Even in a non-hell yr, operating a profitable startup is an amazing carry. After the occasions of 2020, nonetheless, little question many already lean companies are hanging on by the pores and skin of their enamel. For each firm that noticed elevated curiosity of their choices in the course of the pandemic, there have been a number of that merely couldn’t make it via the end line.
We’ve put this record collectively for a number of years now. It’s not a enjoyable process, however it appears worthwhile to commemorate the startups which have closed up store over the previous 12 months. (A few of them have been acquired by bigger firms earlier than shutting down, however all of them started their life as startups, and it nonetheless felt worthwhile to mark the top of their tales.) It additionally presents a chance to look at these points from a little bit of distance to see if there are any broader takeaways for the group at massive.
This yr’s record is among the many most numerous we’ve accomplished, starting from customary smaller-name closures to massive blockbuster crashes like Quibi and Essential . For some, the pandemic was the ultimate nail within the coffin, however in lots of circumstances, cracks in enterprise fashions have been already beginning to floor properly earlier than COVID-19 floor the worldwide financial system to a screeching halt.
Whole Raised: $75 million
Atrium, a 100-person authorized tech startup based by Justin Kan, shut down in March after failing to search out an environment friendly approach to substitute the arduous programs of regulation companies. The startup even returned a few of its $75.5 million in funding to its buyers, together with Andreessen Horowitz.
The shutdown comes after the platform had pivoted simply months earlier, shedding in-house attorneys and turning right into a clearer SaaS play. Finally, Atrium’s failure exhibits how troublesome and unprofitable it may very well be to disrupt a standard and complex system.
The closure got here simply three years after it launched with the objective to construct software program for startups to navigate fundraising, hiring, acquisition offers and collaboration with their authorized workforce.
Whole Raised: $330 million
Huge plans, massive names and a boatload of cash ought to have been sufficient to purchase Important a prolonged runway. Positive, Important was coming into a mature and oversaturated market, however the Playground-backed startup was doing so with $330 million in funding, a workforce of high trade executives and a few genuinely revolutionary concepts.
After I spoke to the corporate at launch, an government outlined a 10-year plan to develop into a significant participant in each the cellular and good house classes. Finally, the corporate was capable of eke out slightly below three years of life after popping out of stealth. And whereas it did give the world a promising handset, its linked house hub by no means arrived.
Timing, broader advertising points and troubling allegations of sexual misconduct have been all contributing components that stopped Important’s massive plans lifeless of their tracks.
Whole Raised: $11.4 million
HubHaus, based by Shruti Service provider, was a long-term housing rental platform rooted within the perception that grownup dormitories would take off. The startup focused working professionals in cities, and raised solely round $11 million in identified enterprise capital. When it got here to elevating a Collection B, Service provider says the corporate struggled to shut and misplaced investor curiosity on account of WeWork’s failed IPO.
After then pivoting to a self-funded firm, HubHaus was simply discovering footing when the coronavirus pandemic arrived in the USA, drastically hurting the rental market (as proven by Airbnb’s public struggles, as properly). The housing firm finally determined to shut down in September, leaving landlords, members and distributors in limbo and bringing on a recent sweep of critique and controversy.
Reasonably priced housing continues to be a problem within the Bay Space, and HubHaus’s departure from the scene underscores this fact.
Whole Raised: $55 million
Hipmunk, based by Adam J. Goldstein and Reddit co-founder Steve Huffman, was one of many first journey aggregation platforms in the marketplace. The corporate put collectively info on flights, accommodations and automotive rental all into one place so customers may examine and distinction costs with ease.
The main target was sufficient for the platform to get acquired by Concur, however now after 4 years, the journey startup shut down. Notably, the journey startup’s closure wasn’t essentially tied to the coronavirus pandemic. The positioning formally went darkish on January 23, months earlier than lockdowns got here to the USA.
Whole Raised: $51.4 million
IfOnly had created a marketplaces of unique occasions — reminiscent of “goat yoga” — a enterprise that confronted apparent challenges in the course of the pandemic. The startup was really acquired by one in all its buyers, Mastercard, late final yr, however the acquisition wasn’t introduced till IfOnly revealed over the summer season that it was shutting down.
Mastercard additionally stated IfOnly’s workforce and know-how are nonetheless a part of its Priceless expertise market: “The IfOnly platform will proceed to assist advance our Priceless technique and our mixed workforce will probably be even higher positioned and geared up to ship unique experiences for cardholders globally.”
Whole Raised: $520,000
Microsoft shut down its Twitch competitor Mixer this yr, handing off its partnerships to Fb Gaming. The service had its roots within the software program big’s acquisition of Beam Interactive shortly after the startup won TechCrunch’s Startup Battlefield in 2016.
Earlier than giving up, Microsoft made some massive investments in Mixer’s success, most notably signing streaming superstars Ninja and Shroud to unique offers. (They grew to become free brokers after the shutdown.) Nevertheless, Microsoft’s gaming chief Phil Spencer stated the corporate suffered from beginning out “fairly far behind” the largest gamers within the streaming market.
Whole Raised: $10.2 million
Regardless of a busy yr of innovation and enterprise for information media platforms, The Define, which branded itself as “the following era model of the New Yorker” was shut down. The media web site was began by Josh Topolsky and had an specific give attention to serving millennials with a digital-first information media model.
The shutdown was a part of a broader layoffs at Bustle Digital Group, which acquired the publication in 2019. Pre-acquisition, The Define had already scaled again its editorial employees and refocused on freelance articles. (Enter — a tech web site that Topolsky based for BDG — continues to publish.)
Periscope went out with extra of a whimper than a bang. The startup was acquired by Twitter earlier than it had even launched a product. With Meerkat bursting on the scene that yr at SXSW, Twitter went on the offensive, shopping for the startup to construct out its personal stay video providing.
Periscope’s run was first rate so far as this stuff go, and its know-how will stay on as a part of Twitter’s video choices, even after the app is formally discontinued subsequent March. However ultimately, Periscope was a shell of its former self. Actually, this can be a uncommon occasion the place the pandemic could have really delayed its shutdown.
The corporate notes, “We in all probability would have made this determination sooner if it weren’t for all the initiatives we reprioritized because of the occasions of 2020.”
Whole Raised: $15.1 million
The corporate made beer-brewing machines that used espresso pod-style PicoPaks, then expanded into different classes like espresso and tea, however by no means fairly attracted sufficient prospects to make the enterprise viable. It bought its property earlier this yr to PB Funding Group — a bunch of lenders recruited by then-CEO Invoice Mitchell in 2018 to maintain it afloat.
It’s attainable that PicoBrew will stay on in some type, as PB Funding Group says it’s in search of consumers for the corporate’s patents and different mental property, and that it’s going to hold the web site operating within the quick time period in order that the machines don’t cease working.
Whole Raised: $1.75 billion
Extra so than any tech firm in latest reminiscence (with the attainable exception of Theranos), Quibi’s existence seems like a fever dream. $1.75 billion in funding later and what do we’ve to indicate for it? “Fierce Queens,” a nature documentary about feminine animals. The HGTV-style program, “Homicide Home Flip.” And, after all, “The Form of Pasta.” A present about pasta.
Early experiences of the service’s demise appeared untimely — if solely as a result of there was seemingly no method an organization may burn via that a lot capital that rapidly. By late-October, nonetheless, it was over. “All that’s left now could be to supply a profound apology for disappointing you and, finally, for letting you down,” founders Jeffrey Katzenberg and Meg Whitman wrote in an open letter.
Generally startup failures are dangerous timing. Generally it’s simply plain dangerous luck. With Quibi, the diagnoses of what went unsuitable might be summed up in a single phrase: the whole lot.
Whole Raised: $15 million
Rubica spun out of safety firm Concentric Advisors with the intention of providing instruments that have been extra superior than antivirus software program, whereas nonetheless remaining accessible to people and small companies. CEO and co-founder Frances Dewing stated that when prospects in the reduction of on spending in the course of the pandemic, the corporate tried to shift its focus to bigger enterprise, however it didn’t persuade buyers there was a enterprise there.
“We have been all actually shocked given how related and wanted that is proper now,” she stated. “Buyers didn’t agree with that or see it in the identical method.”
Whole Raised: $104 million
ScaleFactor was a startup claiming to supply synthetic intelligence instruments that would substitute accountants for small companies; it blamed the pandemic for reducing its income in half and forcing the corporate to close down. Nevertheless, former workers and prospects told Forbes a different story — that ScaleFactor really relied on human accountants (together with an outsourced workforce within the Philippines) to do the work.
Whereas it’s hardly unprecedented for a startup to fudge the reality about their degree of automation versus human labor, this reportedly resulted in error-filled accounting for ScaleFactor purchasers. (Responding to a fact-checking e mail, former CEO Kurt Rathmann stated the e-mail was “stuffed with quite a few factual inaccuracies and misrepresentation” and declined to remark additional.)
Whole Raised: $20 million
“In 2019, our truck grew to become the primary fully-unmanned truck to drive on a stay freeway,” Starsky Robotics co-founder and CEO Stefan Seltz-Axmacher wrote in a Medium put up in March. “And in 2020, we’re shutting down.” After 5 years and $20 million in funding, the autonomous trucking firm shut its doorways that month. It wasn’t for lack of ambition or demand — it appears protected to imagine there’s nonetheless a vivid future for self-driving vehicles.
Finally, nonetheless, Starsky gained’t be alongside for that experience — a reality Seltz-Axmacher blames largely on timing. A crowded market is actually at play, as properly, with numerous firms at the moment pushing to carry autonomous know-how to the street.
Whole Raised: $10 million
Based in 2018 by ex-Googlers, Stockwell AI shut down after being unable to search out enterprise for its in-building good merchandising machines that stocked the whole lot from condoms to La Croix. The corporate blamed the “present panorama” (also called the worldwide pandemic we’re experiencing) for its closure.
Stockwell AI, previously often known as Bodega, was well-funded and well-known, with greater than $45 million in funding from buyers that included NEA, GV, DCM Ventures, Forerunner, First Spherical and Homebrew. Nonetheless, even enterprise capital couldn’t make merchandising machines work properly sufficient.
Whole Raised: $2.5 million
One other travel-focused startup bites the mud because the coronavirus limits the possibility to soundly discover the world (not to mention your neighborhood). Trover, a photo-sharing hub for vacationers acquired by Expedia, shut down in August. The startup was based by Wealthy Barton and Jason Karas and was meant to attach folks travelling to the identical locations. The startup had fairly the life: it started out of the stays of TravelPost, a journey evaluate web site, and bought scooped up by its guardian firm when it solely had $2.5 million in funding. Sadly, its nine-year journey is over for now.