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It's hard to say goodbye. A compilation of startup failure post-mortems by founders and investors. So why do so many startups flame out? The real reasons can be hard to uncover, but the obituaries written by founders, investors, and journalists offer plenty of clues. Below is a time-staggered compilation of startup post-mortems for some of the most notable failures in the CB Insights database.
After reading the goodbye letters and investigative takedowns below, check out our rundown for the top 12 reasons that startups shutter. However, this activity was just one side of the private equity coin. Many startups, rather than seeing an influx of fresh capital, shut down altogether due to a of factors, such as increased competition KupiVIP , a lack of market traction Abundant Robotics , and flawed business models Yelo. While these challenges may have been manageable on their own, in many cases, they proved to be fatal when compounded with pandemic-induced pressures.
Read on for the post-mortems of 8 startups that shut down since June Title: Alibaba-backed fashion rental app YCloset shuts down after five years. Product: YCloset. In doing so, the company announced plans to end support for its sales and online channels by August Like its US-based counterparts, Rent the Runway and Stitch Fix, YCloset operated using a subscription model and allowed its users to rent branded apparel.
Technode brought broader issues in the market to light:. As YCloset scaled, it struggled to keep up with high expenses in shipping, dry cleaning, and staying abreast of the latest fashion trends. All this required ificant capital, given the size of the Russian market…. While the international context was less favorable, not all local players were able or willing to invest in the company. Title: US: fruit harvesting robot company shuts down.
Product: Abundant Robotics. Robotic apple harvester developer Abundant Robotics announced that it would be closing its doors at the beginning of July. Prior to the announcement, the company put all of its intellectual property and assets up for sale, which included a of patents integral to the development of its computer vision-enabled robot for fruit picking. Title: Exclusive: Matrix-backed neo-banking app Yelo shuts down.
Product: Yelo. July saw the closure of Yelo — a challenger bank mainly geared toward gig workers. After raising a seed round in and subsequently amassing 4M app downlo, the company faced complications with its business model that were further compounded by the onset of the pandemic. While no official statement was made by the company, in July, an anonymous source close to the company stated ,.
Title: Distant Kingdoms dev Orthrus Studios shuts down after entire team is laid off. Product: Orthrus Studios. Smith, were all let go. I am incredibly grateful to the people who helped make this 4. Product: Houseparty. At the start of September, Epic Games announced that it would be discontinuing Houseparty come October. 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. Title: Closing Clickety. Product: Clickety. At the end of August, project management tool Clickety announced it would be closing down.
Title: Unacademy shuts Mastree after a year of acquisition. Product: Mastree. In an internal note, Unacademy co-founder and chief executive Gaurav Munjal commented ,. Kudos to Shrey and Royal for iterating at breakneck speed and trying out many things before all of us decided to shut things down. But not all companies rode this funding wave to success. Along with Covid, other challenges — like overcrowded markets SuperData Research , mismanagement Katerra , and difficulties scaling operations Hey Tiger — have led to some companies shuttering for good.
Read on for the post-mortems of 10 startups that shut down since February Title: Katerra Commences U. Product: Katerra. Modular construction startup Katerra filed for Chapter 11 bankruptcy in early June Although the company cited mismanagement as the driver of its downfall, the collapse of lender Greensill Capital , just 3 months earlier, also played a role. We are grateful to the extraordinary ongoing work and support of the Katerra team and other core constituencies through this extremely difficult time. Title: Digital comics startup Madefire is shutting down. Product: Madefire. Madefire , a digital comics startup, entered into an asment of benefit for creditors ABC , an alternative to formal bankruptcy, at the beginning of April This was a sudden announcement for many Madefire users, who were given until the end of the month to download their purchases.
The Madefire app powered a of digital comics apps — such as Archie Unlimited and IDW — which were also shut down. Despite having a wide range of artists , including Dave Gibbons, and investors, like Drake , the company faded out in the face of competition. The Beat reports ,. In the end, readers have spoken with their wallets and eyeballs: people prefer free comics, print comics and Amazon comiXology. Title: Aerion Supersonic shuts down, ending plans to build silent high speed business jets. Product: Aerion Corporation. Aerion Corporation , an aeronautical engineering startup, announced its sudden closure at the end of May The company had drawn attention for developing a patented technology that would allow its AS2 supersonic jets to fly without creating a sonic boom.
While the company had fostered partnerships with Boeing, General Electric, and NetJets, and reported plans to fly its first jet by and begin commercial services by , it ultimately succumbed to challenges associated with securing necessary capital. According to a company statement ,. However, in the current financial environment, it has proven hugely challenging to close on the scheduled and necessary large new capital requirements to finalize the transition of the AS2 into production.
Given these conditions, the Aerion Corporation is now taking the appropriate steps in consideration of this ongoing financial environment. Title: Farewell, Periscope. Product: Periscope. Periscope , the livestreaming app that popularized mobile livestreaming, shut down at the end of March — 6 years after its initial launch. The need for Periscope as a standalone service started to wane in when Twitter announced the launch of its homegrown streaming capabilities.
Twitter stated ,. Product: SuperData Research. Market intelligence provider SuperData Research was shuttered in March by Nielsen Sports, which acquired the research firm in to help it enhance its own product offerings. While Nielsen did not specify a reason for shutting down the division, it did state that it would move away from offering gaming services as its own entity and instead add it as an additional feature to its core Nielsen Sports products. Sports Business Journal reported that market competition and Covidrelated complications could have factored into the decision,.
Title: Hubba To Shut Down. Product: Hubba. Canada-based e-commerce startup Hubba shut down in February According to Betakit,. Product: Hey Tiger. Ethical chocolate brand Hey Tiger announced its closure at the beginning of May , 3 years after opening. Not only did it commit to ethically sourcing ingredients, but it also made charitable donations to combat child labor and poverty in cocoa farming communities. Although the company gained a loyal following, it struggled to scale its operations and remain profitable in a manner that aligned with its social goals.
Although we deed a business that customers absolutely love, it proved hard to scale into the profitability it needed to be a sustainable social enterprise. As the scale of our chocolate production grew, so did the tensions between the very things that made Hey Tiger special. Title: FTC shuts down savings app Beam under tentative settlement. Product: Beam. Mobile savings app Beam was shut down under a settlement with the Federal Trade Commission.
However, a CNBC investigation revealed that dozens of customers were not able to get their money out of their s, which ultimately led the FTC to shut it down and bar it from operating a similar business in the future. Title: Early blockchain music startup Jaak has shut down.
Product: JAAK. UK-based blockchain music startup JAAK announced that it would be taking most of its properties offline starting at the end of March Title: Disintegration developer V1 Interactive shuts down. Product: V1 Interactive. Video game developer V1 Interactive announced its closure in March , just 9 months after releasing its debut game called Disintegration.
In its final Twitter announcement , it simply stated,. We want to thank all the talented people at V1, both past and present, who helped make the last 5 years wonderful. And a heartfelt thanks to the amazing community that supported us. Several of the companies in this update stated they shut down because they were unable to raise funding GoBear or find a viable revenue model Loon.
Some were hit especially hard by pandemic shutdowns and changing consumer behaviors Brideside. Others, meanwhile, allegedly mismanaged their spending AWOK or faced problems unrelated to the pandemic TenX that led to their failure. Mobile-focused streaming service Quibi shut down in October just 6 months after launching.
As reported in the Wall Street Journal, founder Jeffrey Katzenberg and chief executive Meg Whitman said in a letter to employees at the time of the shutdown:. Title: Hammered by pandemic, consumer lender Aura shuts down. 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.
Title: Alphabet punctures Loon internet balloon project. According to the Financial Times,. Title: Australian neobank Xinja throws in the towel. Australia-based digital bank Xinja announced in December it would exit banking, returning its banking and refunding customer deposits. The startup had reportedly spent heavily on its high-interest bank s and was unable to close a funding round before announcing its decision to shut down its banking products on its website, noting:.Bored any Brazil chat takers
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Startup Failure Post-Mortems