The toughest part for any entrepreneur who owns a startup is sustaining a startup. All over the world, every second person advises entrepreneurship as a shortcut to make money and get a richer scheme. The uncertainty and constant pressure towards work is a huge responsibility even for the toughest of individuals. Here we have taken the initiative to make you better understand some failed startups in India.
As per the report, more than 5 million startups are founded every year that are tanking. However, only 10% of these startups succeed in the long run.
The case study has been designed here to give you insights into the failed startups of India that were destined to reach new heights.
Failed Startups In India
Yumist
Industry: Food Venture
Yumist is a startup that serves food at home, which is nowadays becoming a trend in today’s startup category. Yumist is also one of those ventures. The startup, Yumist, was established in the year 2014 in order to cover the daily-meals requirements in India, which is also a largely untapped market. The founders of the startups are Alok Jain and Abhimanyu Maheshwari, who managed to raise about $3 million in funding.
What was the reason for failure:
The business model followed by the company was inclusive of a high burn rate that required extensive capital that was beyond the reach of the company to achieve growth. In the hands of the founders, enough funding was also not available to run the startup. So the founders decided to shut down the startup.
Stayzilla
Industry: Real Estate
Stayzilla was walking on the path of becoming the largest homestay network in India. With around $33.5 million in funding, the company established itself in the hotel-rental segment. Stayzilla was founded by YogendraVasupal, RupalYogendra, and SachitSinghi. The trouble started arousing when the founders found it difficult to re-pay the vendors. And later, the founders took a decision to shut down the company in February 2017; hence YogendraVasupal officially announced the closure of Stayzilla’s operations.
What was the reason for failure:
People were not ready for such Hi-Fi technology chosen by Stayzilla. However, the company somehow managed for some time. But when people started becoming familiar with online booking, new competitors emerged with better discounts and offers. Stayzilla was lacking in funding, and it became tough for the company to deal with the same. In addition to this, legal disputes and a lack of focus on growing the business destroyed the plan of Stayzilla.
Roder
Industry: Logistics
Inter-city travel has become a major requirement of this traveling world. The reason behind the same may be anything, whether it is an office location, excursion, meeting a friend, or any other factor. These journeys can massively affect the pocket. Roder, which was earlier known as Insta Cabs, was founded by AbhishekNegi, Ashish Rajput, and SiddhantMatre in the year 2014. The target of the company was to ease inter-city rides. Roder was offering the one-way rides at nearly half the market price.
What was the reason for failure:
The inability to cope with customer acquisition costs and not keeping up with the user retention rates. Moreover, increased competition from experienced ventures like Ola and Uber added to Roder’s challenges. This is one of the major reasons for entrepreneurial failure.
Turant Delivery
Industry: Logistics
The B2B-based startup was an intra-city logistics provider that was founded in the year 2015. The motive behind the establishment of the company was to bring a new flavor to the Indian logistics industry. The strategy followed by Turant Delivery facilitates services at a price as much as 15% less than their fellow competitors charged for the same trip.
What was the reason for failure:
Turant Delivery did not have the funds to sustain itself in the market in the long run. A logistics service provider needs intensive cash flow to run the organization. Hence, having adequate funds is the major factor behind the success of any logistics startup.
Overcart
Industry: Re-Commerce
Overcart was the first Indian fin-tech startup that facilitated a platform for purchasing refurbished, overstock, and pre-owned items. Overcart was founded in the year 2012. With the help of this platform, people became able to buy and sell their electronic devices on the website. Overcart gained various substantial angel investments; however, the company failed to capitalize on them.
What was the reason for failure:
Overcart did not seem to be very focused on its business project. The user faced unsatisfactory services that included late delivery of the product, poor quality of purchased items, and bad customer service which led to a customer shift from the platform. This factor led to the shutdown of the company in 2017.
