Are India’s tech startup serious businesses? … if a lot of businesses lose money belonging to greater fool investors and eventually shut down.
With a boom of startup culture in India, new entrepreneurs with their innovative solutions are coming on horizon day by day. Every problem that you can think of in daily life has been addressed by at least one startup.
If your grocery is getting finished, just click on Grofers, PepperTap etc and grocery will be at your doorstep. If you need to visit a doctor, check the nearby doctors on Practo. If you are planning to buy a home, browse Housing, QuikrHomes, Magic Bricks etc. and get the details of all the properties available.
Let’s take a look at some of the startups that shut their shop and moved on:
Founded In: 2015
Founders: Rahul Yadav, Azeem Zainulbhai
Funding: INR 3.1 Crore from YouWeCan Ventures, Sachin and Binny Bansal at a valuation of INR 170 Crore
Rahul Yadav’s most talked about new startup, Intelligent Interfaces, shut down its operations just few months after raising funding. As per Yadav, Intelligent Interfaces was supposed to provide intelligent data aggregation and visualisation solutions to the Government of India, to make governance 100 times more efficient. Even after 7 months since the launch announcement and about 5 months after the funding announcement, no one knew what the company was doing. In a recent status update on Facebook, Rahul had mentioned that the startup was not working out. Apparently, Rahul has registered three more companies in the past few months.
Founded In: 2012
Founders: Arun Sirdeshmukh, Darpan Munjal
Funding: $4 Mn from investors like Lightspeed Venture Partners and Helion Venture Partners. There was also news about the startup raising $7-8 Mn in year 2014.
Fashionara was an ecommerce portal that focused on categories such as apparel, footwear and accessories. Earlier in 2015, it launched an Android app with the flash sale model. The startup has been reported to shut shop. Its website has not been working for the last few days and there is not much update on its social media channels. Co-founder Darpan Munjal has also left the company in January this year and is currently working at Squadhelp.com. The startup did not clarifyr the reason for shutting down its operations. On the other side, Bejul Somaia of Lightspeed, one of Fashionara’s investor, stated that Lightspeed has exited from the company sometime back.
Founded In: 2015
Founders: Neeraj Bisht, Akash Sharma
Delivree King was a Delhi-based ecommerce focused logistics services provider. It provided on-demand delivery & discount coupons with every parcel. The startup has now closed its operations as it was unable to raise fresh funding. The startup founders said that it had scaled to about 15 cities but it was becoming difficult to sustain operations at that level with no funds. Neeraj, founder of Delivree King, has now joined as Chief Obstacle Officer at YumBox.
Founded In: 2013
Founders: Anubhav Agarwal and Aishwarya Raman
Funding: Seed fund of $25K from the Shell Foundation. It had plans to raise about $3 Mn.
AutoRaja was a Chennai-based auto rickshaw aggregator. It provided auto over call, SMS, Whatsapp, or mobile application, to the users. The startup wound up its services from the city due to lack of funds and inability to sustain amidst competition. The top officials and the remaining fleet has reportedly joined Ola.
Founded In: 2014
Founders: Nikunj Jain, Abhishek Gupta
Funding: Seed funding of $600K from Matrix Partners; undisclosed amount in Pre Series A from undisclosed investors
FranklyMe was a video micro-blogging platform. The startup also had a B2B offering, where it made mobile and desktop web Q&A widgets for news, content sites. Its operations were shut down in February. The startup stated that it had to shut shop as it was not able to achieve sustainable product/market fit. It also raised an undisclosed Pre Series A round of funding from new as well as existing investors in January 2016. After shutting down, the company had returned the remaining funds back to the investors. In November 2015, it laid off employees citing that it had pivoted from a celebrity Q&A platform to a more horizontal video social network.
Founded In: 2015
Founders: Himanshu Arora, Vishal Gupta, Sukanth Srivatava
Funding: $110K from angel investors Raghu Khanna and Sameer Gupta
Tooler was an on-demand Delhi-based laundry startup. It provided easy pickup, washing & ironing of clothes with doorstep delivery within 24-36 hours. The startup had stopped taking orders since February and the website is now inactive. Its social media pages are also inactive since January. Sukanth Srivatava, one of the co-founders of the company, who is now working at RailYatri, confirmed that the startup has shut shop. It is speculated that the startup was unable to sustain without follow on funding.
Founded In: 2015
Founders: Venkatesh CL, Shakir Basha and Sachin Shet
Zippon was a Bangalore-based packing and moving service that provided low-cost relocation logistics services. It provided real time prices, online price comparison, pre-screened logistic solution providers, real time tracking, transit insurance and affordable prices. The startup shut shop as it could not raise fresh funding. Also a proposed deal to sell out to a larger rival fell apart at the eleventh hour. The co-founders have sorted out new roles for themselves. Venkatesh moved on to start an online email marketing company called Zippmail, Sachin launched a construction firm christened Buildora and Shakir has now started working with Oracle. In September last year, New Delhi-based Turant Delivery, an on-demand logistics aggregator for relocation services, was close to seal the deal to acquire Zippon. However, the deal fell apart.
Founded In: 2013
Founders: Tapan Kumar Das and Ryan Fernando
Funding: Seed funding of $1 Mn from investors including Robin Uthappa
Online meal service provider iTiffin offered tiffin based on a defined calorie count requirement. The startup followed a subscription-based business model. iTiffin has now stopped taking orders and advised employees to look for jobs. Its website has been inactive since March 25. The company has apparently told employees that the portal might resume operations in May. A message on the website reads: “We’re taking a break to re-work. We’ll be back.”
Founded In: 2015
Founders: Harshdeep Rapal, Ravi Baranwal
Funding: Undisclosed amount from Matrix Partners
EazyMeals was a food tech business that provided on-demand food in Delhi-NCR. Harshdeep Rapal, who incubated and ran EazyMeals, said that they decided to shut operations after eight months. He said that the startup was in talks with a few investors to raise the angel round but then decided to shut the business down and write off the investment. He did not share the reason for the same.
Founded In: 2013
Founders: Aditya Gandhi, Sahiba Dhandhania
Funding: $2 Mn from investors like Matrix Partners and India Quotient
Purple Squirrel was a Mumbai-based ed-tech startup that connected students with industry partners for field visits, workshops and hands on practical experiences. It has shut down its operations citing continuous dipping sales and increasing cash burn rate. The team was dealing with these issues for the past few months.
Founded In: 2015
Founders: Aman Haji, Prashant Jain, Pratik Moona
Funding: Undisclosed amount in seed funding led by Tracxn Labs with few other angel investors
Klozee was a Bangalore-based online apparel rental platform that allowed customers to access apparels on rent. The startup has shut down its operations pointing to the challenges faced by players in the pre-owned apparel sale and rental space in India. The three co-founders have now joined home decor marketplace Livspace.
Founded In: 2015
Founders: Utkarsh Srivastava, Lalit Vijay
Funding: $77K from angel investor Suyash Sharma
Zeppery was a restaurant food pre-ordering app that allowed users to pre-order food at restaurants and other food outlets. It decided to shut shop just after six months of commencing operations. The founders stated that they were trying to copy Tapingo, a US-based startup, but realised that this model was too early for the Indian market and the customer retention costs were too high.
Founded In: 2011
Founders: Sahil Baghla, Ayush Varshney
Funding: It had raised $1 Mn from investors like Times Internet, LetsVenture, ah! Ventures and angel investors like Aniket Khera, Rahul Bhatia, Rudy Gopalakrishnan.
Delhi-based Murmur app, earlier known as Bluegape, launched itself as a platform where anyone could make collaborative listicles with visuals. It rebranded to Murmur in November 2015. The app has now shut down. Two of the company’s investors confirmed the development. The reason for shutdown is not clear, however, the company was in talks with Times Internet for an acquisition but the deal fell apart.
Founded In: 2015
Founders: Balasubramanian A, Pallavi Saxena
Funding: $2 Mn in seed funding from chef Sanjeev Kapoor
Mumbai-based home food delivery startup ZuperMeal provided home-cooked meals. The startup has apparently closed down its operations in just eight months after it raised seed funding. The startup’s app is showing error while downloading and its website is also not working. Though the founder did not clear the reason for shutdown but Balasubramanian has reportedly joined logistics startup LogiNext as vice president.
Founded In: 2015
Founders: Nikhil Gupta, Anurag Meena, Rajat Jain
Funding: Undisclosed amount in seed funding from some HNIs
MovinCart was a hyperlocal grocery delivery app that shut down its operations some time back. Co-founder Rajat Jain quit the company in January, the other two co-founders, Nikhil Gupta and Anurag Meena, set up a logistics-tech platform, under CloudPlay Technologies.
Founded In: 2015
Founder: Rukaiya Kanchwala
ClassVerse was a Delhi-based startup that provided access to fitness studios, classes and gyms to users for a monthly membership fee. It also offered access to activities such as zumba, cycling, yoga, dance, kickboxing, bodybuilding, swimming, badminton, tennis and others. The founding member said that it closed operations as it was difficult to achieve unit economics.
Founded In: 2015
Founder: Abhimanyu Dhamija, Saurabh Goel
Funding: $1 Mn in risk capital from undisclosed angel investors
Amber Wellness was an on-demand online beauty startup. The startup has shut down just after a few months of operation. The startup has stopped services in all three cities, viz. Bangalore, Delhi and Mumbai, due to low margins. The founders said that we are not shutting down the company but are exiting the domain as on-demand businesses are going out of fashion.
Founded In: 2011
Founder: Talvinder Singh, Kranti Agarwal
Funding: $340K from investors like GSF, 500 Startups, TA Ventures
Tushky was an online marketplace for discovering and monetising leisure activities. The startup has quietly stopped operations after it failed to scale up and raise further funding. Co-founder Talvinder Singh has now joined Oyo.
Let’s take a look at some of the startups that have shut some divisions:
Flipkart shut down its grocery delivery division Nearby that was launched in October last year in Bangalore. It noticed that the hyperlocal delivery market is less evolved, where demand is low and differentiation almost non-existent.
Ola Bike, Ola Cafe & Ola Store
Ola launched its bike as a taxi service in March. However, within a day, Ola faced law infringement notice from Karnataka State Transport Department for violating the Motor Vehicles Act and continuing to operate without requisite permission. Consequently, the company quietly withdrew the bike taxi icon from the app and the service was no longer available. It stated in a tweet that they were currently working on its bike services and will keep posted once they are up and running.
Ola shut down its food delivery service ‘Ola Cafe’, which it launched in March 2015. The company made a formal announcement on its blog.
Ola Store was shut down in early March 2016. Ola had started beta testing of its app ‘Ola store’ for grocery and daily needs in June 2015.
On-demand grocery delivery startup PepperTap roll-backed its consumer-centric grocery app. The company has now pivoted to a full stack ecommerce logistics company. Earlier, in February, it had shut down business in larger cities such as Ahmedabad, Chandigarh, Mumbai, Kolkata, Chennai, and Jaipur. Before that, in September 2015, it had rolled back operations in Agra and Meerut due to non-acceptance of the concept in the markets.
Chat-based personal assistant app Helpchat closed down its chat wing and fired close to 100 people. The fired employees are a part of the chat operations and quality team as confirmed in a blogpost by founder Ankur Singla. The company decided to phase out chat from the app and create the same level of experience using automation and simple user interfaces. The company was initially launched as a complaint resolution platform called Akosha. It had pivoted last year to a chat based personal assistant.
Yebhi has been in news for quite some months about wrong things happening in the company. Is it shutting down? Here are some reported data points.
- Co-founders Nikhil Agarwal and Rahul Jain quit over differences with Manmohan Agarwal in January, 2014.
- Competition has moved fast and adapted their business model to that of a marketplace and prepare better from an attack from Amazon, yebhi apparently is trying to catch up.
- No recent funding.
- IRCTC tie up didn’t work as expected.
- No major advertisement in the last year or so.
- Consistent fall in website traffic. Alexa rank has fallen from 2,000 to around 5,000 over the last 6 months.
- No updates on Yebhi’s facebook page since June 17, 2014. Earlier the site was posting every few days. Didn’t see any activity for independence day as well. No special offers.
- All major affiliate networks have asked publishers like Klypy to stop promoting offer and deals for Yebhi.com, as payments have been an issue.
- Employees and sellers have not been paid for months. Many sellers have since then moved out of the marketplace.
Update: Yebhi has changed its business to a discovery model.
Reportedly, Tradus is in the process of winding up. Tradus, witnessed the exit of its CEO (Mudit Khosla) and the change in their business to a hyper-local model. But the model with thin margins and Naspers recently investing in Flipkart sounds like tradus is going to have difficulty in continuing for long. (via Nextbigwhat)
Documented e-commerce shutdowns and acquisitions
February – BabyOye, JustEat
BabyOye has been acquired by Mahindra group. Mahindra operates the Mom & Me brand of stores. The sale is reportedly an asset sale and the investors have taken a huge write-off on their investment inBabyOye. It will be interesting to see if BabyOye will survive or merged with Mahindra’s Mom and Me brand. (via Economic Times)
JustEat India has been acquired by Foodpanda in a stock-led deal. This is part of Foodpanda’s effort of acquiring a series of competitors in India and internationally to reportedly prepare for fighting the possible fight with Zomato. (via FirstPost)
January – Zipdial
Zipdial, popularly known for pioneering the ‘Missed call’ campaigns has been acquired by Twitter. The deal is reportedly driven by Twitter’s need to increase engagement within its user base and is valued in the range of USD 30-40 million. (via Forbes)
November – TastyKhana
TastyKhana, backed by German based Delivery Hero has been acquired by Foodpanda (part of Rocket Internet). The acquisition is part of an international swap of companies in different countries to avoid competition in each other’s territories. The value of the deal is not available but it is believed to be in the range of USD 20-25 million. TastyKhana brand is reportedly going to continue post acquisition, but as per trends, may not be for very long. (via iamwire)
October – Muziboo
Muziboo, an online community for music creators has shut down its website. Muziboo landed in copyright infringement issues. They were receiving DMCA requests on almost a daily basis which were also sent to their hosting provider.Finally, Muziboo succumbed to pressure and finally shut down. (via NextBigWhat)
August – Payzippy.com, IRCTC e-commerce portal
Flipkart pulls the plug on its payment gateway, PayZippy. The news coincides Flipkart’s recent strategic investment in Ngpay. It is believed that closure of Payzippy is a result of PayZippy not becoming a wallet before RBI changed its plans. (via MediaNama)
IRCTC shuts down its e-commerce portal shop.irctc.co.in, which was setup in partnership with Yebhi.com. Reportedly, IRCTC is looking for other partners to take advantage of their high traffic volumes. (vianextbigwhat)
June – Oravel
Oravel, a destination for short and mid term rentals for bed and breakfast joints, private rooms and serviced apartments has shut down. The start up had received a funding of USD 100,000. The company has now launched (re branded as) OYO Hotels. (via Nextbigwhat)
May – Myntra.com
Myntra.com gets acquired by poster boy of Indian e-commerce, Flipkart. The deal values Myntra reportedly at Rs. 2,000 crores and is a 100% acquisition in cash and stock. After the acquisition, Myntra will continue to operate as a separate entity with the CEO of Myntra heading Flipkart’s fashion business. (via Times of India)
April – Allschoolstuff.com
Allschoolstuff.com after selling over a million school & learning products has closed down its operations. The site was active for 3 years and raised $1 million. Failure to raise another round of funding was the cause for the closure. (via NextBigWhat)
March – Dhingana
Rdio acquires Dhingana, plans to launch Rdio India by the end of the year. (via thenextweb)
February – Dhingana
Dhingana closes down primarily due to failure to renew license with T-series. (via Times of India)
Musicfellas, an indie music platform was acquired by Gaana.com. The deal was reportedly for Rs. 50 lakh. The deal involves a founder, Mayank Jain joining the Gaana team. (via NextBigWhat)
December – Indiaplaza
Indiaplaza.com, India’s pioneer in online shopping space primarily offered electronics domain has stopped operations . The site was unable to raise fresh funding and reportedly closed down operations sometime after Diwali. (via Wikipedia)
November – Goodlife, Chhotu.in
Personal care products site Goodlife.com, started by Firstcry.com shut down. (via medianama)
E-commerce logistics startup chhotu.in shuts down operations and core team joins Paytm. (via Yourstory)
September – Husbabies
Hushbabies, run by Lapis Marketing Put. Ltd., which acquired Mangostreet.com in August 2012 has finally closed down. The company was a victim of capital crunch and poor sales. (via BusinessWorld)
July – Miraistore
Miraistore, Bangalore based online retailer, backed by an angel investor and having raised $ 1 million has shut down the website to focus on a private label, Felicia. (via NextBigWhat)
June – Redbus
redBus.in acquired by Ibibo group backed by Naspers group (runs sites like Goibibo, tradus, payu) reportedly for Rs. 800 crores. (via NextBigWhat & Techinasia)
May – Koolkart, Aproy.com, Istream.com, Timtara.com, 21diamonds.in
Koolkart, an ecommerce website with price comparison and social combined shows out of stock for all products and finally closed down. (via NextBigWhat)
Aprov.com, a Bangalore based marketplace for Indian handicrafts has closed the site for new orders. All products are out of stock and the founder has moved on. (via NextBigWhat)
Istream.com, an online video streaming company, having securing $5 million in funding, shut down with huge disappointment as per a note on the home page of the website. The reason for the shut down was failure to raise another round of investment. (via NextBigWhat)
Timtara.com shut down its operations. The shut down followed the arrests of Timtata CEO on allegations of fraud. (via iamwire)
21diamonds.in, a rocket internet owned online jewellery and fashion accessories website has closed operations in India. The site no longer is available. (via iamwire)
March – Rock.in, Urbantouch.com
Rock.in, a fashion retailer started in May, 2012 has completely shut down with the website and customer support numbers being not operational. Rock.in was backed by Partech International and reportedly was looking to raise a series B funding of $5 million, which apparently didn’t come through. (via NextBigWhat)
Urbantouch.com, was supposed to be run as independent website and have cross linkages with fashionandyou.com; but within months of the acquisition, the website is now redirected tofashionandyou.com. (via Medianama)
February – Inkfruit.com, Travelocity.co.in
Mumbai based Inkfruit.com (a community based customized fashion and accessories retailer) was acquired by Bangalore based online fashion retailer Zovi.com. (via Times of India)
Travelocity.co.in closes down Indian operations and urges users to use their global site. (via Medianama)
August – Urbantouch.com, Mangostreet.com
Urbantouch.com reportedly was acquired for $30 million by fashionandyou.com in cash and stocks. (viaMedianama)
MangoStreet.com, an e-store for kids products was acquired by Lapis Marketing pvt. Ltd., the company behind Hushbabies.com for an undisclosed amount. (via vccircle)
June – Travelguru.com
Hotel aggregator Travelguru.com was acquired by Yatra online pvt. ltd. from Travelocity. (via vccircle)
May – Letsbuy.com, eSportsBuy
Letsbuy.com closed down and is shows a message with link to Flipkart.com. Reportedly, some warehouses were shutdown with partial lay-off. (via Medianama)
eSportsBuy, which was bought by Snapdeal, has been closed and the website doesn’t show anything. (viavccircle)
March – MadeinHealth.com
MadeinHealth.com is acquired by Healthkart.com for an undisclosed amount. In related news, the founders of MadeinHealth were joining Yebhi.com reportedly for $4 million in cash and stock. (via vccircle)
February – Letsbuy.com
Letsbuy.com got acquired by Flipkart for cash and equity. The Letsbuy team of 350+ will continue to function independently with access to Flipkart’s technology platform and supply chain capabilities. (viaMedianama)