This article is part of Inc42’s Year-End Stories for 2017 where we’ll highlight the major developments, startup shutdowns from 2017 and their impact on the Indian startups and the ecosystems. Find all the stories of this series here.
Taskbob, Shopo, Stayzilla. At the start of 2017, the industry might have looked upon these names with pride owing to the expertise and the investor’s interest behind these Indian startups. But even the million dollar funding and years of strategic planning could not help them avoid their demise in 2017.
The startup shutdowns list of 2017 further added smaller yet popular Indian startups like Prophesee, Cardback and more, who raised decent funding and garnered consumer interest but were still not able to survive.
While in 2016, the major reason behind a large number of startup shutdowns was said to be lack of funding, in 2017 lack of market demand became the primary reason for the startup shutdowns. A recent CB Insights report cites that 42% of the startups that begin enthusiastically thinking they will change the world, are actually not needed at all. Thus resulting in high level of startup shutdowns.
Another recent report by Nasscom further cited that around 25% Indian startups found themselves in the valley of death this year, due to failure in raising follow-on funding rounds majorly beyond Pre-Series A.
Other factors such as failure to scale, weak business model, high cash burn as well as the external factors such as GST rollout and the continued impact of demonetisation also led to startup shutdowns in some industries as per the Nasscom 2017 report for Indian startups.
While we are now going ahead to step into another year filled with enthusiasm, zeal, and passion of budding entrepreneurs as well as other stakeholders in the Indian startup ecosystem, we at Inc42 tried to look back at a few of these startups, the reasons behind their startup shutdown and the current whereabouts of the founders.
Decoding The Indian Startups That Shutdown In 2017
As per analysts, this year the cautious nature of investors pursued more distress sales and consolidations, rather than complete startup shutdowns.
Further, the 2016 winter has forced investors, particularly in consumer Internet sector to write fewer cheques and hold on late-stage funding, thereby forcing the Indian startups to work upon profitability and positive unit economics right from the early stage.
Not only this, as per data released by Nasscom 2017 report, 55% of failed startups have received funding, highlighting the fact that only cash crunch is not the ultimate reason for startup failure. Plus the year saw much less number of new Indian startups as compared to 2016 which reported startup shutdowns, indicating that entrepreneurs now understand the harsh realities of the startup world and the implications of raising the outside money.
Keeping all these in mind, the Inc42 DataLabs team tried to bring interesting stats from the major 17 startup shutdowns of the current year on basis of sectors, location, funding rounds, and year of inception of these Indian startups which fell into the startup death valley.
As revealed by the analysis, most of the Indian startups that reported shutdowns were two-year-old companies, indicating the dearth of the follow-on funding round currently for the Indian startups.
Also, ecommerce sector witnessed the maximum startup shutdowns among Indian startups. The next sector which witnessed maximum startup shutdowns in India is fintech and hotel accommodations.
Delhi witnessed the maximum number of startup shutdowns in 2017 to the tune of 10. To be specific, Gurugram alone witnessed some seven startup shutdowns this year. While Bengaluru took the second stage with just four startup shutdowns.
Another interesting fact observed while looking at the data of startup shutdowns, we found that 50% of the founders, post-shutdown, have joined another company and are working on leading positions such as category head, CEOs, VPs and more. But only a small chunk has made a comeback as founders.
**This information about the startup shutdowns and the startups has been generated using publicly available data across media sources as well as our own internal investigation. Also, only the included Indian startups that had raised then more than a $100K and had closed their operations in 2017 in this startup shutdowns list.
Startup Shutdowns In India: Yearly Review 2017
- Launched in: 2012
- Founder(s): Nidhi Gurnani, Nikhil Wason
- Category: Fintech
- Headquarters: New Delhi
- Funding: The startup raised $170K in a funding round led by prominent angel investors such as Rajan Anandan, Sunil Kalra, and Alok Mittal in June 2014.
- Brief Overview: Cardback was a payment recommendation platform that helps credit, debit, prepaid cardholders save decent bucks every time they pay. The platform used to identify the suitable card or wallet for a payment, based on several factors, including card and wallet features, ongoing offers, cashbacks, discounts, surcharge waivers, earning, redemption and conversion of reward points using cards, and their fee structure.
- Shutdown Reason: Inability to raise funds and lack of demand was the main reason cited for the startup shutdown in April 2017. The founders believed that the market is not mature enough for a portal like Cardback as most people in India do not have multiple credit cards and the investor ecosystem in India was not suitable for this kind of product which needed deep pockets to educate customers in safety and security of the products.
- What Are Founders Upto: Post startup shutdown, Nidhi has joined the social time bank Hour Village, while Nikhil Wason has moved on to work with expat lending platform Stilt as head of its India operations.
- Launched in: 2005
- Founders: Yogendra Vasupal (Yogi), Rupal Yogendra, Sachit Singhi
- Category: Hotel aggregator
- Headquarters: Bengaluru
- Brief Overview: The founders initially launched the platform as an online travel agency for hotel bookings named as Inasra. Later, they renamed the platform to Stayzilla and pivoted to a hotel aggregator model in 2010.
- Funding: Stayzilla raised $33.5 Mn funding in three funding rounds – $500K in 2012, $20 Mn in 2015 and $13 Mn in 2016. It was backed by investors including Matrix Partners and Nexus Ventures.
- Shutdown Reason: In a Medium blogpost on February 23, 2017, co-founder Yogi announced the shutdown of the company. He described the shutdown reason as lack of local network effect, inability to expand quickly, and cost-effectively plus high costs and low revenues. Post-shutdown, however, the startup became a nationwide sensation in June 2017, when Yogendra Vasupal, CEO, and co-founder of Stayzilla, was arrested on charges of fraud for about $265K (INR 1.72 Cr) by Jigsaw Advertising Agency. Recently, the Supreme Court has given an interim order of status quo in an appeal against the insolvency proceedings of the homestay aggregator. The order thus freezes the insolvency resolution process (IRP) ordered by the National Company Law Tribunal (NCLT) in September this year.
- What Are Founders Upto: The founders’ LinkedIn profile still showcase the same designations. There is no further information on their current whereabouts.
- Launched in: November 2014
- Founders: Anisha Dhar, Nupur Khanna
- Category: Foodtech
- Headquarters: Gurugram
- Funding: The startup raised an undisclosed amount of Seed investment from MCube Capital Advisors Pvt Ltd in May 2016.
- Brief Overview: Eatonomist operated with a full-stack business model, wherein it controls kitchens and delivery services. It delivered lab-tested, calorie-counted gourmet meals.
- Shutdown Reason: The website currently says, “We will be back shortly.” But the reasons for shutdown are not clear. However, considering the impact 2016’s ‘winter year’ had on the foodtech market, and the investment involved in running a full-stack business model; working capital requirements and lack of fund raise could be the reasons for the shutdown. The last social media update was on September 9, 2016. We were not able to confirm the status of the startup, but it appeared to have shut down. In addition, the shutdown year cannot be assessed clearly.
- What Are Founders Upto: Anisha is surprisingly heading the Growth & Expansion – Launch team of UberEATS since April 2017 while Nupur’s status shows that she is still looking for opportunities.
- Launched in: 2015
- Founders: Aseem Khare, Abhiroop Medhekar, Ajay Bhatt, Amit Chahalia
- Headquarters: Mumbai
- Category: Hyperlocal Services
- Funding: The startup raised $5.7 Mn in two rounds of funding: $4.5 Mn in Series A (February 201) and $1.2 Mn in Seed Funding (April 2015).
- Brief Overview: Taskbob was started with a vision of creating happy households. Taskbob facilitated instant, high-quality home services for customers while driving higher productivity for servicemen. It further aimed to revolutionise home services in India by addressing three of the biggest customer pain points: delays, poor quality and lack of price transparency. It acquired rival Bengaluru-based Zepper.in in 2016.
- Shutdown Reason: On the company’s Facebook page, Taskbob announced its shutdown on January 19, 2017. Inability to scale itself and achieve profitability, due to the low margins in the business and the tough external market was given the key reasons for this startup shutdown.
- What Are Founders Upto: Abhiroop is now AVP at SAIF Partners. In May 2017, Aseem joined Adonis Electronics as CEO. While Ajay seems to get associated with Udacity, Amit’s status on his LinkedIn profile remained intact as TaskBob co-founder.
- Launched in: 2011
- Founder(s): Vikram Chopra, Mehul Agrawal, Vaibhav Aggarwal
- Category: Online Furniture
- Headquarters: Gurugram
- Funding: Fabfurnish raised $30 Mn in three rounds of funding, since its inception. In March 2017, Fabfurnish was also said to be in talks to raise a $50 Mn funding round.
- Brief Overview: Fabfurnish acted as a dedicated online shopping destination for furniture and homeware with a diverse range of products. In September 2015, Fabfurnish also revamped its business model by evolving itself into a content-driven platform for discovery and sale of curated home products. Later, owing to a cash crunch and inability to raise more funds, Kishore Biyani-led Future Group acquired FabFurnish for $2.25 Mn in April 2016 in an all-cash deal, a much lower valuation.
- Shutdown Reason: Fabfurnish was said to draw curtains in April 2017 as the acquirer Future Group was not able to merge Fabfurnish with its own online furniture offering HomeTown as per the plan. Thus, it was decided to shutdown Fabfurnish in order to focus only on one brand. Post-shutdown, about 50% of the workforce of FabFurnish has been let go while others are being adjusted within the Future Group.
- What Are Founders Upto: Vaibhav Aggarwal had quit the company in 2014 to pursue his own venture FabHotels.com. The remaining two founders also quit in July 2015. The information about the current status of other two co-founders could not be assessed. Ankita Dabas Kohli replaced the founding duos as CEO of Fabfurnish.com in September 2015. Post Fabfurnish shutdown, she is now running two platforms – Imperial Knots and Furnspace Pvt. Ltd as co-founder.
- Launched in: 2015
- Founder(s): Riddhi Mittal, Abhishek Garg
- Category: Fintech
- Headquarters: Bengaluru
- Funding: In March 2016, Finomena raised an undisclosed amount of funding from Matrix Partners India, Kaushal Aggarwal, Harshvardhan Chamria and others.
- Brief Overview: Finomena uses to apply alternate data sources and proprietary algorithms to evaluate credit-worthiness of borrowers. It used to facilitate small-ticket loans to students and young professionals for buying electronic devices and appliances. Besides, it also enabled borrowers to purchase high-value phones, laptops, and other consumer electronics online by opting for easy installments or financing options.
- Shutdown Reason: Finomena shut down its operations in August 2017 due to lack of funding, high cash burn rate, and the inability to raise the follow-on funding round. As per reports, there were two buyout offers too which did not materialised. The startup is no longer accepting new users on its platform.
- What Are Founders Upto:The founders’ LinkedIn profile still showcase the same designations. There is no further information on their current whereabouts. An email sent to Riddhi did not elicit any response till the time of publication.
- Launched in: 2013
- Founder(s): Mohsin Dingankar, Animesh Choudhary, Harsha Nallur
- Category: Budget Hotels
- Headquarters: Mumbai
- Funding: It had raised the undisclosed amount of seed funding led by 10 angel investors associated with Venture Nursery. The list included people like Amit and Arihant Patni, Bharat Banka and Shravan Shroff.
- Brief Overview: HotelsAroundYou was a last minute hotel booking platform. It featured limited location-based hotels and also ensures that users get the day’s best price for a hotel.
- Shutdown Reason: The company closed its operations amidst funding crunch and the inability to raise the follow-up round after the seed funding round.
- What Are Founders Upto: Post-shutdown, while Nallur moved on to restaurant listing platform Zomato as assistant vice president of global growth, Dingankar is now the product manager at Sharjah-based premium travel firm Musafir.com. While Choudhary is now part of a Mumbai-based brand engagement firm Studio Incandescence, which he founded.
- Launched in: 2014
- Founder(s): Rohini Chakravarthy, Anuja Ranjane
- Category: Ecommerce
- Headquarters: Bengaluru
- Funding: Inksedge had secured $1.5 Mn (INR 9 Cr) in December 2014 from NEA, Pinnacle Ventures and Milliways Ventures in December 2014. The round also saw participation from Vuclip founder and CEO Nickhil Jakatdar and Silicon Valley tech executive Gokul Rajaram.
- Brief Overview: The startup used to run an online portal for stationery and personalised cards. The ecommerce platform offered personalised cards for various occasions like weddings, holidays and birthdays, and also sold stationery. Users could personalise cards according to their tastes like size, occasion, colour, and the number of photos to be printed on it.
- Shutdown Reason: The startup shutdown its services in mid-2017 owing to a cash crunch and inability to raise the follow-on funding round.
- What Are Founders Upto: As per Rohini’s LinkedIn, she is still associated with the venture. But Anuja Ranjane, the other co-founder, moved to Walmart’s global ecommerce division as the senior product manager in February but she was part of the venture till April.
- Launched in: 2012
- Founder(s): Alexander Souter, Saptarshi Nath
- Category: Refurbished Ecommerce
- Headquarters: Gurugram
- Funding: Overcart had raised $3 Mn from JSW Ventures, Omidyar Network, Sattva Capital and Venture Works in July 2016. Previously, the company had raised an undisclosed amount of funding led by K Ganesh’s GrowthStory, with follow-on investment from the GSF Superangels network in June 2014. The round saw the participation of Dinesh Agarwal, Aloke Bajpai, Jonathan Bill, Rajesh Sawhney, Rishab Malik and Tara Bhargava. And prior to that, Overcart had received seed funding worth $25K from GSF, while being part of the accelerator’s first startup batch in October 2012.
- Brief Overview: Overcart was an ecommerce marketplace for over-stock, unboxed, refurbished, and pre-owned products.
- Shutdown Reason: The website is not available anymore and of a team of 126 members, many were found to be actively looking for open job positions at the time of shutdown. The LinkedIn status of many of its employees’ has been changed now. Initially, in November 2017, the company posted a notice stating that it will only cater to bulk orders, however, consumer complaints about not receiving the product were also seen rising post that. The dissatisfied consumers and the overall low product quality have been termed as the reason of startup shutdown. The last posts on both its Facebook page and Twitter account were on September 13, following which the only activity on these platforms has been limited to addressing customer complaints.
- What Are Founders Upto: The founders; LinkedIn profile still showcase the same designations as for Overcart. There is no further information on their current whereabouts. A message sent over LinkedIn to Alexander and an email sent to Saptrishi did not elicit any response till the time of publication.
- Launched in: 2014
- Founders: Ishaan Sethi, Harshil Gurha, Jitesh Luthra
- Headquarters: Delhi
- Category: SaaS
- Brief Overview: Prophesee empowered brands with data-driven insights that allow managers to compare and analyse digital campaigns and execute directly from the platform. The startup catered to the need of building audience listening and community management capabilities. Prophesee was also engaged in testing new methods of measuring consumer engagement and behaviors.
- Funding: The startup raised $516K funding in an angel round from Indian Angel Network (IAN), Stanford Angels and Entrepreneurs India (SA&E India). Ajay Lavakare, Bikky Khosla, and Satveer Thakral were the lead investors in the company.
- Shutdown Reason: The website is not available. Last update on social media was on January 31, 2017. The startup finally shut down its operations in April 2017, as revealed from Ishaan’s LinkedIn profile.
- What Are Founders Upto: As per Ishann’s LinkedIn profile, he is now pursuing another venture Delta, which is said to be the first LGBT Community & Networking app in India. Harshil and Jitesh, on the other hand, has joined Culture Machine as Senior Product Manager and Business Development & Growth Head-Technology respectively.
- Launched in: 2014
- Founder(s): Abhishek Negi, Ashish Rajput, Siddhant Matre
- Category: Intercity Cab Aggregator
- Headquarters: Gurugram
- Funding: They first raised a seed round of $350K from Unicorn India Ventures in September 2015. Later, in January 2016, Roder raised about $250K (INR 1.6 Cr.) in a seed round funding from Unicorn India Ventures.
- Brief Overview: Roder, earlier known as Insta Cabs it used to offer inter-city on-demand cabs. The startup was aimed towards revolutionising the travel between cities by offering cabs at almost half the fare than market rates for one-way journeys.
- Shutdown Reason: As per reports, Roder closed its operations in September 2017 due to rising customer acquisition costs and low repeat rate for outstation travel.
- What Are Founders Upto: Post-shutdown of Roder, Abhishek is now leading an end to end agritech startup KrishiGo (since July 2017), Ashish is leading an AI-driven sales platform Flinkhub as CEO and Cofounder (since March 2017), while Siddhant is now VP Strategy & Sales at Pharmarack Technologies Pvt Ltd.(since July 2017).
- Launched in: 2015
- Founders: Suresh John
- Headquarters: Bengaluru
- Category: Online hotel booking
- Brief Overview: Roomstonite was a last-minute hotel booking app. It allowed users to make hotel bookings instantly or a maximum three days in advance. It also helped sellers in selling unsold rooms.
- Funding: The startup raised $1.5 Mn from a group of undisclosed investors in December 2015.
- Shutdown Reason: Lack of funds was the prime reason for shut down, as per a VCCircle report. The app is available on Google Play Store but is not functional. The website is also not operational anymore The last social media update was on August 16, 2016. We were not able to confirm the status of the startup, but it appeared to have shut down. In addition, the shutdown year cannot be assessed clearly.
- What Are Founders Upto: Suresh is continuing with his earlier endeavour IDSNext & RezNext as co-founder and Executive Chairman.
- Launched In: Relaunched in 2015
- Founders: Registered as a separate entity for Snapdeal, acquired in 2013
- Headquarters: Chennai
- Category: Affiliate marketplace
- Funding: It was backed by Sequoia Capital and angel investor Sashi Reddi. In July 2015, Snapdeal acquired Shopo and in September 2015, Snapdeal also announced to invest $100 Mn in Shopo over a period of two years.
- Brief Overview: Shopo was an online marketplace where one can find contemporary and traditional Indian designers, handcrafted and homemade stuff, and their creators. It was founded by Theyagarajan S. Snapdeal later relaunched it as a zero-commission marketplace which allowed small sellers to chat, buy, and sell on the platform.
- Shutdown Reason: The shutdown announcement came in February 2017. Snapdeal has been suffering from losses and is currently on the verge of getting acquired/ merged with Flipkart. The Shopo service was shut down in the wake of cutting costs and conserving cash. The last social media update was on March 9, 2016.
- What Are Founders Upto: Theyagarajan S was AVP Product Management at JusPay till December 2016. Post that there has been no update on his social media profile. Also, Snapdeal founders Kunal Bahl and Rohit Bansal are now busy in upgrading the current business model to Snapdeal 2.0.
- Launched in: 2015
- Founders: Sharique Khan, Monajeet Sinha
- Headquarters: Gurugram
- Category: Fintech
- Funding: The startup raised an undisclosed amount of Seed funding from Anand Chandrasekaran, Rajesh Sawhney, Anupam Mittal, Dinesh Agarwal and Gaurav Gupta in December 2015.
- Brief Overview: Splitkart was a mobile app that helped users in splitting the bill and plan group outings. The app also showcased deals from nearby restaurants and pubs and included social media sharing options.
- Shutdown Reason: The shutdown reasons are not clear yet. As per a VCCircle report, the founders are busy upgrading the site, but did not share any specific timeline for restarting operations. At the moment, the app is not available on Google Play Store or iOS store. The website too is not operational. The last social media update was on December 21, 2016. We were not able to confirm the status of the startup, but it appears to have shut down.
- What Are Founders Upto: The LinkedIn profile status of Sharique remains intact. However, Monajeet is now positioned as VP-Product & Marketing at FastFox.com.
- Launched In: 2015
- Founders: Satish Gupta, Ankur Majumder, Siddharth Arora
- Headquarters: Delhi
- Category: B2B logistics
- Funding: It raised $155K (INR 1 Cr) in Seed funding from a group of undisclosed investors.
- Brief Overview: Turant Delivery was an intra-city logistics company which utilises its technology platform to help customers book and monitor their deliveries on a daily basis. With the help of a zone-based algorithm, it claimed to provide services at less than 15% less. The B2B model was a pivot from an earlier B2C model. It was operational in Delhi, Mumbai, Bengaluru, Kolkata, and Surat.
- Shutdown Reason: Logistics has been cited as a business which requires large working capital. The company was unable to raise funds and burning money blindly was not advisable. The last social media update was on March 28, 2016.
- What Are Founders Upto: The founder trio has already placed themselves in leading positions in different companies. Satish is now posted as Head-Online Tailoring at Raymond Limited, Arjun has joined Uber as Operations and Logistics Manager and Siddharth is associated with RateGain as Senior Product Manager.
- Launched in: 2014
- Founder(s): Alok Jain, Abhimanyu Maheshwari
- Category: Foodtech
- Headquarters: Gurugram
- Funding: The startup had raised $2 Mn funding in December 2015 led by Unilazer Ventures, Orios Venture Partners and Steven Lurie, a Valley-based investor. Prior to this round, the company had raised $1 Mn in February 2015.
- Brief Overview: Yumist used to serve home-style cooked meals prepared in its own kitchen. The aim was to build the go-to food brand for the daily meals market in India, a fragmented market serviced largely by unorganised players offering sub-standard food.
- Shutdown Reason: According to the founders, failure to raise the kind of capital that this business required while staying true to the customer problem dig the hole for them. In hindsight, there’s a bunch of internal and external factors that led them to this dead end. As founders stated in a blog post, “committing to a high growth, high burn model just because prospective investors wanted to see that back in 2015, or taking a tad bit too long to find the right business model, we made our mistakes. We learnt from these mistakes and recovered fast, but maybe not too fast.”
- What Are Founders Upto: Post-shutdown, while Alok is still contemplating his next move, Abhimanyu has continued the entrepreneurial journey with his six-year-old company Zing Restaurants.
Kaaryah
- Launched In: 2014
- Founder(s): Nidhi Agarwal
- Category: Ecommerce, Private Label
- Headquarters: Delhi NCR
- Funding: Kaaryah raised $499.5K (INR 3.2 Cr) in funding from SAHA. In December 2015, Kaaryah had secured an undisclosed amount in Pre-Series A round of funding from former Infosys veteran TV Mohandas Pai and the SAHA Fund. Kaaryah had also raised an undisclosed amount from Ratan Tata
- Brief Overview: Kaaryah was a technology-enabled and data analytics-driven apparel brand that catered to women’s western wear category in India. During the three years since its inception, the startup provided the trendy western outfit for professional women.
- Shutdown Reason: As per the founder, the company was trying to raise funds for the last 18 months.
- What Are Founders Upto: Nidhi is currently working as a consultant for startups that are looking to build their own brands.
Besides these Indian startups, a couple of more startup shutdowns were reported. MeddyMart, Zafraa, Surpluss and Guncha are few more Indian startups that reported shutdown of their business in 2017. And then there was Chennai-based Genie who entered the startup Shutdowns list for 2017 earlier this year, however, the startup made a comeback and resumed its operations after securing $250K in funding.
Apart from these, abof.com (aka – all about fashion), an online fashion platform for apparel, footwear and accessories and a subsidiary of Fortune 500 company Aditya Birla Group also reported a shutdown in 2017.
Indian Startups That Shutdown Their Service In 2017
Apart from the above startup shutdowns, there were many Indian startups which pull back a part of their operations in order to focus on their core operations and continue to survive amidst adversities.
- Launched in: 2012
- Founders: Saurav Kumar, Abhilekh Agarwal, Aakash Jain
- Headquarters: Delhi
- Category: Mobile technology
- Funding: It raised $7.7 Mn in Seed funding from Tiger Global and Flipkart in October 2015.
- Brief Overview: It is a technology firm focussed on enhancing the user experience across multiple devices and platforms using software and IoT. Cube26 customised the Android OS and developed varied applications for OEMs to give them a competitive edge. It is currently building a platform between local service providers and smartphone users through their local app and game store to enable product led monetisation.
- Shutdown Reason: Cube26 shutdown its IoT business, which also led to several job cuts. It will now focus only on its software and services business.
- Launched in: 2015
- Founder(s): Rajiv Subramanian, Ashrujit Mohanty
- Category: Foodtech
- Headquarters: Bengaluru
- Brief Overview: EatFresh was a marketplace offering Indian and international cuisine on a daily rotating menu prepared by top chefs. Operated by Chennai-based Ubiquitous Foods, EatFresh was operating almost 50 outlets in Chennai and Bengaluru.
- Funding: EatFresh raised an undisclosed amount of funding from Kalaari Capital in December 2015.
- Shutdown Reason: The startup shutdown its food delivery service in January 2017. As per an update on its website, EatFresh will no longer operate its on-demand meal delivery service, and will only cater to party or bulk orders in the future. As shared by Rajiv with Inc42, the company operates two brands Ovenfresh and Eatfresh, focussed on bakery products and meals, respectively. While both businesses have profitable unit economics, Ovenfresh generates units generate 40% EBITDA compared to 20% EBITDA at Eatfresh units. As a result, they have decided to focus their capital allocation towards the Ovenfresh brand which at that point of time generated 90% of their revenues.
- Launched in: 2014
- Founder(s): Akshat Ghiya
- Category: Reverse Logistics
- Headquarters: New Delhi
- Brief Overview: Karma Recycling, was an online reverse logistics player for electronic products focused on selling and buying iPhones. It is now engaged as a Government of India authorized clean technology company that provides an easy, fast, and safe way for consumers and businesses to get rid of useless electronics such as smartphones, tablets and laptops. For retailers, Karma develops technology solutions to effectively manage product take-back and recycling programs across India.
- Funding: It has raised about USD 500K from Infuse Ventures and the ERM Foundation.
- Shutdown Reason: It has now shrunk the consumer appliances business which included peer-to-peer (C2C) selling and provides individuals with paid packaging and shipping options to easily dispose of their useless gadgets. The reason for pulling back operations is not clear.
- Launched In: 2014
- Founders: Registered as a separate entity for IndiaMART
- Headquarters: Noida
- Category: B2B retail and B2B wholesale
- Funding: It is backed by Intel Capital and Bennett, Coleman & Company Ltd. The startup leverages funds from IndiaMART
- Brief Overview: The company was incorporated in 2014 and had two kinds of businesses – B2B retail and B2B wholesale. The company shutdown its B2B retail wing and continued with the other. The company also laid off 50% of its staff as part of the shutdown exercise.
- Shutdown Reason: The reasons cited for the shutdown were flagging sales and underperformance following the government’s demonetisation move. Also, unit economics in the segment was also quite low, according to the founders.
Editor’s Note
In last few years, the term “startup shutdowns” has become synonymous with startup launch. However, in many aspects, the startup shutdowns reported in 2017 was much less tangled than the last year. While in 2016, many startup shutdowns came in as a surprise, 2017 hinted the demise well before in the quarterly reports of the majority of startups, yet some like Stayzilla, Taskbob was a shocker for many!
The Indian startups are currently going through an interesting phase. On one hand, the Indian government is busy framing and changing policies for Indian startups in order to make the benefits reach out to the maximum startups. While, on the other hand, Indian startups are juggling to bootstrap considering the nuances of outside funding and trying to look for mentors and leverage their internal resources to scale ahead.
Also, the established companies are now trying to opt for an IPO route rather than raise the follow-on funding rounds and liquidate their shareholding in the company.
Thus, the Indian startups and the ecosystem as a whole is aggressively trying to break off the traditional boundaries and write entirely new chapters.
With fall in the number of Indian startups founded this year, it is believed that only sustainable and serious business will be launched rather than the ones build out of following the crowd. Thus, going ahead, in 2018, we expect the current number of startup shutdowns to come down further and bolster the way for upcoming Indian startups with a strong foundation and companies with greater profitability guiding their way as inspiration.
While these were the startup shutdowns reported by Indian startups in 2017. We have many more interesting stories in our bank for our 2017 In Review Series, stay tuned for the next story – High profile acquisitions reported by Indian startups in 2017.
Update 1: 20 December, 8 PM
The earlier version of the story had listed Fella Homes as one of the startups that shut shop this year. We have removed it from the list, we would like to apologise to the founders and our readers for the confusion it might have caused.