The rise and fall of the startups is a part of the startup ecosystem, but when your riding on a cash cow that is funding an idea to make it happen, many startup often lose sight and fail to turn an idea into a successful startup.
This article will showcase Five Most Funded Startups in India that got huge funding but got failed to make it into a successful company.
1) PepperTap :
- Categories : Grocery delivery services
- Founded Date: Nov 26, 2014
- Date of Shutting down : April 2016
- Founders: Milind Sharma, Navneet Singh.
- About the company : Peppertap was a grocery delivery startup, which used to delivery handpick products to the consumers at lowest cost.
- Funding : According to the CrunchBase reports, PepperTap till 2015 secured the funding of $50 Million, from the leading investors like SAIF Partners, Sequoia Capital, ru-Net, Snapdeal, InnoVen Capital and others.
- Reason Behind Shutting down: In an interview given by PepperTap Founder to a local newspaper, he said “We operated on a negative margin per delivery, and in such a scenario, the path to profitability look very distant for the two or three-year.”
2) AskMe :
- Categories: Apps, Mobile
- Founded Date: 1986
- Founders: V.S.S. Mani
- About the company: Askme.com was an online marketplace for an Indian consumers to find information related to anything and everything; be it restaurants, travel, matrimony, jobs, education, mobile, gadgets on their website or by contacting them on their call centers.
- Funding: $300 million (till 2010)
- Closed Date : 2016
- Reason Behind closed down: “As per the sources the main reason behind shutting down the Askme was the dispute between Askme founder and Malaysia based investor who filed the lawsuit against the company in Delhi high court demanding that their sister concern company Getit must be shut down. The investor in its lawsuit claimed that “The business has floundered, despite having $300 million which the company raised in 2010 and even though after holding 99 percent of company shares it was in liquidity of the company.”
3) TinyOwl Technologies :
- Categories : Food and Beverage
- Founded Date : 2014
- Founders : Harshvardhan Mandad, Tanuj Khandelwal
- Funding raised : In four round funding, TinyOwl Technologies secured nearly to $27.7 million from the investors like Sequoia Capital India, Matrix Partners, Nexus Venture Partners and others.
- About the Startup : Mumbai-based food ordering app, TinyOwl Technologies used to offer the users to order via their Android and iOS app, and help the users by showing the near by restaurants and hotels for ordering the food.
- Reason Behind Closing down : “Even the startups has maintained to secure the $15 million funding, and 7 million in bridge round funding TinyOwl was unable to managed the core problems like delivery costs, negative margins and unreliable food quality and services from the restaurants.”
4) StayZilla :
- Categories : Hotel, Leisure, Tourism, Travel
- Founded Date : 2005
- Founders : Rupal Yogendra, Sachit Singhi, Sachit Singhi, Yogendra Vasupal
- Closed Date : Feb 24, 2017
- Funding raised : $34 Million in funding (Till 2016)
- About the Startup : Stayzilla Founded in 2017, the Chennai based startup which provides budget hotels and alternate stay accommodation to travelers in India.
- Reason behind Closing down : “Reason behind shutting down the company was because of the lack of network effect, inability to expand quickly including the high and low costs. Whereas some sources fimilar with this news say’s that one the main reason behind shutting down the startup was the lawsuit which was filed against the founder for fraud charges of $265k (1.7 crore) by Jigsaw Advertising Agency. Which showed Satyzilla in a negative way which effected the company to build its trust with the new and existing travelers and investors.”
5) Finomena :
- Categories : Finance, Financial Services, Internet.
- Founded Date : 2015
- Founders : Abhishek Garg, Riddhi Mittal
- Closed Date : Dec 1, 2017
- Funding raised : $1.7 million (asp per the reports)
- About the Startup: Finomena, the finance providing startup started in 2015 by Standford graduate Riddhi Mittal with Abhishek Garg was used to offer the small loans to the students and the millennial who locked the requirement of credit history for tradition loan. Finomena used to analysis the data from social media networks and buying patterns on mobile top-ups.
- Reason of Shutting down: The reason behind closing the startup was “The startup failed to attract more users and low transactions on their platform which effected the financial model of the company.”