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The Indian startup scene is a vibrant landscape, brimming with innovation and ambition. However, for every success story, there are ventures that don’t quite make the cut. Here, we explore 10 failed Indian startups that, despite early promise, ultimately faced closure.
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Guruji.com
Founded and Closed: 2006-2011
Founders: Anurag Dod and Gaurav Mishra
About Guruji.com
India’s first crawler-based search engine, Anurag Dod developed it for Indian users and secured $15 million in two funding rounds. However, media reports suggest Dod faces legal issues for copyright infringement.
Reasons of Failure
Guruji.com is also one of the failed Indian startups. It’s failure can be attributed to its music search feature, which allowed users to access unlicensed, copyrighted music from various websites, leading to a violation of copyright laws and resulting in legal action against the platform.
Meesho Superstore
Founded and Closed: 2016-2022
Founders: Sanjeev Barnwal, Vidit Aatrey
About Meesho Superstore
Meesho, an Indian online reseller platform, was established in 2015 in Bangalore to provide a business-friendly environment for customers. With over 2 million resellers and 20,000 suppliers, Meesho has grown into one of the largest networks of resellers in the country. However, the company had to shut down its grocery business, Meesho Superstore, which fired nearly 300 employees. The business remains open in select cities like Nagpur and Mysore.
Reasons of Failure
Meesho Superstore’s closure was attributed to low revenue and high cash burn, and the company offered a two-severance package to its employees upon closure. However, the company has not provided any explanation to its customers.
Shuttl
Founded and Closed: 2015-2020
Founders: Amit Singh and Deepanshu Malviya
About Shuttle
Shuttl is a mobile app providing office commute services through ride aggregation. It operates 1200 buses and has completed nearly 60,000 rounds. The first service was launched in Delhi-NCR and has secured $36 million in funding rounds.
Reason of Failure
The Shuttl business model was significantly impacted by the pandemic, leading to a sudden decrease in demand. The company is currently seeking buyers to sell its business. Despite plans to expand internationally, the Covid-19 effects were too severe. Shuttl faced criticism for failing to pivot its services like similar apps in the same industry.
Mastree
Founded and Closed: 2016-2022
Founders: Shrey Goyal and Royal Jain
About Mastree
Mastree, an ed-tech app offering live, personalized English language courses for grades 5-8, was acquired by Unacademy in 2020. However, after investing $5 million and a year, the app was shut down for unknown reasons.
Reasons of Failure
Unacademy, an ed-tech startup, has announced the closure of Mastree. The company did not provide any reasons for the closure, but the decline in students’ interest in online learning platforms may have been the cause. Unacademy acquired Mastree to strengthen its K-12 business, but the project was also completely closed down in 2022.
Hike Messenger
Founded and Closed: 2012-2016
Founder: Kavin Bharti Mittal
About Hike Messenger
Hike Messenger, also known as Hike Sticker Chat, was an Indian freeware instant messaging service. Later it was acquired by Hiker Private Limited and in 2015 began offering free voice calling over cellular networks and WiFi globally. It was the first messaging service to launch a mobile payment solution. On 6 January 2021, the company announced it would no longer be effective post-14 January 2021.
Reasons of Failure
Mittal, the co-founder of the messaging app company, stated that global network effects were too severe for the app to continue operating. And therefore, it is one of the failed Indian startups.
Niki (Niki.ai)
Founded and Closed: 2015
Founders: Nitin Babel, Shishir Modi, Keshav Prawasi, Sachin Jaiswal
About Niki.ai
Niki, a Bangalore-based artificial intelligence company, was founded in 2015. It raised $2 million in a Series A round from multiple investors and offers virtual assistant services in Hindi, Bengali, Tamil, and English.
Reasons of Failure
The app has disappeared without an official explanation, possibly due to a lack of funds. Despite exploring acquisition opportunities, the company has not reached a definitive deal.
SMAAASH
Founded and Closed: 2012
Founder: Shripal Morakhia
About SMAAASH
SMAAASH, launched in 2012, was a renowned gaming and entertainment center in India that combined sports, virtual reality, music, and dining for an advanced social experience. Founded by Shripal Morakhia, it incorporated sports simulation technology and proprietary gamification, offering unique twilight bowling zones, motor racing simulators, and go-karting tracks. SMAAASH was spread across 32 centers in 16 cities and recently launched its Mall of America in the USA.
Reasons of Failure
The company was closed due to the ongoing Covid-19 lockdown. Founder Shripal Morakhia expressed regret for the company’s premature death and the lack of funding. Despite investors’ promises to fund the company, it did not result in a capital infusion, leading to its collapse.
Vigo Video
Founded and Closed: 2012-2020
Founder: Sandeep Kumar
About Vigo Video
Vigo Video, formerly Hypstar, is a social network app that allows users to create short videos. Owned by ByteDance, it was launched in China in mid-2017 and expanded internationally. The app has a user base of 80 million, with over 200,000 daily posts in India. It topped the free app chart on Google Play India shortly after its launch.
Reasons of Failure
India’s government suspended Vigo Video in June 2020 due to data and privacy issues, and border conflicts between India and China. ByteDance, the parent company of TikTok, is directing millions of users to download TikTok instead. Vigo Video was shut down in India in October, while Brazil and the Middle East have already banned it. The app is shutting down due to the inability of ByteDance to meet expectations set by TikTok. Vigo has around 4 million monthly active users.
Jabong.com
Founded and Closed: 2012-2020
Founder: Praveen Sinha, Lakshmi Potluri, Arun Chandra Mohan, and Manu Kumar Jain
About Jabong.com
Jabong.com was an Indian e-commerce portal that served as an online mall for customers to access products from various partners. It ranked 44th in India by Alexa Traffic and 10th in Google Zeitgeist India in 2012. Flipkart acquired Jabong in 2016 for $70 million and shut it down in February 2020 to focus on Myntra.
Reasons of Failure
Flipkart, owned by Walmart, has shut down Jabong to focus on its premium fashion marketplace, Myntra. The decision is strategic, as traffic to Jabong has been declining and Flipkart’s marketing budget is not efficient. In 2019, Walmart took a non-cash impairment charge of $290 million due to the unprofitable investment on Jabong.com.
Doodhwala
Founded and Closed: 2015-2019
Founders: Aakash Agrawal & Ebrahim Akbari
About Doodhwala
Doodhwala, a hyperlocal delivery platform, launched in 2015 with a subscription model for milk and groceries. Despite strong unit economics and a low delivery cost of Rs.3, the company failed to maintain a steady growth rate and customer retention. Despite raising a $2.2 million seed investment from Omnivore and another Pre Series A funding from Stonehill Capital, the company failed.
Reasons of Failure
Doodhwala’s initial funding was successful, but it struggled to raise further funding due to competition from big players like BigBasket, Milkbasket, and Dailyninja. These players absorbed smaller players, making it difficult for Doodhwala to sustain itself. Experts believe micro-delivery platforms aren’t scalable and justified in the top three metros.
Conclusion
These failed Indian startups offer valuable lessons for aspiring entrepreneurs. Understanding the challenges they faced – competition, funding issues, and market changes can help future ventures build a more sustainable path to success. The Indian startup ecosystem continues to evolve, and while some ventures falter, the spirit of innovation and resilience thrives.
