Y Combinator is one of the best places in the world for an early-stage startup. This does not predict the guaranteed success of all their projects. In today’s era, startup failure rates are extremely high, and while the amazing networks know how to get access to resources of YC that can ultimately help their companies in attaining success. As per the database of YC, over the last 15 years, YC has invested in more than 2200 companies. Out of which more than 400 among them are currently officially inactive. Some of such failed startups are featured below.
Some of the Failed YC Startups
Atrium
- Industry: Legal Tech and Law
- Funding: >75M dollars from 100+ investors
- Employees: 100-250
- Founders: AugieRakow, BebeChueh, Chris Smoak & Justin Kan
- Closed date: Mar 4, 2020
Atrium was an innovative law firm targeting startups and had a motive to facilitate better service than traditional law firms with the help of proprietary technology. The company has raised about $75M in funding in 5 rounds. Atrium company’s CEO is Justin Kahn, the famous founder of justin.tv, who exited Amazon for close to a billion dollars.
Atrium was getting out of money very promptly while failing to generate meaningful revenue. The company decided to focus entirely on their technology and cut their legal division (the lawyers working for them).
uBiome
- Industry: Healthcare
- Funding: 109.9M dollars from 23 investors
- Employees: 100-250
- Founders: Jessica Richman & Zachary Apte
The goal of uBiome is to utilize big data and crowd science to unlock the secrets of the human microbiome.
uBiome was essentially trying to take the initiative of the growth in order to attain the higher revenue number without including additional value to theirs.
Meta
- Industry: Augmented Reality, Consumer Electronics
- Funding: 73.0M dollars from 21 investors
- Founders: Ben Sand, MeronGribetz & Raymond Lo
Meta was designing an augmented reality headset. The Trump administration’s trade war with China resulted in a failed funding round which was led by a Chinese investor, which put the company under stress financially.
While the tech developed by Meta could create value for its new owner and their clients, it’s an extremely newer concept to consider. The investors in the company managed to recover their losses.
Call9
- Industry: Healthcare, Health Tech, Telemedicine
- Funding: 34M dollars from 10 investors
- Employees: 100
- Founders: Celina Tenev, Timothy Peck & XiaoSong Mu
Call9 aimed to enable patients in nursing homes to receive remote emergency medical consultations, but hopefully avoid stressful waits at ambulances and emergency rooms.
The reason for the failure of Call9 is complex, but it gained a lot of trouble with the adoption of the “value-based care” business model. The company was further paying for the value provided rather than the time of the specialist. The company was spending much more money than what it was actually earning and eventually had to lay off its 100 employees.
Boosted
- Industry: Micro Mobility
- Funding: 73.0M dollars from 16 investors
- Founders: John Ulmen, Matthew Tran & Sanjay Dastoor
Failure for the investors doesn’t require a complete shutdown of the business.
This is clearly an illustration that even Y Combinator cannot bend market forces at their will. Even with the huge investments made by the company, which has impressively managed to validate an innovative product that is subject to political and market risks.
