Start-ups that failed within 5 years of starting in India and why!

India has one of the largest ecosystems for startups, but the trend shows that about 80-90% of the startups fail according to an IBM study. According to the Startup India program, around 27,000 startups registered under the program till 2020. Almost all of the reasons why Indian businesses fail early are connected to innovation and leadership: inadequate business models, bad planning, flawed consumer insights, or a lack of unique ideas.

Let us look into some of the startups that failed in India within the 5 years of their inception and understand what the reasons were behind their folding up.

1) Cogxio: An online dating site that allows users to find others who share their interests and then meet and chat in person. DateIITians (former name) was founded in 2011 by Kinshuk Bairagi and Layak Singh. Within three months, the site claimed to have had five million hits and had over 10,000 verified users.
However, they were unable to gather finances and build things up.
The duo then decided to launch Cogxio. The plan was to employ location information to turn online dates into actual dates. Cogxio has just about 12,000 registered users a year after its introduction. Despite this, the company went out of business in 2016.

Why did the startup fail?

  • The product put forward failed to provide the needs of the market. Online dating was a very unknown concept for Indians and didn’t gain much attention. The expectations did not match in terms of growth because they didn’t put in much funding towards marketing. All the funding went towards the development of the product.
  • It took some time to get to the point where it could be launched as an Android app and go live on mobile. As a result, the app’s accessibility was severely limited.

2) Just Buy live: Just Buy Live gave clients access to a diverse choice of brands using simplified technology, boosting their purchasing experience. Alpha Capital provided $20 million in Series A investment to the startup in January 2016. Following that, Ali Cloud Investment invested $100 million in a Series B fundraising round. Despite large fundraising rounds into a B2B e-commerce firm, they shut down operations nine months after raising $100 million.

Why did the startup fail?

  • The traditional B2B supply model is built on credit. Following that, the company ventured into Religare to give merchants with non-secured credit on a 30-day return policy when ordering things through their online platform. Due to the impact of demonetization, several merchants did not pay back Religare, and Just Buy was forced to settle the remaining debts.
  • One of the biggest startup business mistakes is the absence of an effective business model can lead to a lot of factors eating into the finances and make it difficult to acquire customers.

3) Task bob: Task bob provided consumers with immediate, high-quality residential services while increasing servicemen’s efficiency. They were attempting to address three of the most vexing aspects of any residential service model: time efficiency, quality, and pricing transparency.
The Mumbai-based startup raised a total of $ 5.8 million in three investment rounds. Following the investment, the firm shifted its focus to acquisitions to strengthen its position. They purchased Zepper, a Bangalore-based firm with a service objective similar to Taskbob. The firm finally ceased operations in 2017.

Why did the startup fail?

  • Because the firm charged a small fee on orders, profit margins were poor.
  • If the service is not of quality, it leaves a bad impression in the minds of the consumers. Customers were dissatisfied with the services they received, resulting in a decrease in order frequency.

4) Peppertap: Pepper tap, founded by Milind Sharma and Navneet Singh, is a platform allowing individuals to acquire grocery products online at a lower cost. Furthermore, the business assures that the order will be delivered to the customer’s home within 2 hours.
Over four rounds of fundraising, the firm raised a total of $51.2 million. Unfortunately, PepperTap declared its closure in April 2016.

Why did the startup fail?

  • PepperTap invested a lot of money to get clients. The main cause behind PepperTap was its unrestricted marketing spending. Due to large discounts, the firm was losing money on every purchase, with no prospects of future profitability.
  • The PepperTap “zero inventory owned” strategy was another cause for the demise. They just gathered grocery store inventory and then updated their offerings. The product experienced inventory issues as a result of unpredictable supply, and many orders had to be rejected.

5) Zeb Pay: Zeb pay acted as a platform for people to acquire cryptocurrencies like Bitcoin, ethereum, etc.

Why did the startup fail?

  • In 2018, the RBI ordered all government-regulated exchange platforms and banks to cease trading with cryptocurrency-related entities and to prohibit such transactions. This made transactional work difficult for the corporation, its investors and its consumers.
  • Legal regulations and complexities like demonetization have directly affected the inception of startups that have caused cash crunch and directly affected the finances of the startup.

6) Card Back: CardBack, founded by Nidhi Gurnani and Nikhil Wason, allows credit, debit, and prepaid cardholders to access all offers and incentives on their cards without disclosing any critical information.
During its five-year journey, the firm raised $170,000. Cardback, for example, is backed by famous angel investors such as Rajan Anandan, Sunil Kalra, and Alok Mittal.

Why did the startup fail?

  • In 2017, the Indian market was not mature enough because the majority of individuals in the nation did not have numerous credit cards. The firm needed large resources of investors willing to spend money educating customers about product safety and security.
  • They even attempted to relocate its headquarters to Singapore, a country with a multi-credit card culture. However, the plans collapsed owing to a disagreement with a major investor.

The majority of the mistakes that caused start-ups to fail are frequently the consequence of a lack of knowledge about the industry, as well as the financial requirements and setup. Entrepreneurs must learn about prospects and make relationships in order to run a viable business. There are other free courses available, such as the Walmart Vriddhi programme, which assists entrepreneurs in learning as well as providing tools that they may utilise to maintain a sustainable business.


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