A good number of startups are launched with some capital, good concepts and a great vision. Only a few of the top startup companies to survive the stiff market competition! With Covid-19 striking panic across the globe right from the start of 2020, it was miserable for most startups. Businesses were forced to close to stop the further spread of this disease, thus making startups gasp for breath.
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The pandemic saw such companies making increased offerings to retain existing and attract new customers. Survival of the business became more important than making profits. But several of them simply fell prey to the pandemic and have to close down their shutters. Some had already experience cracks in their business model, with the pandemic striking the last nail in the coffin. Startups shutdown rather became common due to lack of finance, poor economy and bad market.
Top startups shutdown
- Essential (2017-2020): This Playground-backed startup managed to raise an amount of $330 million to start the business. It was trying to enter an already oversaturated and mature market. It also boasted of having employed the top industry executives combined with authentic innovative ideas. It also had outlined a very clearly chalked out 10-year plan for becoming the next industry giant. It did provide the world with a promising handset. But it never managed to supply a connected home hub. There were several reasons to experience startup fails. Some of them were allegations involving sexual misconduct, broader marketing issues and timing.
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- Atrium (2017-2020): It raised a working capital of $75 million. This legal tech 100- person startup is the idea of Justin Kan. But it had to close down business last March. This is because it failed to come up with an alternative plan to tackle the arduous systems followed by law firms. Investors were also given back some funding amount of $75.5 million including Andreessen Horowitz. A month earlier, this platform had laid off its in-house lawyers to become a SaaS play. Such startup fails to showcase how unprofitable and tough it is to disrupt a complicated, traditional system. Only three years earlier, it had announced to develop software meant exclusively for startups. This software was to be designed to navigate hiring, fundraising, collaboration with legal experts and acquisition deals.
- Hipmunk (2010-2020): This travel company started with a capital of $55 million and was established by Steve Huffman, Reddit Co-founder and Adam J. Goldstein. It gathered information on car rental, hotels and flights allowing users to contrast and compare prices without difficulty. However, it became one of the miserable startups shutdown after four years. Its closure, however, is not because of the pandemic. Rather, its site went dark officially before the lockdowns on 23rd January 2020.
- HubHaus (2016-2020): It was counted among the top startup companies that failed recently. It managed to raise a capital of $11.4 million and was established by Shruti Merchant. This housing rental platform had a strong belief that there will be a demand for adult dormitories in the future. It targeted mostly working professionals located in cities. However, with the failure of WeWork’s IPO, investors lost their interest. Thus, the start-up suffered setbacks trying to raise new funds. It was further hit when pandemic struck the world over hurting the overall rental market.
- IfOnly (2012-2020): It raised a venture capital of $51.4 million and a viable marketplace to hold exclusive events like ‘goat yoga’. But the pandemic created a mess leaving the startup on poor grounds. MasterCard, its earlier investor had acquired this startup last year. According to MasterCard, the company’s existing technology and team were part of the Priceless experience marketplace. Such a startup fails has provided Mastercard with an investment opportunity.
The above are a few of the top startup companies that suffered setbacks in 2020-21 and had to announce permanent closure.