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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 20 reasons that startups shutter. 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:. 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. Title: Financial services firm GoBear closing business. The Strait Times reported:. The factors included a prolonged period of weakened demand for some financial products and services, in particular travel insurance.
Quantitative trading platform Quantopian announced in October that it would shut down and that its co-founders and employees would move to Robinhood. Bloomberg said about the shutdown:. 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. The startup, which was launched in , also tried to make money by selling an enterprise version of its online platform to financial firms.
But that never really took off, and it was mainly banking on its hedge fund to succeed, according to people familiar with the matter who spoke on the condition of anonymity. The fund stopped trading at the start of In an interview with the Boston Business Journal, Fawcett said the fund had underperformed.
MENAbytes has spoken with multiple employees at Awok all of which have confirmed that the company has been in crisis since the start of Some of the vendors of the company were also not paid their dues, the former employees of the company told us. The online reviews of Awok on Trust Pilot suggest that the company was not fulfilling the orders of customers in spite of receiving payments. Title: Wedding apparel retailer Brideside abruptly shuts down. Launched in , wedding and bridesmaid dress retailer Brideside shut down in November , as it and the wedding industry on the whole faced ificant headwinds due to Covid According to Retail Dive,.
Title: The fintech company Joonko to cease operations after only 12 months of existence. Berlin-based financial products comparison site Joonko shut down in October after only 1 year in operation. An alternative and sufficient financing is not possible in such a short period of time, so the company is now taking the step and discontinuing the business. Title: Bay Area co-living startup HubHaus implodes, stranding renters and homeowners. The San Francisco Chronicle reports,. Many landlords who had rented their homes to HubHaus said in interviews and on a Facebook group that it had already slashed the rent it was paying them in recent months, leaving them tens of thousands of dollars in the hole.
Several said they were stunned to discover that it had also stopped paying utilities months ago. Because of the pandemic, utility companies are not cutting off service for nonpayment. Agtech imaging startup TerrAvion folded abruptly in September I cannot tell you how disappointed I am in this outcome. To make the decisions it will be called upon to make on every acre in the 21st century, agriculture needs modern, open, high-resolution data infrastructure. Though TerrAvion delivered the most volume in our category — with positive and growing margins — agribusiness and capital markets seem to have incommensurate expectations.
TerrAvion was caught in the middle. The team and I did everything possible in our power to make it work. Title: Seattle cybersecurity startup Rubica shuts down after running out of cash. Cybersecurity startup Rubica, which initially offered its services to individual consumers and small businesses, closed up shop in November The 4-year-old startup had attempted to pivot to offering its services to larger customers as it struggled to generate enough revenue from its consumer subscription service, but it was unable to convince investors of the viability of its model.
Haven, a t venture by Amazon , Berkshire Hathaway , and JPMorgan Chase aimed at lowering healthcare costs, announced it would shut down in February , 3 years after launching. According to CNBC,. One key issue facing Haven was that while the firm came up with ideas, each of the three founding companies executed their own projects separately with their own employees, obviating the need for the t venture to begin with, according to the people, who declined to be identified speaking about the matter.
Title: Crypto payment and wallet project TenX shuts down. Cryptocurrency payments startup TenX is sunsetting its current services and has disabled new ups and deposits. The startup, which was incubated by PayPal in , announced in October it would discontinue its cards as its card issuer Wirecard filed for insolvency.
The company stated,. Lumina Networks, a provider of open source software for telecom networks, announced it was going out of business in late August The switch to open source did not take place at a pace anywhere close to the speed that would enable us to operate and grow our business, despite commitments from many to the contrary. We have also found that Covid has actually redirected funds away from automation projects and into building-out raw infrastructure, further delaying adoption.
The first half of has been defined by the Covid pandemic, which saw the downfall of many iconic retailers as well as a range of startups that faltered amid a global lockdown. In this update, the hospitality industry was hit especially hard, with several short-term rental and travel startups forced to wind down operations. Fashion and media companies also lost customers and dollars they needed as consumer spending pulled back and investor appetite waned. Some of these failed companies were facing problems far before the crisis, from over-promised software to stiff competition to shady business practices.
Legal tech and law firm startup Atrium shut down in March , following an unsuccessful pivot to a pure software offering in January. According to a Forbes investigation published in July ,. 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. Title: The End of Starsky Robotics. Starsky Robotics, an autonomous trucking tech startup, folded in March Timing, more than anything else, is what I think is to blame for our unfortunate fate.Hey i need a p2p girl asap
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Startup Failure Post-Mortems