Today each teen wants to turn out to be an entrepreneur. They all have big thoughts to turn into fact. But do those ‘Big Ideas’ definitely continue to exist the cold light of day? How many ideas grow to be real services and products run by means of corporations who display sustainable scale and increase? Failure is taken into consideration a sour pill in an achievement-loopy u . S . A . Like India. And so the query of failing stops brilliant young minds from realising their full potential in a brand new and courageous world – that of startups.
With solid government assist, and investor confidence, and accelerators and incubators in every important town and town, the startup surroundings of India is mushrooming. One blink, and one will pass over 10 new startups that have sprung up! But the issue that wishes to be noted is, the speed at which a startup is mushrooming is lesser than the speed at which it's miles failing.
As in line with a document through Nasscom launched in October 2015, three to 4 startups were being born every day in India. As a ways as funding is worried, within the past few months, it's miles discovered that on a median – three startups had been funded day by day, taking the full amount of funding to $3.Five Bn. This amount was spread over 720 deals in the first eight months of 2016.
Despite receiving investment and investor guide, there are startups whose unit economics, large idea, and commercial enterprise model fail and that they determined to shut their doors. They could not fight towards market conditions and hungry competitors. Market saturation is the most important motive in the back of shutting down of those startups. Also, a lot of startups did now not hit the proper numbers (market percentage, sustainable revenue fashions, and so forth.) to elevate the subsequent round (mainly pre-series A and Series A) of budget which led to their early demise.
As part of our yr in overview series, we, at Inc42, have indexed the pinnacle shutdowns of 2016.
Founder: VSS Mani
Funding: Till date Astro Holdings has invested $119 Mn (INR 800 Cr).
Shut Down: August 2016
AskMe, a web classified internet site introduced the shutdown of its operations in August 2016, due to coins crunch, as most of the people of traders exited and it laid off its final employees. This step turned into taken after the alleged unplanned exit of Astro Holdings, its important investor.
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The organisation, in a recent letter written to the Ministry of Corporate Affairs and Registrar of Companies, has now requested the authorities to make certain that Astro does no longer exit the country without meeting its liabilities and commitments.
Recently, it saw resignations from extra than 650 personnel who have been inside the annual salary bracket of INR 2.Five Lakhs-INR 6 Lakhs.
The shutdown has left more than four,000 personnel, vendors, and different creditors at AskMe and the investor, in a nation of panic.
Founders: Navneet Singh and Milind Sharma
Funding: Series A investment led by means of SAIF Partners and Sequoia Capital ($10 Mn + $1.2 Mn); Series B funding led by way of the Indian ecommerce organisation Snapdeal ($36 Mn); Series B investment led by means of InnoVen Capital ($4 Mn). Total funding of $fifty one.2 Mn in four rounds.
Shut down: April 2016
On-demand grocery shipping startup, PepperTap started out its case of pivoting and shutting down with a roll-lower back of its patron-centric grocery app. The corporation then pivoted to a complete stack ecommerce logistics employer. Earlier, in February, it had shut down business in larger towns including Ahmedabad, Chandigarh, Mumbai, Kolkata, Chennai, and Jaipur. Before that, in September 2015, it had rolled back operations in Agra and Meerut due to non-reputation of the concept in the ones markets.
In December 2015, Peppertap’s order proportion in keeping with day became approximately 20,000 which reduced to less than 1.000 orders due to the fact April 2016.
With a funding of $50 Mn in hand, the trajectory of enlargement become exponential. Due to this huge enlargement and integration, the customers faced a trouble of incapacity to look the whole product catalogue from a shop and, on occasion, even the vital gadgets had been lacking from catalogue seen to them. These small problems blended together and sooner or later led to the startup’s failure.
Founded: October 2015
Founder: Pallavi Saxena, Balasubramanian Anantha Narayanan, and Prabhakar Banerjee.
Funding: $2 Mn Seed funding raised led by way of celebrity chef Sanjeev Kapoor, Ravi Saxena, and unnamed overseas buyers.
Shutdown: May 2016
Home food delivery startup, ZuperMeal provided domestic-cooked food. Just after elevating its Seed round of investment, the startup closed down its operations.The startup’s app shows error while downloading, and its internet site is likewise no longer working. Though the founder did now not clean the motives for shut down, Balasubramanian has reportedly joined logistics startup LogiNext as a VP.
Founders: Utkarsh Srivastava, Lalit Vijay
Funding: Angel round of funding led by using physician-cum-angel investor Suyash Sharma INR 50 Lakh ($77,000).
Shutdown: May 2016
Zeppery become a restaurant food pre-ordering app that allowed customers to pre-order meals at restaurants and other meals retailers. The app gave users the choice to browse the menus of nearby partnered eating places and stores at food courts or railway stations and deliver their orders while not having to wait in line.
The startup had tied up with some of meals shops which includes Haldiram’s, Bikanervala and Moti Mahal, among others. It charged a fixed percent fee on every order.
Barely six months after setting out operations, the startup decided to close store. The founders stated that they have been looking to copy Tapingo, a US-based totally startup, however realised that this model was too early for the Indian market and the client retention charges were too high.
Founder: Abhishek Gupta and Nikunj Jain
Funding: Seed spherical of investment led by Matrix Partners ($600K).
Shut down: February 2016
Frankly.Me was a social media platform for video communique. It works like a video running a blog service. Users can interact with human beings via actual-time and non-actual-time films. For agencies, manufacturers, and professionals, the app provided them facility to aid their brand communications by way of relying on a more customized andbetter-registeredd medium, with their users. It labored like a video infrastructure facility for specialists.
As per assets, before shutting down, the startup fired all its personnel. In November 2015, FranklyMe laid off close to forty personnel as the employer pivoted its commercial enterprise version. Frankly.Me app has now completely shutdown. The cause behind the shutdown is currently uncertain. However, it's miles speculated that the startup become looking out to elevate funds from new traders, but the lack of ability to raise caused the shutdown.
Founder: Sahil Baghla and Ayush Varshney
Funding: Raised $1Mn from investors like Times Internet, LetsVenture, ah!Venture and angel investor like Aniket Khera, Rahul Bhatia, Rudy Gopalakrishnan.
Shutdown: March 2016
Formerly called Bluegape, the Murmur app used to curate content from famous blogs and information websites and serve them in bursts of 10 portions. The content material used to be a blend of photos, videos, GIFs, news, blogs etc. And become showcased as a headline in a visible format with hyperlinks to the source.
A agency of greater than forty employees, Murmur turned into also a part of Google’s Launchpad Accelerator announced in December remaining 12 months. As there were no updates on the app, diverse media resources highlights that the corporation turned into additionally in talks with Times Internet for an acquisition. The deal, but, later fell apart, which could be a chief reason main to shut down.
Founded In: 2014
Founders: Prateek Agarwal, Aushim Krishan, Siddharth Sharma
Funding: $500K from traders like growX ventures, Powai Lake Ventures and angels which includes Aneesh Reddy (Capillary Technologies), Ashish Kashyap(Goibibo Group), and Alok Mittal (Canaan Partners).
Shut down: May 2016
An on line marketplace to attach cooks and clients, BiteClub had a each day changing menu that customers ought to order from thru cell or the net app. The meals turned into organized with the aid of a curated network of home chefs, newbie chefs, and expert cooks. Within 8 months of raising an undisclosed amount in pre-Series A funding from GrowX Venture management, the startup founders determined to halt the operations.
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Founder Prateek Agarwal, stated, “We are on a temporary halt. While scaling up we faced certain problems again and again. So we notion it's far higher to take a step back, clear up all of the problems and then start with the operations once more.” However, there has been no replace on its social handles when you consider that May.
This close down also caused the layoff of personnel.
Founded In: 2013
Founders: Aditya Gandhi and Sahiba Dhandhania
Funding: Raised an undisclosed quantity of investment from Mumbai-based totally assignment capital investor India Quotient and INR 12 Cr in second spherical led by Matrix Partners.
Shut down: May 2016
Purple Squirrel Eduventures (PSQ) turned into an online market for enterprise exposure and supplementary training. With a assignment to make practical and enterprise-driven education accessible to all, the SINE IIT Bombay incubated startup facilitated enterprise visits, workshops and hands on training for college students across fields.
Due to continuously dipping income and increasing cash burn price, the organization had to shut down its operations.
Despite raising a bridge spherical in April 2015, the business enterprise became left with best approximately $441.5K (INR three crores), with a burn charge of $ 1.77K (INR 1.2 crores) per month. This ended in a layoff of forty human beings and the resignation of more, out of a team of workers of a hundred and twenty. The corporation raised over $2 Mn USD (INR 15 crores) to this point and was under pressure to gain double that focus on by using 2015-16.
These are not the handiest startups which have failed this 12 months. If we take a look at the foodtech zone on my own, 4 startups inside the hyperlocal meals shipping space have close down their operations in early 2016. Startups like Cyberchef, Mealhopper and Foodpost have closed their doorways inside six months of beginning operations.
Apart from those startups like Fashionara, Delivree King, AutoRaja, Tooler, Zippon are a few names which collapsed inside a 12 months’s time. The number one motive at the back of the failing of these startups changed into their lack of ability improve funds. Today, buyers have become more cautious even as making an investment. They need proper commercial enterprise model and numbers to fund them, as evidenced by the funding slowdown this 12 months.
Also, with the AskMe shutdown, it is clear that even legacy agencies aren’t safe from marketplace corrections. People’s possibilities as customers are converting everyday – they're worrying for extra innovate concepts and ideas which hobby them. But no matter this, recollect what Steve Jobs stated: “Sometimes while you innovate, you make errors. It is excellent to admit them quick, and get on with enhancing your different innovation.” He changed into speaking about ‘Fail speedy, fail tough!’
So startups, who have failed, this become no longer the only possibility you needed to make a mark. In truth, it may just be the beginning of your adventure. Identify your errors, work on them and are available lower back with a bang!