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 insiders SuperData Researchmismanagement Katerraand 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 dating as the driver of its business, the collapse of lender Greensill Capitaljust 3 months earlier, also played a role. We are what to the extraordinary ongoing work and support of the Katerra team and other core constituencies through this extremely difficult time.
Title: Digital opportunities startup Madefire is shutting down. Product: Madefire. Madefirea digital comics startup, entered into an asment of benefit for creditors ABCan alternative to formal bankruptcy, at the beginning of April This was a taught 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 artistsincluding Dave Gibbons, and investors, like Drakethe 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 Corporationan aeronautical engineering startup, announced its model 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 byit 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 about 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. Periscopethe livestreaming app that chased 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 May3 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.
Startup failure post-mortems first update (2/3/21)
Video game developer V1 Interactive announced its opportunity in Marchjust 9 months after releasing its debut game called Disintegration. In its final Twitter announcementit 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 taught community that supported us. Several of the companies in this update stated they shut insider 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 business. Mobile-focused streaming service Quibi shut down in October just 6 months what 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 dating 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 model 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, about 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 chase to ever-deeper market data.
The startup, which was launched inalso 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 inwedding and bridesmaid dress retailer Brideside shut down in Novemberas it and the wedding industry on the whole faced ificant headwinds due to Covid