Over the course of 2017, the startup ecosystem in India has seen numerous new entrants and exits. While the government has launched the Startup India initiative to promote and nurture startups, and there were numerous incubators and mentors available, 2017 witnessed a number of startups being compelled to shut shop. Although each startup has a different reason for its closure, certain glaring similarities cannot be overlooked. The inability to raise funds, underdeveloped markets for product offerings, and tough competition from well-funded players are a few of the common reasons for startups winding up business. As 2017 draws to a close, we take a look at 20 startups that shut down in the year that was:

1. Cardback

The Delhi based fin-tech startup founded in 2012, was an online platform for loyalty cardholders. The platform would recommend the best credit/debit card to be used for a particular transaction based on several factors such as card and wallet features, ongoing offers, cash-backs, discounts, surcharge waivers, conversion of reward points using cards and fee structure. Co–founded by Nidhi Gurnani and Nikhil Wason, the main reasons cited for the shutdown were the inability to raise funds and the lack of demand for the product. The company however had successfully raised $170,000 during its five years of operation from well-known angel investors such as Rajan Anandan, Sunil Kalra, and Alok Mittal.

“The market we were targeting was not mature enough in India as most people in the country do not have multiple credit cards,” Gurnani had said while announcing the shutting down of operations. The company did try to move headquarters to Singapore, a country where multiple credit card culture exists. However, the plans failed when the investors had a fallout. Subsequently, the founders decided to stop operations altogether. The co-founders have now gone their separate ways.

2. Stayzilla

The shutting down of Chennai–based, Stayzilla, in February came as a shocker to the startup community. The startup was founded in 2005 titled Inasra Technologies as an online travel agency for hotel booking. In 2010, the founders, namely Yogendra Vasupal, Rupal Yogendra, and Sachit Singhi, renamed the platform as Stayzilla, and moved on to a hotel aggregator model.

Over the years, the company received funding in three rounds. In 2012, the company raised $500,000; in 2015, it raised $20 million; and in 2016, it raised $13 million, bringing the total to $33.5 million in funding. The main backers of the startup were venture capitalists, Matrix Partners and Nexus Ventures. Over the years, the company did face a number of problems which were visible when Stayzilla ran losses of $14 million against a total revenue of $2 million in 2016.

Investors became cautious and in a blog post in 2017, co-founder Yogendra Vasupal announced that the company was shutting operations and would soon reboot under a different business model. The startup also courted controversy when the company was taken to court for fraud and non-payment of dues by Jigsaw Advertising Agency and co-founder Yogendra Vasupal was also arrested.

3. Taskbob

The Mumbai-based home services announced it was shutting operations in January. Its inability to build the desired profitability and scalability, low margins in the business, and a tough external market were among the reasons for the shutdown.

The startup was founded in December 2014 by Aseem Khare, Abhiroop Medhekar, and Amit Chahalia. It aimed to revolutionise the home services industry by providing customers with instant, high-quality home services while ensuring higher productivity for the servicemen.

The company had raised of $5 million in funding from IvyCap Ventures and Orios Ventures Partners. It had gone on to acquire the Bengaluru-based rival Zepper, and had competed with other players in the home services segment such as UrbanClap and HouseJoy.

4. Yumist

Gurgaon-based cloud kitchen company, Yumist, shut down in October 2017. The company decided to close shop after it failed to raise a subsequent round of funding. The company was founded by ex-Zomato Chief Marketing Officer, Alok Jain, in 2014 and had successfully raised funding of approximately $3 million from investors such as Unilever Ventures and Orios Venture Partners. The company provided on-demand meals prepared in their own kitchens. The startup focused on servicing the Delhi-NCR region. While announcing the shutting down of the company in a blog post on their website, the founder attributed the failure to a number of internal and external factors such as a premature launch in a second city, commitment to high growth, employing a high burn model, and the reluctance of investors to invest due to the 2016 slump in the food tech market.

5. Eatonomist

The Gurgoan-based online food delivery startup was founded in 2014 by Anisha Dhar and Nupur Khanna. The company followed a full stack business model wherein it controlled the kitchens as well as the delivery services, hence delivering meals prepared in its own kitchens. The startup, operated by Fitmeal Solutions Pvt. Ltd, shuttered the doors less than a year after raising funding, posting a message on its website saying, “We’ll be back shortly.” In May 2016, the company had raised an undisclosed amount in investments from MCube Capital Advisors Pvt. Ltd. Co-founder Anisha Dhar went on to join newly launched UberEats. This was the second significant shutdown in the food delivery segment. The sector has been seeing increasing competition from top players such as Ola FoodPanda, Zomato, Swiggy, Google’s Areo, and UberEats for market share while the relatively newer entries fight for a seat at the table.

6. RoomsTonite

The Bengaluru-based hotel room booking app, RoomsTonite, announced that it was closing operations just a few days after the Stayzilla. According to reports, a much-needed investment had failed to come through and subsequently the company faced a fund crunch due to which RoomsTonite was ultimately shut down.

The startup was founded in 2014 by IDS Solutions Chairman Suresh John and provided hotel deals to its customers. It would allow users to book hotel rooms for up to 3 days in advance. RoomsTonite e-bookings would provide last minute hotel room booking facilities in over 275 cities, thus, catering to last minute travellers.

The startup had successfully raised $1.5 million in angel funding from well-known investors like Venkat Vardhan, promoter of DNA Networks, Mohammed Bin Abdul Rehman Al Khalifa, Chairman of Caravan Group, Ralph Berezan of Berezan Group, and Balamurli Krishna of IDS Software.

7. Turant Delivery

The Delhi-based hyper logistics startup had to shut down operations owing to a fund crunch and the inability to raise the required capital which ultimately rendered the business nonviable. The startup was run by Always Turant Delivery Pvt. Ltd and was in talks to raise about $2 million in a pre-Series A round of funding when it had to shut operations. The high working capital requirements of the business were stated as the main reason for the shutdown. The company had been co-founded by ISB alumni Satish Gupta, Ankur Majumder, and Siddharth Arora and had raised over Rs 1 crore in seed investments. It employed a zone-based pricing algorithm, thereby providing SMEs with rates that it claimed were 15% less than the market rates, and helped truck owners manage inventory. However, the company’s B2B business wasn’t its original business; rather it was a pivot from its initial B2C business. The company operated in Mumbai, Bengaluru, Delhi, and Surat at the time of shutting down.

The on-demand delivery space in the country has a significant number of players; however, the results have been mixed with most of them still trying to find the right business model for themselves.

8. Splitkart

The Gurgoan-based startup which operated an app allowing users to split bills and plan group outings had to cease operations due to the company undergoing technical upgrades, according to the co-founder. The company was founded in 2015 by Sharique Khan and Monojeet Sinha. The mobile application would allow users to split bills and acted as a platform to discover deals in nearby restaurants and pubs. The app also included social media sharing options for group planning. The company had secured an undisclosed amount as seed funding in December 2015 from well-known investors such as Anand Chandrasekaran (former Product Head, Snapdeal), Rajesh Sawhney (Founder, GSF India), Anupam Mittal (Executive, People Group), Dinesh Agarwal (IndiaMART CEO), and Gaurav Gupta (Managing Director, Macquarie Capital India).

The personal finance and expense management space in India also has well-funded players like the Bengaluru-based personal finance app, MoneyView and Pune-based expense management app, Walnut.

9. Kaaryah

The Gurugram-based startup had to shut down operations due to insufficient funds. The company was launched in 2014 by Nidhi Agarwal. It was a technology enabled and data analytics driven apparel brand that catered to women’s western wear needs in India and provided trendy western outfits for professional Indian women based on body type. The company’s most prominent backer was Ratan Tata. Kaaryah had also secured an undisclosed amount in funding from former Infosys veteran, TV Mohandas Pai, and the SAHA Fund.

10. OverCart

The startup was an e-commerce market place for over stock, unboxed, refurbished and pre-owned products. Although initially the company stated on its website that it only catered to bulk orders, however, there were numerous complaints from dissatisfied customers. That along with the overall low product quality have been attributed to cause the ceasing of operations. The company was founded in 2012 by Alexander Souter and Saptarshi Nath.

11. Finomena

This Bengaluru-based startup aimed to provide small loans to students and other young working professionals who did not possess the credit history needed to secure traditional loans. The company used proprietary algorithms to determine the credit worthiness of a prospective borrower. Finomena would charge a commission over the interest earned on the loaned amounts from banks and non-banking financial companies (NBFCs).  They would also get a commission from online portals when sales were generated through their platform.

The company was founded by Abhishek Garg and Riddhi Mittal. The startup had raised funding from Matrix Partners and 10 other investors including Kaushal Aggarwal, MD and co-founder, Avendus, Harshvardhan Chamria, Magma FinCorp Limited, and InMobi co-founder Abhay Singhal. While the reasons for the shutdown remain unknown, it can be attributed to the fact that the online lending market is now a crowded one with a number of strongly funded players.

12. PropheSee

The Delhi–based data analytics startup officially shut down operations in April 2017; however, the exact reason for the same remains unknown. The news of the shutdown broke when the LinkedIn profile of one of the founders stated so. The startup was founded in 2014 by Ishaan Sethi, Harshil Gupta, and Jitesh Luthra. The company provided big data Software as a Service (SaaS) platform, which allowed brands to leverage their digital presence by developing doable insights, predicting outcomes so as to optimize for success. This was done by aggregating data across various streams into one dashboard, rather than individually examining them and providing brands with a comprehensive view of where exactly they stand in the market. The startup had raised $516,000 in angel funding from the Indian Angel Network (IAN), Stanford Angels, and Entrepreneurs India (SA&E India). Ajay Lavakare, Bikky Khosla, and Satveer Thakral were among the leading investors of the startup.

13. abof.com

This website was Aditya Birla Group’s flagship e-commerce fashion website.  The company had to shut down operations due to stiff competition from heavy discounting models of rivals such as Flipkart and Amazon. Abof (an acronym for Aditya Birla Online Fashion) was launched in October 2015, and is the second e-commerce venture of the group that bit the dust after Trendin.com had to be wound up last year due to the similar reasons. The website was launched by the group as one that did not offer discounts but rather sold a limited and fashionable range of merchandise. However, a year into the business, more than half the products on the website was discounted, thereby resembling any other e commerce website. According to sources, the brand Skult, which was exclusively available on abof.com, will be absorbed by the group’s apparel division, namely Madura Fashion and Lifestyle. The precarious nature of e-commerce businesses and the heavy competition in the market were cited as reasons for ceasing operations.

14. Dial A Celeb

Dial A Celeb was a mobile application promising to connect fans with their favourite celebrities for short video chats. It also offered a service to book celebrities for events and sell celebrity autographed merchandise. However, the company has become inactive and the last update on its Facebook page was posted on May 1. There have been a few celebrity engagement start-ups like HookAStar and 500sh, however, most celebrities tend to have their own personally stylized apps. The trend, which was predominantly in Hollywood, has recently been catching on in Bollywood as well. Actors like Alia Bhatt and Sonam Kapoor have started making their own apps. Furthermore, Escapex, a New York based startup that creates white label apps for celebrities has started to make inroads in India as well, thereby, rendering startups like Dial A Celeb obsolete.

15. Surpluss

This online retail store for refurbished electronics had to shut down due to hits the business took during demonetisation. The employment of the B2C inventory model and high running costs were stated as the main reasons for ceasing operations. The startup was founded in 2014 by Saurabh Rai and Tarun Bhardwaj and sold refurbished and surplus products ranging from mobile phones to fashion apparel. The company was selling refurbished items from brands like Samsung, LG, Xiaomi, OnePlus, HTC, Alcatel and Xolo. However, Surpluss wasn’t the only company facing these problems; other companies in the reverse logistics and re-commerce segment in the country were facing problems in selling refurbished products such as consumer durables. The largest player in the online reverse logistics space in India, namely GreenDust, had its business take a big hit post demonetisation. Businesses in this segment is also facing competition from electronic bazaars like Delhi’s Gaffar Market and Mumbai’s Linking Road. In addition to this, often people shopping on these sites ask for warranties, which is something the players are unable to provide. This was the second startup in this market to shut down operations after OverCart ceased operations as well.

16. Shopo

This was a Snapdeal-owned online market space for handicraft products. The company was shut down in February 2017 after nearly one and a half years of operations, as Snapdeal aggressively moved to raise funds and cut costs amid an intense battle with Flipkart and Amazon. Snapdeal had previously shut down its premium and luxury fashion goods platform, Exclusively.com. Snapdeal acquired Shopo in 2013, which was platform that enabled SMEs to chat, buy and sell on the platform with a zero commission and zero fees policy. In 2015, Snapdeal had announced that it would be investing $100 million in the handicrafts market space over the course of the next two years.  The announcement regarding the shutdown was made via a blog post.

17. HotelsAroundYou

The Mumbai-based startup, Instant Hotels Around You Pvt Ltd, which operated the online website; HotelsAroundYou, had reportedly become defunct in 2016, although the timeline for the same remains unclear. The website allowed people to make last minute bookings.  According to reports, the company had to shut down as it was unable to raise the much needed follow on funding. HotelsAroundYou had last raised an undisclosed amount in 2014, in seed funding from Venture Nursery, an angel-backed startup accelerator. The company had been set up in 2013 and its website provided customers with two options when it came to booking hotels, namely ‘transit stay hotels’ during the day and ‘night use hotels’.  The company functioned on the principle of unsold inventory, wherein the hotels offered unsold rooms to the company at a discount. Till 2015, it seems the company was operational in Pune, Mumbai and Delhi. This wasn’t the only startup to bite the dust though. Both Stayzilla and RoomsTonite were among the companies that had to shut shop this year.

18. Tolexo

This retail B2B market place had to shut down due to flagging sales and under performance post-demonetisation. This move came after the company had already laid off 50% of its workforce at the start of the year. The company was registered as a separate entity in 2014 as an online retail platform for the Noida-based IndiaMART Pvt. Ltd and was backed by Intel Capital and Bennett and Coleman & Company Ltd. The startup operated two kinds of businesses: B2B Retail and B2B Wholesale. The startup provided a consumer shopping experience for the largest collection of products needed by factories, businesses, offices, and laboratories.

19. Inksedge

This startup offered customised cards suited to specific occasions like weddings, birthday parties Diwali or New Year, with the cards being delivered to the customer’s doorstep. The company also had offices located in MountainView, California, and Bengaluru. It was backed by the US-based venture funds New Enterprise Associates, Pinnacle ventures, and Milliways Ventures, and competed with global players like Evite and TinyPrints for a share in the $2 billion global card industry. The startup was founded by Rohini Chakravarthy (CEO), Anuja Ranjane (co-founder), Swathi Kulkarni (General Manager, India), and Usha Seetharaman (Chief of Engineering). The startup was founded in December 2014 and had raised $ 15 million in seed funding. Although, why the startup chose to halt services remains unclear, the decision was reportedly made when the company failed to raise the required follow on funding to continue operations.

20. Eatfresh

The Bengaluru-based food-tech startup shut down its on-demand food delivery service. It would, however, continue to cater to bulk orders, as per the statement released on their website. The startup was founded in 2015 by Rajiv Subramanian and Ashrujit Mohanty, and was a marketplace offering its customers a daily rotating menu consisting of Indian and international cuisines. The startup was being operated by Chennai-based Ubiquitous Foods, and had approximately 50 outlets across Chennai and Bengaluru. The company had raised an undisclosed amount in seed funding from Kalaari Capital in December 2015. The startup was not the first one in the food tech segment to shut down this year. Major shutdowns of the year included Yumist and Eatonomist. Furthermore, the food tech space has seen growing competition from the major players like Zomato, Swiggy and FoodPanda, among others. EatFresh stated that since its second brand, OvenFresh, was generating over 90% of its revenues, they had decided to shut down Eatfresh in order to focus all their resources to OvenFresh.

(Picture courtesy: cityofpasadena.net)