• Nine out of 10 startups in India are doomed to

fail within the first five year

• Hedge funds and VCs were falling over

themselves to back internet businesses in India
HubHaus (2016 – 2020) is a provider of a shared community platform intended to solve
housing issues in the modern age.
Founded by Shruti Merchant, HubHaus’s failure could be directly linked to COVID-19
decimating the rental market. But the company had been facing funding issues prior to the
pandemic. It had managed to raise only $11.4 million in Series A funding.
Jabong.com was an Indian fashion and lifestyle e-commerce portal
founded by Praveen Sinha, Lakshmi Potluri, Arun Chandra Mohan
and Manu Kumar Jain.

Founded: 2012
Headquatered: Gurugram, Hayarana
 Jabong (2012-2020)

Not all shutdowns are necessarily failures for startups.

One of the first Indian companies to focus exclusively on
the e-tailer space for clothing, Jabong.com was bought by
rival Myntra, which was owned by Flipkart. In 2020, the
company and portal were formally shut down so that
Flipkart could focus exclusively on Myntra.
 Freshconnect
Tarun co-founded Freshconnect, an online B2B marketplace for fresh
agricultural produce like fruits & vegetables. After making mistakes like lack of
focus and bad hiring, they couldn't secure a funding round and eventually got
acqui-hired by another company.

• Founder: Tarun Gupta

• Industry: e-Commerce

• Started in: 2018

• Closed in: 2020

• Specific cause of failure: Bad Management

• On-demand grocery-delivery startup PepperTap rolled back its
consumer-centric app in April 2016.
• Due to pressure from rivals including Grofers and Bigbasket,
which raised substantial funding.
• It harmed employees as well as its sister concern logistic
company NuvoEex which has Snapdeal as its biggest customer.
• The startup was launched in November 2014 and had raised
funding in four rounds from Sequoia Capital, SAIF Partners,
Snapdeal and others.
• With a database of over a lakh customers, it does 850 - 900
deliveries a day in Mumbai, with an average cart value of R1400
per order.
• Founded in 2012 by trio team of Karan Mehrotra (CEO), Amit
Naik and Rashi Choudhary (COO), Localbanya is an online
grocery store/supermarket that offers 1400 household products
with wide array of categories of fruits and vegetables, exotic
vegetables, groceries, personal care, household supplies,
detergents, kitchen ware, breakfast, snacks, etc.
• The Mumbai-based startup offered grocery shopping from the
comfort of homes or offices at competitive costs.

• The startup was founded in November 2014 by IIT-Bombay alumni

Rahul Kumar and Ayush Garg.

• It was a part of Microsoft's startup programme, BizSpark, and also

among the 16 startups which were selected for the Google
Launchpad programme.

• It reportedly failed to find a profitable growth model in a segment

which was otherwise attracting investors in droves.
• Sanjay Purohit founded of iProf Learning
Solutions, India's largest e-learning company.

• iProf Learning Solutions was created in 2009 and

is backed by Norwest Venture Partners, IDG
Ventures and global education research and
technology company Hobsons (a subsidiary of
the Daily Mail and General Trust

• iProf provides a number of applications for both

students and schools.

• It has tied with education firms such as Kaplan,

McGraw – Hill Education and IGNOU to become
the nation's leading learning solutions company.
• The startup was incubated in September 2013 by IIT Bombay. The
founders Aditya Gandhi and Sahiba Dhandhania.

• Aditya is a B.Tech and an M.Tech degree from IIT Bombay under his
belt

• Sahiba Dhandhania is a gold Medallist from Christ University,

Bangalore

• The Mumbai-based startup was launched to connect students with

industry leaders and big companies for industrial exposure and
training.
• The Google India MD, the Amazon India country manager, the FreeCharge CEO,
and the founders of CommonFloor, TaxiForSure, and Yo China were all investors
in this food startup. Its founder, Shashank Kumar Singhal, was the mobile
product head for India’s first bus ticketing site RedBus, who had qualified from
the prestigious Indian School of Business. His co-founder Monica Rastogi was
equally well qualified. And yet, it had to shut down in October 2016 within a
year of launching in 2015

• Dazo, an app-based service that curated and delivered meals

• The startup began as an internet kitchen with its own chefs and reliable
partners serving a few localities in Bangalore.
• Spoonjoy, like Dazo, had an impressive roster of
investors including Flipkart founder Sachin Bansal.
• Founded in 2015, closed in 2016.
• This food tech company got follow-up funding of
US$1 million from Saif Partners. But it could not
sustain operations and scaled back last month
before being acquired by grocery delivery startup
Grofers
• Founded in 2015
• ZuperMeal, a home-delivery food venture backed by world-
famous chef Sanjeev Kapoor.
• It allowed users to pre-order food from nearby restaurants.
• It closed its operations in May after just eight months of raising
seed funds from the celebrity chef Sanjeev Kapoor.
• Founded in 2013
• iTiffin, backed by Bangalore cricket star Robin
Uthappa, had a subscription-based model for
delivering meals with a predefined calorie count.
• It was unable to raise growth funding.
• Gurgaon-based web-only women’s fashion brand DoneByNone
was backed by early-stage venture capital firm Seedfund, which
invested US$2 million in it.
• DoneByNone had three founders – Amarinder Dhaliwal, Vijesh
Sharma, and Vijay Misra – with tons of experience in
ecommerce, internet businesses, and technology.
• Dhaliwal and Sharma were earlier with Bennett, Coleman & Co.,
and Misra was a former director of the TCNS Clothing Company.
• They launched the company first as Handspick in February
2011, and a year later, rebranded it as DoneByNone.
• Bangalore-based Fashionara, which was launched by
former Reliance Trends CEO Arun Sirdeshmukh and
former Times Internet Chief Technology Officer Darpan
Munjal in 2012 closed its business in May 2016.
• It raised $4 million from Helion Venture Partners and
Lightspeed Venture Partners and scaled business in
apparel, accessories and footwear segment.
• All three niche online marketplaces were launched
by Vayloo Technologies, along with Lenskart, an
eyewear marketplace which is among the 15 top
funded e commerce startups in India this year.
• The shutdown of Jewelskart, Bagskart, Watchkart
which had more competition and less traction was
therefore a strategic move to focus energies on the
niche segment that took off this year.
• A number of startups got VC backing in the
fashion rental space. It’s a proven model in the
US, with Poshmark and Rent the Runway, as
well as in China, with Secoo.
• Flyrobe, Liberent, Elanic, SwishList, Klozee,
The Clothing Rental – a whole line of startups
came up in the last couple of years to crack this
space in India.
• Parcelled was in the business of last-mile logistics, handling
pick-ups, packaging, and moving goods to the next point in the
delivery chain.

• TruckMandi, founded by former employees of ecommerce

company Snapdeal, was an on-demand truck booking app.
Transporters could bid for customer loads for a fee – two
percent of the carrying charge. It sounded good on paper and
raised US$2 million, but shut down in a year and a half.
• A number of startups came up in India, for three-
wheeler auto-rickshaws (Southeast Asia’s tuk-tuks).
• And they even caught the attention of observers
abroad as the poor man’s Uber.
• These mobile auto-hailing apps are “demonstrating
how modern technology can be mashed up with
traditional technology to solve problems in
developing cities around the world,” gushed Harvard
Business Review
• Unfortunately, the ground reality is different. Adoption
has been slow among drivers even in tech hubs like
Bangalore and Gurgaon (near Delhi). Riders haven’t
rushed for them either, because the fares on hatchback
Uber cars work out almost the same as auto-rickshaw
fares.

• Inevitably, the auto-rickshaw apps have started to die.

Gurgaon-based Autoncab’s closure is a case in point.
Another one that shut down earlier was AutoRaja.
• On-demand laundry startup
Doormint discivered this the
hard way.
• It began as a home services
startup in Mumbai, then pivoted
to the laundry vertical for more
focus. This seemed promising and
Doormint was selected in the first
batch of the Google Launchpad
accelerator.
• Founder Layak Singh started DateIITians while he was a student at
premier engineering college IIT Kharagpur way back in 2011. Being a
novelty, it quickly went viral but that didn’t translate into stickiness.
• The founder then launched a new startup, Cogxio.
• This was a dating app that used location intelligence to link up those
who were already connected online.
• It wanted to tie up with consumer internet businesses to provide
dating options like places to eat and vacations.
• But now, there were already well-funded players like TrulyMadly, Woo,
and Vee.
• Tinder also arrived in India, and so both DateIITians and Cogxio
packed up.
WHY DO ENTREPRENEURS
FAILS?
 REASONS FOR FAILURE

1. Lack of a proper business idea

2. Lack of preparation
3. Flaws in the business plan
4. Changes in the environment
5. Competition
 (CONTD)…

6. Changes in government
laws
7. Failure to predict the
end of the product life
cycle
8. Lack of finance
9. Labour unrest
10.Rapid expansion
 ADMINISTRATIVE PROBLEMS

• Lack of proper planning

• Poor project
implementation
• Poor management
• Labour problems
• Inadequate of technical
skill
 (CONTD)…

• Low level of technical skill

• Lack of strategies
• Problem of inadequate
infrastructure
• Lack of scientific & industrial
research
• Bureaucratic red tape &
regulations
 FINANCIAL PROBLEMS
• Access to & usage of long-term capital

• Access to working capital

• Recovery of debts

• Taxation

• Cash flow
 MARKETING PROMBLEMS

• Lack of knowledge about

market situations & composition

• Heavy competition from larger

players

• Inadequate/improper branding
 (CONTD)…
• Poor after sales service

• Problems in distribution

• Poor advertising/inadequate advertising

• Improper sales promotion activities

 PRODUCTION PROBLEMS

• Raw material shortages

• Lack of proper capacity

utilization

• Lack of proper quality

control
 (CONTD)…

• Lack of utility services or poor utility services

• Outdated technology

• Non standardized products & processes

 INFORMATION TECHNOLOGY

• Helps entrepreneurs work quickly and

efficiently, provide attentive customer service,
increase sales, and project professional images.
• Entrepreneurs also produce and market
products that apply new information
technology.
• Internet also presents a challenge because
customers can check prices and buy online
from large or small companies anywhere in the
world.