big-time crunch, with investors reticent to put money into fledgling startups, large companies pausing hiring or laying off workers outright and the cryptocurrency industry collapsing.”

BeyondMinds

Company: BeyondMinds

Select VC investors: NVIDIA Inception, Grove Ventures

“Israeli AI startup BeyondMinds notified its 65 employees on Sunday that the company is shutting down and that they will be laid off. The company’s investors urged CEO and co-founder Rotem Alaluf to sell the company following the downturn in the tech market that started last year, with the board of directors not believing that the company would be able to complete another funding round and continue to grow. However, Alaluf didn’t agree with the board and went on to leave his position as CEO and found a new company with other staff from BeyondMinds.”

Lido Learning

Company: Lido Learning 

Select VC investors: Picus Capital, Unilazer Ventures, ZNL Ventures

Total disclosed funding: $24M 

“In a nightmare for more than 150 employees, homegrown edtech startup Lido Leaning which is backed by top entrepreneur Ronnie Screwvala, has apparently shut operations, forcing its workforce to seek help via social media platforms.  Several vendors and employees of Lido Learning took to social media and professional networking platforms, complaining about delayed payments and no salaries for nearly two months.”

via ET Brand Equity

Fridge No More

Company: Fridge No More 

Select VC investors: Insight Partners, AltaIR Capital, AltaClub

Total disclosed funding: $17M 

“After the pandemic made on-demand delivery startups a lifeline for many Americans, the New York City landscape became crowded with startups offering ultra-fast deliveries. Fridge No More launched in October 2020, followed by competitors…Their fight for consumers brought rich discounts and splashy marketing, but the long-term potential of the business model remains unclear. Fridge No More CEO Pavel Danivol told employees in an email Thursday that a deal with a potential buyer fell through two days earlier and that it could not continue operating.”

Zero Grocery

Company: Zero Grocery 

Select VC investors: Sway Ventures, Gingerbread Capital, 1984 Ventures

Total disclosed funding: $16M 

“The Fresno County-based tech startup Zero Grocery announced it’s shutting down in early March, a mere month after raising $12 million in funding. In a post on Twitter founder and CEO Zuleyka Strasner said the company was ‘chronically undercapitalized.’  Now a number of Bay Area food businesses tell the Chronicle the company owes them money. As Kneaded Bakery owner Iliana Berkowitz says the start up owes her East Bay business $6,000, and Starter Bakery’s owner Brian Wood says he’s owed $25,000.”

via Eater San Francisco

Company: Neufund

Select VC investors: Atlantic Labs, Freigeist Capital

“Our hard-working team combined with you, our incredible community, went down the right path. However, the existing environment of the regulatory system seems not to be equipped yet to support innovative fintech companies. We are leaving the market as Neufund. Yet our mission will never die. We believe that digital securities will be the future of finance and the technology we’ve built in the process will one day enable that exciting future. Until that day, however, we’ll keep rooting for innovation to trump conformity. Comfort is the enemy of progress.”

via Neufund

Local Motors 

Company: Local Motors 

Select VC investors: GE Ventures, Airbus Ventures, VTF Capital

“I am disheartened to announce that Local Motors will cease to exist as of January 14,” wrote Chris Stoner, former VP of sales and customer success. “I was only there a few months, but loved every minute of it. I made some great friends, both locally and globally, which makes it worthwhile. The autonomous vehicle space is an exciting emerging market with plenty of opportunity. Experiencing first-hand the skill and dedication of the people I worked with, I have no doubt AVs (like Olli) are the future of transportation.”

Company: Mamsy 

Select VC investors: RTP Global, Baring Vostok Capital Partners

“Online e-commerce platforms, KupiVIP and Mamsy, both managed by parent company, Private Trade, have announced they will close after 13 years in operation. KupiVIP was established in 2008 and focussed on discount sales. The company had over 3,000 suppliers from Russia and abroad. According to Fashion Consulting Group, the platform’s turnover decreased by 10 percent year-on-year in 2020, to 4.5 billion roubles ($61.7 million). Mamsy specialised in mid-price products for children and women. Its revenue last year, according to SPARK-Interfax, amounted to 671.6 million roubles ($9.2 million), representing a year-on-year loss of 167.9 million roubles ($2.3 million).” 

via Business of Fashion

Company:  Automatic

Select VC investors:  Y Combinator, Founders Fund, Andreessen Horowitz

Total disclosed funding:  $24M

“Just like many other companies in the United States, the COVID-19 pandemic has adversely impacted our business,” the company said in a statement. “With fewer consumers purchasing and leasing vehicles and drivers on the road, we unfortunately do not see a path forward for our business. These are unprecedented times, and with so much uncertainty ahead, we have made the difficult decision to discontinue the Automatic connected car product, service and platform.”

via SlashGear

Starsky Robotics

Company: Starsky Robotics

Select VC investors:  Y Combinator, Trucks VC, Shasta Ventures

Total disclosed funding:  $20M

In 2015, I got obsessed with the idea of driverless trucks and started Starsky Robotics. In 2016, we became the first street-legal vehicle to be paid to do real work without a person behind the wheel. In 2018, we became the first street-legal truck to do a fully unmanned run, albeit on a closed road. In 2019, our truck became the first fully-unmanned truck to drive on a live highway. And in 2020, we’re shutting down. […] Timing, more than anything else, is what I think is to blame for our unfortunate fate. Our approach, I still believe, was the right one but the space was too overwhelmed with the unmet promise of AI to focus on a practical solution. As those breakthroughs failed to appear, the downpour of investor interest became a drizzle. It also didn’t help that last year’s tech IPOs took a lot of energy out of the tech industry, and that trucking has been in a recession for 18 or so months.

Select VC investors:  Expansion VC, Mayfield Fund, Veritas Investments

Total disclosed funding:  $16M

As part of its reorganization efforts, Expedia Group is winding down its multifamily building short-term rental business that it began with the 2018 acquisitions of Pillow and ApartmentJet, Skift has learned. Expedia Group bought the two companies for around $54 million, and combined them, along with some staff from its Vrbo subsidiary, to create Expedia Group Multifamily solutions. Expedia rebranded the product into a suite of software tools called Flex, or Flexible Living Platform, and it was geared to help landlords attract short-term rental bookings for vacant apartments, and to enable tenants to offer up their units to guests. […] The Expedia Group spokeswoman said factors that led to the demise of its multifamily business grew out of the Covid-19 crisis, which hurt urban demand and complicated investment in supply.

Phytelligence

Company: Phytelligence

Select VC investors: Cowles Company, Rio Investment Partners, WRF Capital

In its lawsuit, Phytelligence claimed that [Washington State University] wrongly blocked the company from commercializing Cosmic Crisp [apples]. In its own counter-lawsuit, WSU alleged that Phytelligence improperly sold thousands of Cosmic Crisp trees to a grower. A judge dismissed Phytelligence’s case against WSU in July. The role of the dispute in the decision to shut down the company isn’t clear, but the closure is an about-face for a company that just 14 months ago was raising millions and hiring rapidly. In his message to shareholders, Donald wrote that the board “has concluded that it is in the best interests of the company to make a general assignment of its assets for the benefit of creditors and to file a petition to appoint a general receiver to administer and liquidate such assets in accordance with the Washington Receivership Act.”

Company: Homepolish

Select VC investors: Alumni Ventures Group, Elephant Venture Capital

Total disclosed funding: $17M

CEO Noa Santos told designers [the funding is] all gone. “We frankly don’t have the funding left to run the business on an ongoing basis,” Santos said in a video conference call on Wednesday with the company’s remaining employees, according to a recording provided to Intelligencer. … Designers will not be paid any owed earnings and customers will not be receiving refunds.

Company: DAQRI

Select VC investors: Tarsadia Investments

Daqri faced substantial challenges from competing headset makers, including Magic Leap and Microsoft, which were backed by more expansive war chests and institutional partnerships. While the headset company struggled to compete for enterprise customers, Daqri benefited from investor excitement surrounding the broader space. That is, until the investment climate for AR startups cooled. Daqri was, at one point, speaking with a large private-equity firm about financing ahead of a potential IPO, but as the technical realities facing other AR companies came to light, the firm backed out and the deal crumbled, we are told.

Shoes of Prey

Company: Shoes of Prey

Select VC investors: Blackbird Ventures, Blue Sky Alternative Investments

Total disclosed funding: $23.5M

Customised footwear e-tailer Shoes Of Prey has ceased trading. Major investor Blue Sky Alternative Investments said the decision to stop taking new orders was made to protect Shoes Of Prey’s assets and avoid incurring more debt.

Lighthouse AI

Company: Lighthouse AI

Select VC investors: Eclipse Ventures, Felicis Ventures, SignalFire

Lighthouse AI, a smarthome startup, stated on its website:

To our customers, investors, family, friends, partners, fans, and everyone else involved in the Lighthouse journey: It’s been a pleasure, and we can’t thank you enough for your support along the way. I am incredibly proud of the groundbreaking work the Lighthouse team accomplished – delivering useful and accessible intelligence for our homes via advanced AI and 3D sensing. Unfortunately, we did not achieve the commercial success we were looking for and will be shutting down operations in the near future .

via Lighthouse AI

Company : CareSync

Select VC investors : Greycroft Partners;, Merck Global Health Innovation Fund

Total disclosed funding : $22.5M

Health care technology firm CareSync closed its doors on Thursday despite previously announced plans to hire 350 people by the end of 2017 and expand its Tampa headquarters. A manager with the company, who spoke on the condition of anonymity, told the Tampa Bay Business Journal that there had been several rounds of layoffs in recent weeks, but that a plan to sell the company gave remaining employees hope their jobs would remain intact. The employee said a deal fell through and the company had been “bleeding money” the past several weeks. The company’s Twitter and Facebook pages were both taken down Thursday evening.

via Tampa Bay Business Journal

FST Biometrics

Company : FST Biometrics

Select VC investors : GMF Capital, Olive Tree Ventures

Total disclosed funding:  $20M

It came with some of the best credentials a security technology company could have, as well as $23 million in venture capital behind it, but FST Biometrics is closing up shop after 11 years. A source at the company who asked not to be identified said Tuesday that the board voted June 14 to cease operations. “Management is now making an effort to meet its obligations to customers and minimize the harm to its employees,” the source said.

via Haaretz

Company : Lantern

Select VC investors : Stanford University, The University of Pittsburgh Medical Center

Total disclosed funding : $21.5M

It is with a heavy heart that we are forced to admit that Lantern as it exists today will not be able to accomplish its mission to provide affordable and accessible mental health services that empower people to live their healthiest and happiest lives. We’ve spent the past six years working hard to build a product that is engaging for users, reduces symptoms, and has a sustainable business model. After some trial and error in the direct to consumer and employer spaces, we ultimately pursued a strategy of alignment with traditional healthcare insurance companies. Healthcare moves very slowly and we made the mistake of misjudging the time it would take to achieve sustainable revenue through this approach.

via Lantern

StumbleUpon

Company : StumbleUpon

Select VC investors : Accel, eBay

Total disclosed funding : $19.7M

After careful consideration, we’ve made the decision to focus fully on building Mix and transition StumbleUpon accounts into Mix.com over the next couple months. We have built Mix to work on every browser and smartphone, to make the transition as smooth as possible. With a few clicks you can register and import your SU favorites, interests and tags — creating Mix Collections that are easily shared with friends.

Village Voice Media

Company : Village Voice Media

Select VC investors:  Voice Media Group, Weiss Peck & Greer Investments

Total disclosed funding : $17.9M

On the Friday before Labor Day, Village Voice staffers found out the paper was being shut down. According to Gothamist, the paper’s owner, Peter Barbey, told the staff in a phone call that “due to the business realities, we’re going to stop publishing Village Voice new material.” Some staff members are being retained to “wind things down” and migrate the Voice’s archive online. The rest have been let go.

Raze Therapeutics

Company: Raze Therapeutics

Select VC investors: MPM Capital, Atlas Venture, Partners Innovation Fund

Seeded in part by Atlas Venture, the company was focused on cancer anabolic metabolism, specifically mitochondrial one-carbon energetics. The space has emerged recently as a major driver of cancer proliferation, survival, and biomass accumulation. But apparently the tech was too tough to continue. “Although it made intriguing progress, the underlying cancer metabolism biology was too complicated to warrant further investment,” wrote Bruce Booth, partner at Atlas, in a recent portfolio update.

via Endpoints

Company: Chorus

Select VC investors: Emergence Capital Partners, Redpoint Ventures

Through the Beta and subsequent launch, we observed a number of fascinating things about the social motivation and accountability mechanics in Chorus, including the following very important observations: Teams are more likely to stick together and work toward their goals if they also meet in the real world Teams are more likely to stick together and work toward their goals if there is an event-based deadline everybody on the team is working toward (a wedding, a marathon, etc.) Outside of these two cases, we were unable to reduce typical churn. If team members didn’t meet regularly in the real world or weren’t all working toward the same deadline-based event, we essentially observed traditional (high) churn after 4 – 8 weeks.

Company: CastAR

Select VC investors: Playground Ventures

CastAR, the augmented reality start-up co-created by two former Valve employees, laid off its staff, shut down internal studio Eat Sleep Play and closed its doors today, according to now former employees… Jeri Ellsworth and Rick Johnson launched the company in 2013 after leaving Valve with permission to take their AR research with them. The company, which had plans to launch its self-contained AR glasses later this year, was backed by finance group Playground. But, according to former employees, Playground Global declined to invest any more in the company last week. The company also failed to land any Series B funding from other potential investors.

via Polygon

Company: Jinn

Select VC investors: Bull Capital Partners, Samaipata Ventures

Total disclosed funding: $19.3

Jinn was primarily a food delivery app that connected hungry customers with restaurants and self-employed couriers. But unlike rival services such as Deliveroo and UberEATS, Jinn allowed customers to place custom orders for virtually any shop in a city. That meant it was able to offer on-demand McDonald’s deliveries long before the fast food officially announced a partnership with UberEATS. A source with knowledge of Jinn’s current situation said that the company met with three rival food delivery businesses on October 13 [2017] about a potential acquisition deal. But by 5 p.m. on October 16, this source said that a deal looked unlikely, and they said that a decision to close Jinn was made on October 17.

Atlas Informatics

Company: Atlas Informatics

Select VC investors: Aspect Ventures, Microsoft

Total disclosed funding: $20.7M

Atlas Informatics, whose Atlas Recall promised an intuitive and powerful way to index all your information across many services, is shutting down less than a year after launch. There will be no long sunset period: all user data will be deleted next Friday, [October] 27th [2017].

Company: Teforia

Select VC investors: Correlation Ventures, Upfront Ventures

Total disclosed funding: $17.2M

Teforia, the maker of a $1,000 internet-connected tea brewing machine, announced on Friday [October 27, 2017] that it was shutting down effective immediately. The company touted the quality of its award-winning product, but said that “we simply couldn’t raise the funds required” to “educate the market” about it.

Company: HomeHero

Select VC investors: Launch Fund, Tencent Holdings

Total disclosed funding: $22.4M

“Almost exactly one year ago, HomeHero lost its core identity when we were effectively forced to terminate our working relationships with 95% of our 1099 caregivers and required to adopt an inferior employment business model. In the process, HomeHero also lost a majority of its competitive differentiators in price, speed and scalability that allowed us to be so disruptive in 2014 and 2015, and it had nothing to do with competition.” — Kyle Hill, HomeHero CEO

Lily Robotics

Company: Lily Robotics

Select VC investors: Dorm Room Fund, InnoSpring, Liquid 2 Ventures, Seven Seas Partners

In the past year, the Lily family has had many ups and downs. We have been delighted by the steady advancements in the quality of our product and have received great feedback from our Beta program. At the same time, we have been racing against a clock of ever-diminishing funds. Over the past few months, we have tried to secure financing in order to unlock our manufacturing line and ship our first units – but have been unable to do this. As a result, we are deeply saddened to say that we are planning to wind down the company and offer refunds to customers (details below).

via Lily.Camera

Kitchensurfing

Company: Kitchensurfing

Select VC investors: Spark Capital, Tiger Global Management, Union Square Ventures

Total disclosed funding: $19.5M

The startup had originally allowed customers to book chefs days in advance for at-home dinner parties, but last year moved to an on-demand model . Neither version of the service, though, produced enough demand to be sustainable for a venture-backed business. The company was competing in a crowded market, as better-capitalized companies like Blue Apron and Plated pushed the concept of meal-kit delivery while startups like DoorDash, Postmates and Caviar started delivering meals from popular restaurants that didn’t offer delivery on their own.

Maximum Play

Company: Maximum Play

Select VC investors: Technicolor Ventures

For a variety of reasons, more on the side of the money guys and not because of us, the transaction didn’t go through. At the last minute, they pulled out of their commitments and left us in a very difficult place. We had several groups looking to acquire us, and for a variety of reasons those didn’t pan out.

via Pocket Gamer

Take Eat Easy

Company: Take Eat Easy

Select VC investors: DN Capital, Piton Capital, Rocket Internet

Total disclosed funding: $17.7M

The reasons are that 1) our revenues do not cover our costs, and 2) we are not able to close a third fundraiser…. In March 2016, after having been rejected by 114 VC funds, we signed a term sheet with a French, state-owned, logistics group, for a 30M euro investment. Unfortunately, after 3 months of intensive due diligence, their board rejected the deal and they ended up withdrawing their offer. We were negotiating with them under an exclusivity agreement, didn’t have a plan B, and only had a couple of weeks of run-way left..

Company: GigaOm

Select VC investors: True Ventures, Alloy Venture

For its eight years of life Gigaom never turned in an annual profit. Many other VC-funded publishers are in a similar position.

Procket Networks

Company: Procket Networks

Select VC investors: New Enterprise Associates, Institutional Venture Partners

Since introducing its products more than a year ago, Procket has only a handful of customers, mostly including universities and small carriers. Its most prominent customer is NTT in Japan, which also uses Cisco and Juniper gear. It has yet to announce a major deal in the North American market.

Company: Prismatic

Select VC investors: Accel Partners, Breyer Capital, Battery Ventures

Total disclosed funding: $16.2M

“Four years ago, we set out to build a personalized news reader that would change the way people consume content,” the Prismatic team wrote in a blog post . “For many of you, we did just that. But we also learned content distribution is a tough business and we’ve failed to grow at a rate that justifies continuing to support our Prismatic News products.”

Company: Daptiv

Select VC investors: Bay Partners, Kennet Partners

Total disclosed funding: $24.7M

“Everyone thought there was an opportunity to take this company and jump it up, and operate it at a higher level and grow in a different direction,” Franklin said at the time. “We made a good attempt at that and ultimately just weren’t able to raise money around that opportunity.”

via Puget Sound Business Journal

Company: RatePoint

Select VC investors: .406 Ventures, Prism VentureWorks

Total disclosed funding: $24.5M

RatePoint was venture capital funded. According to a press release back in 2009, the company reported at the time that it had “closed a $10 million Series B round of funding led by Castile Ventures of Waltham, Mass., with participation by existing investors .406 Ventures and Prism VentureWorks.” Which goes to show … venture funding is no guarantee of business success.

via Small Business Trends

Company: BuyWithMe

Select VC investors: Bain Capital Ventures, Matrix Partners

Total disclosed funding: $21.5M

“The capital markets willingness to invest in *daily deal* businesses has dried up. Our game plan was to raise a significant amount of capital to push this comprehensive service offering deeply into markets and, as a result, change the basis of competition in the daily deal space. We were a little late.”

Company: BusRadio

Select VC investors: Charles River Ventures, Sigma Partners

Total disclosed funding: $20.1M

The FCC study found that BusRadio, the only commercial broadcaster on school buses, had disguised commercial content as editorial and exposed kids to more commercial content than the four-minutes-per-hour limit it promised parents… “What happened was they were unable to get into schools because of parental protests at the local level. Without a really large audience, they were unable to attract significant advertisers.”

via Media Life Magazine

Company: Monitor110

Select VC investors: Acadia Woods Partners, Draper Fisher Jurvetson

Total disclosed funding: $16M + $3.5M in debt

“We began to raise our next round of funding in May, during one of the most challenging quarters in recent history for VC investments, and despite the progress we have made operationally, we have been unable to secure funding. As a result, the company has decided to cease operations.”

Company: Atrato

Select VC investors: Aweida Venture Partners

A big problem at Atrato has been sales. The boxes simply didn’t sell in large enough numbers… The new executives couldn’t turn the company around on their own, and by June of this year, it was looking for new funding and what was called a rebirth. Up to a quarter of its staff were laid off, and the company’s strategy changed so that Atrato focussed more on software than hardware. It also intended to promote OEM sales more. We understand just 18 employees were left in July 2010.

Company: Moblyng

Select VC investors: Deep Fork Capital, Mohr Davidow Ventures

Total disclosed funding: $17.4M

“We did not monetize enough to stay in business,” said [Stewart] Putney… Putney said the games have gotten traction, but too late. The company launched its HTML5 games on the Facebook HTML5 mobile platform in mid-October, but the audience started growing in December when time and cash had run out.

Company: Alice.com

Select VC investors: Kegonsa Capital Partners

Total disclosed funding: $13.9M + $3.4M in debt

Nacho Somalo, Alice.com’s president for the European Market, said that Alice.es closed due to lack of funding opportunities. Alice.com tried to reorganize its structure, and used the few funding yet available in their Spanish subsidiary to help their growth in the US market. But it seems they have not been able to do so.

via BrainSINS

Company: LucidEra

Select VC investors: Benchmark Capital, Matrix Partners

Total disclosed funding: $15.6M

According to Kaplan, a LucidEra representative he spoke with characterized the roots of the company, founded in 2005, as being firmly in the “SaaS 1.0” era. This group of technology innovators had to “build a lot of their own architecture, delivery capabilities, and software-development resources,” Kaplan explains. Companies starting today can leverage platform-as-a-service capabilities and computing power from vendors such as Salesforce.com and Amazon.com, greatly reducing costly upfront capital investments and ongoing operational expenses. “[LucidEra] got caught with the heavy overhead,” Kaplan says, “and they weren’t going to continue to invest.”

via Destination CRM

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17 Failed Indian Startups & Analyses on Why they Failed

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Countless startups are being launched every day in India.

Many fail because they did not learn from the success of other companies who've managed to rise above.

We just published this list of 17 failed startups from India with analyses on why they shut down, and interviews with their founders.

17 Failed Startups Founded in India

Everything you need to raise funding for your startup, including 3,500+ investors, 7 tools, 18 templates and 3 learning resources.

Information about the industries, countries, and cities they generally invest in.

Information about their valuation, HQ's location, founded year, name of founders, funding amount and number of employees.

List of startup investors in the FinTech industry, along with their Twitter, LinkedIn, and email addresses.

List of startup investors in the BioTech, Health, and Medicine industries, along with their Twitter, LinkedIn, and email addresses.

List of 250 startup investors in the AI and Machine Learning industries, along with their Twitter, LinkedIn, and email addresses.

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Dazo was a food-tech startup based in Bangalore which emerged as a “food on demand” company. Fierce competition and lack of funding led to Dazo's failure.

Details of the startup:

Monica Rastogi, Shashaank Shekhar Singhal

Food & Beverage

Started in:

Nº of employees:

Funding Amount:

Specific cause of failure:

Competition

You can read more about their failure here .

Frankly.me was a Q&A social platform that wasn’t able to raise the necessary round of funding. That is why the CEO of Frankly decided to shut it down.

Abhishek Gupta, Nikunj Jain

Social Media

Lack of PMF

HotelsAroundYou

HotelsAroundYou was an India service centered on last-minute and short stay bookings. They weren't capable of raising more money and had to shut down.

Animesh Chaudhary, Harsha Nallur, Mohsin Dingankar

Koinex was a cryptocurrency exchange platform. India's laws got harsh against cryptocurrencies and the obstacles and little profits led to its shut down.

Aditya Naik, Rahul Raj, Rakesh Yadav

Legal Challenges

Lumos provided the ultimate smart switching tech. After the shutdown, the founders recognized they were not the right team to build a hardware company.

Pritesh Sankhe, Tarkeshwar Singh, Yash Kotak

Software & Hardware

Lack of Experience

PepperTap provided a platform to buy and deliver groceries from local markets. Customers found delivery fees too expensive for their needs, and shut down.

Milind Sharma, Navneet Singh

1,000-5,000

Poor Product

RoomsTonite

RoomsTonite was a last-minute hotel booking app for people traveling to India. They raised $1.5M in funding but the money didn't arrive and they shut down.

Suresh John

Lack of Funds

SchoolGennie

SchoolGennie provided solutions that saved time, reduced costs, and helped make better decisions on schools. But they didn’t test their product-market fit.

Amit Gupta, Pardeep Goyal

Stayzilla, once a thriving homestay network with $33.5M in funding, closed due to unsustainable operational costs and consistent financial losses.

Rupal Yogendra, Sachit Singhi, Sachit Singhi, Yogendra Vasupal

Lack of Focus

Zoomo's goal was to build trust in the Indian used cars market. The buy-and-sell vehicle market was relatively young in India and decided to shut down.

Arnav Kumar, Himangshu Hazarika

Transportation

Bad Business Model

Adleaf Technologies

Back in 2013, Chetan Vashistth founded his first startup business called “Adleaf Technologies”, a blend of programming bootcamps and software solutions. Business was good for a while, but the challenge of multiple bad business decisions paired with failed money management proved to be the business’s demise. In this interview, we will talk about the lessons Chetan learned the hard way.

Chetan Vashistth

Mismanagement of Funds

Autto.in was an on-demand doorstep car service provider, created by Deepak in 2017. Soon after launching, a co-founder joined him and they started marketing the startup, spending a lot of money in customer acquisition. As money burnt, they decided to reach investors, who put them pressure in growing fast. After some months, they decided to shut down.

Deepak Murthy

FreshConnect

Tarun co-founded Freshconnect, an online B2B marketplace for fresh agricultural produce like fruits & vegetables. After making mistakes like lack of focus and bad hiring, they couldn't secure a funding round and eventually got acqui-hired by another company.

Tarun Gupta

Bad Management

InoVVorX was an app development company that both worked for clients and built their own projects. The business did it well for some time, having a team of 25 people, making $300k from their services, and raising $100k. However, their plans on working on their own products (too many of them) meant they started burning all the money and eventually had to shut down.

Maxim Dsouza

$100K-$500K

Jasmeet is an Indian software engineer who a few years ago decided to build new revenue strategies for his business directory and decided to build a job board with a unique offline-online model. But their idea was too ahead to the time and, due to a bad business model, they had to shut down.

Jasmeet Singh

Mishra Motors

Mishra Motors was to be the premier electric sports bike in India. Time and capital were the causes of its collapse.

Naveen Mishra

The Punjab Kitchen

Amit is a hard-core sales professional, who decided to set up a home-made food business with his wife. They started investing $1,200/month to set up the startup and get the first customers. However, once running they had to confront a big problem: the prices of their competitors were much lower. After some pivots, they decided to shut it down.

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Written by Jonathan Chan | December 6, 2020

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Failure hurts.

Watching something you’ve poured endless amounts of time and energy in, only to see it crumble before you will hurt like hell. It’ll be like a physical punch to the gut, and it will paralyze you. It’s no wonder that entrepreneurs avoid failure like the plague.

A startup can go under for a variety of reasons. While founders can stand around and point fingers at each other, attribute it to forces outside of their control, or just blame bad luck. The reality is that startup failure is from a refusal to acknowledge problems until the ship is already sinking.

The reality of the situation is you are more likely to fail than you are to succeed. If you’re defining startup failure as the inability to deliver on the projected return of investment, then 95% of startups are failures.

But there is no greater teacher than failure.

If you’re going to be an entrepreneur then you better get used to failing, it will become an inevitable part of your life. Don’t run from it, embrace it, and see what lessons you can learn from it.

By analyzing the post-mortems of various failed startups here are the expected and not-so-expected reasons why they failed and what you can learn from their mistakes. Watch out for those icebergs.

Be Wary of the Pivot

Fab was once known as ‘ the world’s fastest-growing startup ’ and was valued at over at $1 billion before it ultimately crashed.

Fab underwent a variety of changes from an LGBT social network, to a daily flash sales site, to ‘the world’s design store’, before finally being sold off to PCH, for a reported $15 million in cash and stock .

Fab is both a success story and a cautionary tale to entrepreneurs about the risks of pivoting. A pivot generally means that a business is looking to find a fresh perspective and vision to prevent itself from growing stagnant.

Hypothetically a startup should constantly be evaluating data: measuring the market, contemplating new strategies, testing new products. A pivot allows a business to forge ahead in a new direction when either the opportunity is clear, or the current strategy is failing.

“Once we made the decision to pivot, we committed to doing one thing and doing it well. No distractions.” – Jason Goldberg, cofounder and CEO of Fab.

Fab was originally known as Fabulis an LGBT social networking site before pivoting wonderfully into a daily flash sales site for independent artists. Cofounders Jason Goldberg and Bradford Shellhammer admitted to themselves that Fabulis wasn’t turning out to be the success that they hoped, being stuck at 150,000 users for the last few months. It was time to pivot.

The data they had gathered from Fabulis illuminated a real hole in the design market. People were looking for an easy and accessible way to purchase unique and interesting designerwear.

So, they pivoted and became a daily flash sales site for designer housewares, accessories, clothing, and jewelry. The move paid off with Fab growing to over 10 million users and reportedly generating more than $200,000 every day.

Two years later after the initial pivot, despite a shaky business model, Fab decided to pivot again. This time looking to become a designer alternative to Amazon and IKEA. Coupled with a failed attempt to expand into the European market, Fab began its spectacular fall.

READ MORE: Is Your Business Not Making Enough Money? Here’s How to Fix It

The first and foremost requirement for a pivot to truly succeed is it must solve a major problem. At the time Fab was a hugely successful company, despite the fact that the daily flash sales model wasn’t sustainable in the long-term, choosing to drastically scale down their product offerings moved too far from their identity as a designer store. Fab ultimately created another problem while prematurely trying to solve another.

It’s only natural for a struggling startup to pivot, especially when the alternative is to remain stagnant and unprofitable. However as Fab demonstrated, pivoting for the sake of pivoting, or to expand on a shaky business model will almost always guarantee disaster for any entrepreneur out there. No matter how much money you’ve raised.

READ MORE: How Competitive Collaboration Can Boost Your Business

Too Ambitious, Too Fast

At its peak, in 1999, it was valued at $1.2 billion. Two years later they filed for bankruptcy, laid off 2000 employees, and closed up shop. Webvan could potentially be considered a startup ahead of its time, their vision was a home-delivery service for groceries, where customers could order their groceries online, but that’s not where the problem lies.

15 years later it’s still being studied by business schools around the world as a forewarning against excess and ambition.

Webvan can also be considered a product of its time, the result was that it followed the ‘Get Big Fast’ (GBF) business model that every other startup was religiously following at the time. In 1999 Webvan announced they would expand to 26 major cities.

The following two years became a logistical nightmare with Webvan ultimately losing a total of $830 million before filing for bankruptcy.

“Webvan committed the cardinal sin of retail, which is to expand into new territory before we had demonstrated success in the first market. In fact, we were busy demonstrating failure in the Bay Area market while we expanded into other regions,” said Mike Moritz, former Webvan board member, and partner at Sequoia Capital.

READ MORE: How to Make Money With Your Email List

At some point, every successful startup will have to start scaling up and expanding their business. It seems like common sense, but expansion should only be undertaken when a business model has first proven to be successful.

A few rules of thumb are that a scalable business model should be flexible to be able to adapt to different market conditions, core users and customers are evaluated and understood, and the business model should be able to operate without your direct supervision. Common sense right?

Yet according to the Startup Genome Project’s survey of over 3200 startups , 74% of startup failures can be attributed to premature scaling. Another key finding was that startups, on average, need 2-3 times longer to validate their market than the founders expect. This underestimation of appropriate timelines applies unnecessary pressure on founders to scale prematurely.

Despite early validation, Webvan failed to consistently evaluate the data. If they had paid closer attention then they would’ve seen that their business model was shaky and could not possibly support their desired plans for expansion.

It’s only natural for entrepreneurs to want to grow their business. But as Webvan learned, it’s important to grow your business for the right reasons. To pay attention to the data at hand, and never grow for the sake of growth.

Be Wary of Who You Get in Bed With

Pretty Young Professional was founded by four colleagues at McKinsey, a global consultancy firm, who noticed the lack of resources for young women in the world of entrepreneurship.

It had a simple vision, to provide a weekly newsletter and cultivate a community for young female entrepreneurs. All four were coworkers, friends even, who shared a similar passion and vision. A meeting was held; positions and equity were decided amongst themselves and written on a notepad. And that’s when the trouble began.

READ MORE: How to Build a Profitable Marketing Strategy

Kathryn Minshew, co-founder, and CEO of Pretty Young Professional said that “it came down to some pretty fundamental differences of opinion around where the business should be heading. I think, naively, we assumed that if we kicked the can down the road on some of those things, we’d be able to sort them out.”

Despite the years you’ve shared together and the many years of in-jokes you have, conventional wisdom dictates that it’s a bad idea to mix business with friends.

A study by the University of Auckland Business School found that while maintaining strong friendships with co-workers generally improves work productivity and morale it also creates a dilemma when trying to reconcile personal relationships with professional decision-making.

In business, it’s required that you have to make the logical and necessary decisions in order to benefit your company, even at the cost of personal friendships.

11 months in, the four founders of Pretty Young Professional had split into two camps due to differences in opinion, and a coup was staged. The legality of the original document was called into question, Minshew was hit with a lawsuit and called to step down as CEO, and the editorial team of Pretty Young Professional had their site and email access cut. The company quickly collapsed despite calls from excited investors and a thriving user base.

While it is possible to work with friends and family, it requires completely honest communication, both parties must understand that it really is nothing personal, and, perhaps most importantly, vest your ownership. It’s always best practice to ensure that you legally protect yourself and your assets, a promise between friends rarely holds up in the court of law.

READ MORE: 5 Best Sales Funnel Software Tools to Power Your Business

The Double-Edged Sword of SEO

The premise was simple, to help parents find tutors for their kids online. By 2013 they had over 7000 tutors signed up on their platform and has raised an estimated $1.8 million. Then the rug was swept out from under then and they closed down a few months later, after 3 years in operation.

It appeared that Tutorspree was doing everything right, it had managed to raise an impressive amount of capital from heavyweight investors like Sequoia Capital and Lerer Ventures. They were scaling at a decent pace, albeit not as fast as they wanted, and the business model was proving to be profitable.

However, it fell apart in March of 2013 when Google changed its algorithm and Tutorspree found their traffic reduced by 80% overnight . While this normally wouldn’t cripple a business, it was a catastrophe for Tutorspree. SEO was baked into their business model from the very start and almost all of their customer acquisitions originated from SEO.

“Nor is the largest lesson for me that SEO shouldn’t be part of a startup’s marketing kit. It should be there, but it has to be just one of many tools. SEO cannot be the only channel a company has, nor can any other single-channel serve that purpose.” – Aaron Harris, co-founder, and CEO of Tutorspree.

READ MORE: How to Develop Powerful Business Core Values and Mission Statements

There are many different types of SEO practices, but SEO is essentially improving the visibility and authority of a website by having it rank higher on search engine listings. The entrepreneurial community itself is very divided on the merits of SEO.

The issue with Tutorspree wasn’t whether or not it used SEO effectively or ineffectively. The issue was that due to its effectiveness, the founders became blind to other models of customer acquisition and developed an overreliance on a model they had absolutely no control over.

Google’s algorithm constantly changes and there’s no telling how it will ultimately affect your website’s ranking. Google has consistently proven to burn anyone that chooses to rely on SEO as their main strategy.

It should go without saying that you shouldn’t be putting all your eggs into one basket. Entrepreneurs should invest half their marketing into a high-risk strategy, and the other half in a proven consistent strategy, albeit with a lower return on investment. When it comes to business, you can either live or die by the sword or just be smart and carry a shield.

READ MORE: Building the Perfect Sales Funnel for Your Shopify Store

Failure is difficult to handle, but there is no better teacher. Although every business listed failed spectacularly, all of their founders got back up, dusted themselves off, and forged ahead to eventual success.

While it’s easy to see all the mistakes you made in hindsight, don’t let yourself get to that point. Failure can be seen a mile away if you’re paying close enough attention, even if it means asking yourself some uncomfortable questions. A lot of businesses could have been saved if just the smallest amount of preparation was undertaken, or if founders had just a little bit more patience.

Is there a bigger startup failure that you’ve heard about? We love case studies! Let us know in the comments below.

About Jonathan Chan

Jonathan "JC" Chan is the first Content Crafter at Foundr Magazine. When not writing about anything and everything to do with startups, entrepreneurship, and marketing, JC can be found pretending to be the next MMA star at the gym. He has also contributed to outlets such as  Huffington Post ,  Social Media Examiner ,  MarketingProfs ,  Hubspot  and more. Make sure you  connect with him on LinkedIn !

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[Case Study]: Big Brand Failures; Lessons to Learn From

Table of Contents

A good marketing strategy is the most effective way to increase the brand awareness . But, when the marketing strategies go wrong and turn into a marketing failure then it can be the major reason behind the fall of your brand.

Maintaining the brand value and strategy is a challenging journey, even when you reach great heights. Always take the right decision as single marketing blunder can destroy your brand completely.

In this age of rapidly changing technology either you have to adapt the change with time or you fail. Those who refuse to improve become redundant and irrelevant to the industry one day.

This case study talks about how fairly large marketing mistakes of big brands leaded to their devastation. If we come to seek examples there are many, yet here we have picked up 3 known names, Kingfisher, Kodak and Nokia, whose stories are mere enough to let you know the failure reasons.

1) The Rise, Dominance and Fall of Kingfisher

About kingfisher.

In 2003, Kingfisher Airlines Limited was founded by Vijay Malllya as a premium and world-class airline group. The airline was based in Bangalore India and had more than 400 flights per day (Domestic & International). It used to be the most admired name in Asia-Pacific region.

The Rise of Kingfisher Airlines

On its peak time, it was the 2 nd largest airline, in terms of carrying the number of passengers. The quality and comfortable service attracted many passengers in the initial years. And, then the Kingfisher acquired Air Deccan in 2007.

In just 3 years after touching the skies, the first international Bengaluru-London flight in 2008 was launched.

Marketing Strategy

They promoted the brand through all media channels like Radio, Television, Print, Multiplexes, Malls and in their In-flight magazines too.

• In just 2 years, the airlines achieved the aviation market share of 10%.
• During 2007, they had the most aggressive expansion plans of all Indian carriers.
• In June 2007, their influence in the market was increased with the acquisition of 26% shareholding of Air Deccan Airlines.
• During February 2009, more than 900,000 passengers flew with Kingfisher giving it the highest marketing share in India.

How Brand turned into Non-Performing Asset?

• By the end of the March 2008, company was under the debt of INR 934 cr and net losses continued to widen in the following financial year.
• Acquisition of Air Deccan marked the end of Kingfisher Airlines. By the year 2009-10, airlines accumulated the debt of over INR 7,000 cr as the losses continued to pile up. 2010 was the year when it turned into a non-performing asset for banks.
• In 2012, the airlines operations were shut down as the DGCA suspended its flying license.

What Went Wrong?

• Lack of Delegation.
• Low-cost airline aviation airline, Air Deccan was treated as a step-child.
• Unnecessary Burning of Fuel.

The major reason that the brand was grounded was that it wasn’t just into one business and trying hands on more than one business. The founder was taking care of different businesses personally without appointing proper CEOs and couldn’t succeed in doing so. And, it’s pretty obvious that if two brands serve almost the same service, then people would rather prefer the cheaper one.

2) How Kodak couldn’t evolve with time and failed?

About kodak.

The American technology company, Kodak, was built on the culture of innovation and change in 1888. The company was invented and marketed by George Eastmen who was a former bank clerk from New York. At that time, it used to be a simple box camera, loaded with 100-exposure roll of film.

Kodak held a dominant position in photographic film in its time. Its tagline “ Kodak Moments ” was so famous that it was used for promoting events.

Marketing Strategy of Kodak

The real genius of founder Eastman lied in his marketing strategy. He launched an advertising campaign which featured children and women operating the camera with a slogan, “ You press the button, we do the rest .”

• In 1935, produced the first mass-market color film in 16 and 8mm.
• Kodak owned the film market with 90% market share in 1970s.
• Created the first digital camera in 1975.

How Kodak Failed?

The first digital camera was designed by a Kodak engineer, Steve Sasson in 1975. It was a filmless photography at that time so they didn’t want to threaten their film business so didn’t do the marketing of the Digital camera. Whereas, other digital companies like Sony, Nikon, Fujifilm took the full advantage of the situation.

Kodak missed the opportunities in the technology, they themselves invented.

• Kodak couldn’t get on the nerve of the modern technology and remained in denial for long about digital photography while all the other brands adapted the change by introducing electronic cameras.
• Even before the digital photography they were failing to keep up as its rivalry Fujifilm started doing a better job than them.
• In January 2012, the big name went bankrupt because of not making the smart move into the digital world fast enough.
• On February 9, 2012, Kodak announced that it will exit the digital image capture business.

The Kodak failed due its slowness in transition. The world moved ahead with digital cameras, SD cards and USB cables but the company remained stuck with films. They didn’t know how to respond in time and technology eventually killed the Kodak films.

3) How Nokia got acquired by Microsoft?

About nokia.

Nokia Corporation was founded in 1865 in Finland. The company was formally known as Nordic Mobile Telephone (NMT). The company name was changed to Nokia in 1871. They built the first international mobile phone in 1981 and this marked the beginning of the mobile era.

The Rise of Nokia, Connecting People

• Nokia phone was used in 1991 for making the first GSM call.
• In 1992, they launched Nokia 1101, the first GSM handset which became an instant hit.
• In 1988, Nokia became the world leader in mobile phones.
• Nokia’s Marketing share grew to 74% in March 2006 from 61.5%in October 2005.
• In the color phone category, market share jumped to 59.3% from 40.9%.

The Fall of Nokia

Nokia used to own a large portion of market of smartphone before the iPhone came out in market in 2007. Their refusal to change and learn new things lost their survival and this ultimately leaded to their demise.

It used to be the leader in its market whereas Samsung was nowhere to be seen. But, Samsung made the move at the right time and gained the success.

The pioneer brand failed to respond to the completely changed smartphones with full touchscreen and application based operating system. The years passed and they didn’t keep up with the expectation of people and the consumers shifted.

They remained their focus on the Symbian series. Until 2011, company didn’t make the leap of faith onto the Windows phone and due to their slow response they suffered such demise.

• Nokia got acquired by Microsoft in 2013.

And as we conclude, we look forward to the statement made by Stephen Elop, Nokia’s CEO in his speech when Nokia got acquired by Microsoft that “ we didn’t do anything wrong, but somehow, we lost ”. And, as far as the parameters on which success is measured, he was right somewhere that they didn’t do anything wrong, it’s just that they were unable to adapt the change at the right time and so, lost.

The unwillingness to embrace the needed marketing change when required was probably the main cause that turned these brands down. One needs to think and act holistically for growing the brand with time otherwise, if you don’t change, you will definitely get removed from the competition.

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Change Management Case Study Examples: Lessons from Industry Giants

Explore some transformative journeys with efficient Change Management Case Study examples. Delve into case studies from Coca-Cola, Heinz, Intuit, and many more. Dive in to unearth the strategic wisdom and pivotal lessons gleaned from the experiences of these titans in the industry. Read to learn about and grasp the Change Management art!

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• Certified Professional Change Management CPCM
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• Managing Organisational Change Effectively

In the fast-paced world of business, staying ahead means being able to adapt. Have you ever wondered how some brands manage to thrive despite huge challenges? This blog dives into a collection of Change Management Case Studies, sharing wisdom from top companies that have faced and conquered adversity. These aren’t just stories; they’re success strategies.  

Each Change Management Case Study reveals the smart choices and creative fixes that helped companies navigate rough waters. How did they turn crises into chances to grow? What can we take away from their successes and mistakes? Keep reading to discover these inspiring stories and learn how they can reshape your approach to change in your own business. 

Table of Contents  

1) What is Change Management in Business? 

2) Top Examples of Case Studies on Change Management 

    a) Coca-Cola 

    b) Adobe 

    c) Heinz  

    d) Intuit  

    e) Kodak 

    f) Barclays Bank 

3) Conclusion

What is Change Management in Business?  

Change management in business refers to the structured process of planning, implementing, and managing changes within an organisation. It involves anticipating, navigating, and adapting to shifts in strategy, technology, processes, or culture to achieve desired outcomes and sustain competitiveness.  

Effective Change Management entails identifying the need for change, engaging stakeholders, communicating effectively, and mitigating resistance to ensure smooth transitions. By embracing Change Management principles, businesses can enhance agility, resilience, and innovation, driving growth and success in dynamic environments. 

Top Examples of Case Studies on Change Management  

Let's explore some transformative journeys of industry leaders through compelling case studies on Change Management: 

1) Coca-Cola  

Coca-Cola, the beverage titan, acknowledged the necessity to evolve with consumer tastes, market shifts, and regulatory changes. The rise of health-conscious consumers prompted Coca-Cola to revamp its offerings and business approach. The company’s proactive Change Management centred on innovation and diversification, leading to the launch of healthier options like Coca-Cola Zero Sugar.  

Strategic alliances and acquisitions broadened Coca-Cola’s market reach and variety. Notably, Coca-Cola introduced eco-friendly packaging like the PlantBottle and championed sustainability in its marketing, bolstering its brand image. 

Acquire the expertise to facilitate smooth changes and propel your success forward – join our Change Management Practitioner Course now!  

2) Adobe  

Adobe, with its global workforce and significant revenue, faced a shift due to technological advancements and competitive pressures. In 2011, Adobe transitioned from physical software sales to cloud-based services, offering free downloads or subscriptions.  

This shift necessitated a transformation in Adobe’s HR practices, moving from traditional roles to a more human-centric approach, aligning with the company’s innovative and millennial-driven culture. 

3) Heinz  

Berkshire Hathaway and 3G Capital’s acquisition of Heinz led to immediate, sweeping changes. The new management implemented cost-cutting measures and altered executive perks.  

Additionally, it introduced a more insular leadership style, contrasting with 3G’s young, mobile, and bonus-driven executive team. 

Commence on a journey of transformative leadership and achieve measurable outcomes by joining our Change Management Foundation Course today!  

4) Intuit  

Steve Bennett’s leadership at Intuit marked a significant shift. Adopting the McKinsey 7S Model, he restructured the organisation to enhance decision-making, align rewards with strategy, and foster a performance-driven culture. His changes resulted in a notable increase in operating profits. 

5) Kodak  

Kodak, the pioneer of the first digital and megapixel cameras in 1975 and 1986, faced bankruptcy in 2012. Initially, digital technology was costly and had subpar image quality, leading Kodak to predict a decade before it threatened their traditional business. Despite this accurate forecast, Kodak focused on enhancing film quality rather than digital innovation.  

Dominating the market in 1976 and peaking with £12,52,16 billion in sales in 1999, Kodak’s reluctance to adopt new technology led to a decline, with revenues falling to £4,85,11,90 billion in 2011.  

In contrast, Fuji, Kodak’s competitor, embraced digital transformation and diversified into new ventures. 

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6) Barclays Bank  

The financial sector, particularly hit by the 2008 mortgage crisis, saw Barclays Capital aiming for global leadership under Bob Diamond. However, the London Inter-bank Offered Rate (LIBOR) scandal led to fines and resignations, prompting a strategic overhaul by new CEO Antony Jenkins in 2012.  

Changes included rebranding, refocusing on core markets, altering the business model away from high-risk lending, fostering a customer-centric culture, downsizing, and embracing technology for efficiency. These reforms aimed to strengthen Barclays, improve shareholder returns, and restore trust. 

Conclusion  

The discussed Change Management Case Study examples serve as a testament to the transformative power of adept Change Management. Let these insights from industry leaders motivate and direct you as you navigate your organisation towards a path of continuous innovation and enduring prosperity. 

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Frequently Asked Questions

The five key elements of Change Management typically include communication, leadership, stakeholder engagement, training and development, and measurement and evaluation. These elements form the foundation for successfully navigating organisational change and ensuring its effectiveness. 

The seven steps of Change Management involve identifying the need for change, developing a Change Management plan, communicating the change vision, empowering employees, implementing change initiatives, celebrating milestones, and sustaining change through ongoing evaluation and adaptation. 

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Billionaire No More: Patagonia Founder Gives Away the Company

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By David Gelles

Gelles writes about the intersection of climate and the corporate world and has covered Patagonia for nearly a decade.

• Published Sept. 14, 2022 Updated Sept. 21, 2022

A half century after founding the outdoor apparel maker Patagonia, Yvon Chouinard, the eccentric rock climber who became a reluctant billionaire with his unconventional spin on capitalism, has given the company away.

Rather than selling the company or taking it public, Mr. Chouinard, his wife and two adult children have transferred their ownership of Patagonia, valued at about $3 billion, to a specially designed trust and a nonprofit organization. They were created to preserve the company’s independence and ensure that all of its profits — some $100 million a year — are used to combat climate change and protect undeveloped land around the globe.

The unusual move comes at a moment of growing scrutiny for billionaires and corporations, whose rhetoric about making the world a better place is often overshadowed by their contributions to the very problems they claim to want to solve.

At the same time, Mr. Chouinard’s relinquishment of the family fortune is in keeping with his longstanding disregard for business norms, and his lifelong love for the environment.

“Hopefully this will influence a new form of capitalism that doesn’t end up with a few rich people and a bunch of poor people,” Mr. Chouinard, 83, said in an exclusive interview. “We are going to give away the maximum amount of money to people who are actively working on saving this planet.”

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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

This is the latest in an FT series of mini case studies on business dilemmas, for exploration in the classroom and beyond. Read the argument and then consider the questions raised in the box below

Across the western world, big pay rises for chief executives have triggered shareholder dissent.

In May, aerospace group Boeing’s outgoing chief executive David Calhoun was awarded a pay rise of 45 per cent to $32.8mn despite shareholder opposition, following a series of recent incidents and accidents .

In March, the board of pharma giant AstraZeneca proposed to pay chief executive Pascal Soriot £18.7mn. Two proxy advisers called the package “ excessive ”, but one major shareholder argued Soriot was “ massively underpaid ” and the package was approved. Also in March, a proposed increase to the fixed salary part of Banco Santander executive chair Ana Bótin’s package drew fire from adviser ISS.

These debates about executive pay, on both sides of the Atlantic, raise questions about the checks and balances on remuneration.

ISS research found that chief executive officers’ pay went up by 9 per cent in the US in the first part of 2024, even when company performance went down. And, in response to a widening pay gap between US CEOs and their European counterparts, many FTSE 100 companies have also proposed significant pay rises this year.

To retain senior executives, the chair of UK-based medical devices maker Smith & Nephew argued it was necessary to raise pay for US executives working at “Brilo” companies: “ British in listing only ”. The head of the London Stock Exchange Group even called on investors to support higher executive pay , to prevent UK-based companies that generate only a “ fraction of their revenue in the UK ” relocating to the US.

Research on the effects of CEO pay on performance is extensive but many questions remain. Some work suggests that long-term stock options most effectively align incentives between shareholders and executives, and that large differences between senior and junior employees may be associated with higher long-term profitability. Other studies warn that high pay and large differentials may undermine the extrinsic motivation of top executives and hurt employee morale.

Executive pay is subject to a company’s governance. In line with the OECD’s principles of corporate governance , the board of directors establishes a remuneration committee, which proposes the components and level of the CEO’s and executive team’s remuneration. Ultimately, shareholders vote on this proposal at the company’s annual general meeting.

Occasionally, a board of directors is criticised for not having done its work properly. In January, the Delaware Court of Chancery turned down a $55.8bn pay deal proposed by the Tesla board for Elon Musk. The judge said the board behaved “like supine servants of an overweening master” and the chair’s objectivity had been compromised by “ life-changing ” sums of money she received when selling Tesla shares worth $280mn in 2021 and 2022. Musk replied that Tesla should move its headquarters from Delaware to Texas.

In theory, when the board fails, shareholder democracy should kick in. But it is rare for an AGM to vote down a remuneration package. One exception was in May 2023, when Unilever shareholders rejected a base salary increase for Hein Schumacher, the incoming CEO.

Sometimes, a large minority will vote against a pay proposal, as happened with the €36.5mn package put forward for carmaker Stellantis’ CEO, Carlos Tavares , in April. However, while such signs of dissent may be embarrassing, they rarely change the outcome.

There are concerns, therefore, that shareholder democracy is not functioning properly.

One explanation for this is that an increasing percentage of shares is owned by passive investors such as BlackRock, Vanguard and State Street. They act on behalf of other financial actors, such as pension funds, but rarely voice opinions on CEO pay. In 2020, BlackRock, the world’s largest passive investor, announced that, by the year-end, “all active portfolios and advisory strategies will be fully ESG integrated” — raising hopes among activists that executive pay would be linked to environment, social and governance standards. But the recent anti-ESG backlash has left some boards uncertain if, and how, to link remuneration to sustainability goals .

A second explanation, as at AstraZeneca and Banco Santander, is that proxy advisers play a growing role. Many institutional investors delegate their voting rights to these specialists. The two largest of them — ISS and Glass Lewis — control most of the proxy advisory market and state opinions on a growing variety of issues . As a result, board members increasingly complain about the influence on pay that these advisers have.

To many critics, then, shareholder democracy is failing in arbitrating on fair executive pay.

Questions for discussion

In your view, has CEO pay become excessive?

Should European CEO pay follow the levels set by US companies?

How credible is the risk that European companies will move their head office to another state or country? How damaging would this be to the original state or country?

How do you evaluate the growing role of passive investors in a corporate governance context?

Have proxy advisers become too powerful?

Should executive pay be based more on ESG criteria?

In your opinion, is shareholder democracy failing us when it comes to executive pay? Why (not)? If so, what should be done to improve it?

Should executive pay be capped? What would be the benefits? What would be the cost?

Read more FT ‘instant caselets’ at ft.com/business-school

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Politics | Boeing CEO under withering attack in Congress…

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Politics | Boeing CEO under withering attack in Congress over safety failures

With relatives of recent 737 Max plane crash victims sitting in the audience, David Calhoun said the troubled company was determined to do a better job of building safer planes.

“Our culture is far from perfect, but we are taking action and making progress,” Calhoun said in opening remarks. “We are taking comprehensive action today to strengthen safety and quality.”

Calhoun parried pointed questions from Democrats and Republicans alike on the Senate investigations subcommittee, which is chaired by Boeing critic Sen. Richard Blumenthal (D-Connecticut).

At the start of the hearing, Calhoun stood up and apologized to the crash victims’ families, some of whom held photos of their lost loved ones who perished in 737 Max crashes in Ethiopia and Indonesia.

That wasn’t enough for lawmakers like Sen. Josh Hawley (R-Missouri), who accused Calhoun of cutting corners to boost profits.

“I think it’s a travesty that you have not resigned,” Hawley said.

Hours before Calhoun was set to appear, the Senate panel released an explosive 204-page report filled with new allegations from a whistleblower who said he fears that defective parts are going into Boeing 737 Max jets.

Sam Mohawk, a Boeing investigator at a 737 assembly plant near Seattle, claims the plane-maker hid evidence of faulty parts after the Federal Aviation Administration informed the company a year ago that it would inspect the plant.

“It ordered (parts) moved to another location to intentionally hide (them) from the FAA,” Mohawk said, according to the report.

The parts were later moved back or not kept track of, Mohawk said. They included rudders, wing flaps and tail fins — all crucial in controlling a plane.

The hearing marked the first chance for Congress to grill Calhoun since a door panel blew out of a 737 Max during an Alaska Airlines flight in January.

No one was seriously injured in the incident, but it raised fresh concerns about the company’s best-selling commercial aircraft, especially because it appears bolts that keep the panel in place were missing.

Calhoun’s appearance also was scheduled to take place as the Justice Department considers whether to prosecute Boeing for violating terms of a settlement following the fatal crashes.

The company says it has gotten the message.

Boeing says it has slowed production, encouraged employees to report safety concerns, stopped assembly lines for a day to let workers talk about safety, and it appointed a retired Navy admiral to lead a quality review.

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Case Study: Are the Right People in the Right Seats?

• Nitin Nohria

A new CEO considers changes to her top team.

The newly appointed CEO of Highstreet Properties has doubts about several members of the top team she has inherited. She’s trying to drive a turnaround, the company has a complicated matrix structure, and some team members seem opposed to her strategy. She’s debating replacing several of them, but she’s worried about making too many changes too quickly, upsetting her board, and bringing in too many former colleagues.

Shannon Levy, the new CEO of Highstreet Properties, stared out the window of the company’s London headquarters, wondering whether she should call Justin Mooney and fire him. A once-thriving developer of retail malls, Highstreet had been battered by consumers’ shift to e-commerce, Covid-19 mall closures, and internal discord over strategy. Shannon had been brought in to turn the business around. She was fast approaching her 100-day mark and already feeling behind on selecting, aligning, and motivating her senior leadership team.

• Nitin Nohria is the George F. Baker Jr. and Distinguished Service University Professor. He served as the 10th dean of Harvard Business School, from 2010 to 2020.

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