After the irrational exuberance of 2015, when hedge funds and VCs were falling over themselves to back internet businesses in India, there’s been a sobering down this year. Software industry body Nasscom noted a 20 -30 percent decline in the funding.
Several others just folded up. As many as 1,000 startups were shut down more than half of which were founded in the Indian startup ecosystem’s takeoff period of 2013 and 2014.
Here is a list of Top 10 startups that failed and made it to this list.
1) PepperTap: Hyperlocal grocery delivery startup PepperTap has the dubious distinction of being the biggest failure of 2016. The Gurgaon-based startup had raised over US$50 million, including a US$36 million series B round led by e-commerce player Snapdeal in September last year. And yet, less than a year later it shut down.
2) AskMe: Malaysia-based investor Astro had to file a petition in the Delhi high court to close down Getit Infoservices, the parent company of the e-commerce marketplace AskMe. The investor says the business has been floundering despite the US$300 million it pumped in since 2010. And despite holding 99 percent of the shares, it was thwarted in liquidating the company.
3) TinyOwl: raised US$15 million in February last year, followed by a bridge round of US$7.4 million in October to give it an extended runway. But all the funding could not solve the core problems of delivery costs, negative margins, and unreliable food quality and service from restaurants. It had acrimonious layoffs followed by a merger with logistics startup Roadrunnr.
4) BiteClub: A similar fate befell BiteClub, which wanted to connect home chefs with professionals ordering food in cities. It got US$2 million in seed funding from angel investors, including celebrity chef Sanjeev Kapoor. But it closed down within eight months.
5) Purple Squirrel: Purple Squirrel, an EdTech financial startup, backed by Matrix, closed down business in May 2016. The Mumbai-based startup was launched to connect students with industry leaders and big companies for industrial exposure and training. However, it was forced to shut down due to continuously dipping sales and increasing cash burn.
6) Frankly Me: Another name in the failed startups list is FranklyMe! It was a video micro-blogging website founded by Abhishek Gupta and Nikunj Jain in 2014 with the premise of letting people express themselves through videos. It has raised $600k seed funding from Matrix Partners. In another round, it has received an undisclosed amount from undisclosed investors. Despite the fact that it has been a well-funded company, it failed to capture the market attention and closed down all operations in February 2016.
7) AUTOonCAB: Gurgaon-based auto-rickshaw booking app AUTOnCAB has shut down its operations owing to stiff competition from its heavily funded rivals. Launched in 2014, the startup laid off 40 employees in the process. Its co-founder Vinti Doshi said that Uber and Ola have been offering a lot of discounts and incentives and they did not unnecessarily want to burn cash. The company reportedly was in talks to raise fresh funding for a long time but failed to seal a deal.
8) Dazo: an app-based service that curated and delivered meals, has suddenly shut down its operations in October this year—barely a year after it started. It came as a surprise to many as the company was backed by bigwigs such as Google India chief Ranjan Anandan, TaxiForSure co-founder Aprameya Radhakrishna, and former Freecharge chief executive Alok Goel. But Dazo is not an exception.
9) ClassVerse: Delhi-based fitness startup ClassVerse closed its operations just after 10 months of its start. It was launched by Rukaiya Kanchwala, a former director of Jabong as a marketplace to provide fitness lovers access to health services but failed to achieve unit economics. It was operating a business in Mumbai and NCR areas.
10) Fashionara: Bangalore-based Fashionara, which was launched by former Reliance Trends CEO Arun Sirdeshmukh and Former Chief Technology Officer, Times Internet Ltd, Darpan Munjal in 2012 closed its business in May 2016. It has raised $4 million from Helion Venture Partners and Lightspeed Venture Partners and scaled business in apparel, accessories, and footwear segment.