- Not every startup collapse is an FTX or Theranos. They don’t all burn so brightly and explode so spectacularly.
- Approximately 3,200 private venture-backed U.S. companies have gone out of business this year, combined, those companies raised north of $27 billion.
- 91% of startups fail.
- Braid, a four-year-old startup aimed to make shared wallets more mainstream among consumers, announced it had shut up shop.
- CloudNordic, a Danish cloud host provider, shut down this year after close to two decades of operation due to a destructive ransomware attack on its systems.
- Convoy, a digital freight broker, closed in October 2023 after raising more than $1 billion.
- Daylight, an LGBTQ+ banking platform that had raised $20 million in funding, announced it would be ceasing operations.
- Fuzzy, the pet care telehealth startup, was here one day and gone the next.
- IRL, the event organizing social app, laid off one-quarter of its 100 or so employees.
- IronNet, a once-promising cybersecurity startup founded by former NSA director Keith Alexander, lasted only a few weeks longer after the founder left as CEO.
- Mandolin, an Indianapolis-based firm, closed up shop after 3 incredible years.
- Veev, a real estate developer turned tech-enabled prefab homebuilder, was on the verge of shutting down after abruptly cancelling a capital-raising initiative.
- ZestMoney, following unsuccessful efforts to find a buyer, was on the verge of shutting down.
- Zume, a company that raised nearly half-a-billion in its eight-year history, liquidated its assets in early June.
Not every startup collapse is an FTX or Theranos. They don’t all burn so brightly and explode so spectacularly. More often than not, there won’t be some high-profile court case and prison time. Amanda Seyfried isn’t going to play you in the made for Hulu movie. The story of most startup failures is far less exciting. The timing isn’t right, funding dries up, runways run out. Of late, a lot of macroeconomic factors have come into play, as well. These past few years have been especially brutal for startup land. According to a recent “approximately 3,200 private venture-backed U.S. companies have gone out of business this year.” Combined, those companies raised north of $27 billion. Even more starkly, it’s a figure that doesn’t include companies that failed after going public or were able to find a buyer. That, after all, would really be stretching the definition of a “startup.”
The Startups We Lost
It’s worth noting too that “failure” is subjective. Does bankruptcy qualify? It’s certainly not a good sign with regard to your company’s health, but plenty of companies have managed to bounce back to some degree. This particular question has been the cause for plenty of discussion around the old TechCrunch virtual watercooler.
For the sake of a piece titled “The Startups We Lost,” I’ve opted to limit the list to those startups that — to the best of our knowledge — have hit the point of no return. Pushing up daisies. Pining for the fjords. As the final days fall off the calendar, let’s take a moment to remember some of the startups that didn’t make it.
Braid
Founded 2019 $10 million raised In October, Braid, a four-year-old startup that aimed to make shared wallets more mainstream among consumers, announced it had shut up shop. Founded in January 2019 by Amanda Peyton and Todd Berman (who left in 2020), San Francisco-based Braid set out to offer friends and family an FDIC-insured, multiuser account that was designed to make it easy “to pool, manage and spend money together.” Braid raised a total of $10 million in funding “over multiple rounds” from Index Ventures, Accel and others. What was refreshing about this closure was Peyton’s candor about what led to Braid’s demise. In a LinkedIn post, Peyton said that Braid had closed its doors in September and outlined her experiences — and mistakes — in building the company, ultimately realizing that it wasn’t going to be a viable business venture. An estimated 91% of startups fail. If more founders shared their experience like Peyton did so others could learn from them, maybe that number would go down.
CloudNordic
Founded 2007 CloudNordic might not be a household name, but a destructive ransomware attack on its systems propelled the company into the limelight — and its ultimate demise. The Danish cloud host provider shut down this year after close to two decades of operation. The company said it didn’t have the money to pay the hackers, and with no options left, the company closed its doors.
Convoy
Founded 2015 More than $1 billion raised The digital freight broker in October 2023, just eight months after the Seattle-based company in fresh funding that pushed its valuation to $3.8 billion. Convoy, founded by former Amazon and Google exec CEO Dan Lewis and CTO Grant Goodale, will live on — sort of. Supply chain logistics platform of the shuttered digital freight network with plans to restore Convoy’s trucking logistics services for customers. Flexport didn’t acquire the business or any of its liabilities, but its CEO said it did plan to retain “a small group of team members from their core product and engineering team.”
Daylight
Founded 2020 $20 million raised In May 2023, Daylight, an LGBTQ+ banking platform that had raised $20 million in funding, announced it would be ceasing operations on June 30. The announcement came months after NY Magazine published an explosive feature on the neobank, which honed in on Daylight, whose seed and Series A fundraises TechCrunch had covered, respectively. NY Mag’s piece detailed a lawsuit brought on by three former employees as well as alleged fabrications and inappropriate behavior on the part of co-founder and CEO Rob Curtis. In a published in May, Curtis said he felt like “now is the right time to exit this market.” Since Daylight’s closure, Curtis has moved on to a tequila-related venture.
Fuzzy
Founded 2016 $80 million raised Some startups die long, protracted deaths. Not Fuzzy. The pet care telehealth startup was here one day and gone the next. In February, the firm was hyping its growth on internal Zoom calls. Within months, the company had closed up shop. Fuzzy’s site was taken down without any warning issued to customers. From the sound of things, even some top execs were precisely what had happened to the startup.
IRL
Founded 2016 $200 million raised IRL’s meltdown was a hot mess. In 2022, the event organizing social app laid off one-quarter of its 100 or so employees. No social network is completely devoid of bots, but an internal investigation by its board of directors found that such accounts constituted around 95% of its 20 million active monthly users. In a lawsuit filed, IRL’s co-founders accused their investors of sabotaging the firm, which was previously valued at $1.17 billion.
IronNet
Founded 2014 $400 million raised IronNet founder Keith Alexander at TechCrunch Disrupt in 2017. IronNet, founded by former NSA director Keith Alexander, was a once-promising cybersecurity startup. After Alexander departed as CEO in July and was replaced with the chairperson of the company’s largest investor, IronNet scrambled to stay afloat, but lasted only a few weeks longer.
Mandolin
Founded 2020 $17 million raised A year after its founding, the Indianapolis-based firm closed up shop. “After 3 incredible years,” it noted, “we are sad to announce that Mandolin will no longer be offering the digital fan experiences you’ve come to love.”
Veev
Founded 2008 $597 million raised Veev, a real estate developer turned tech-enabled prefab homebuilder, was on the verge of shutting down after abruptly cancelled a capital-raising initiative. Later, it was reported that Veev was in talks to file for Chapter 7 bankruptcy.
ZestMoney
Founded 2015 $121 million raised By December, ZestMoney was following unsuccessful efforts to find a buyer. The Bengaluru-headquartered startup employed about 150 people and had raised over $130 million in its eight-year journey.
Zume
Founded 2015 $445 million raised Zume liquidated its assets in early June. Co-founder and CEO Alex Garden told. Throughout its many lives, Zume’s ultimate demise was not a failure to adapt or a lack of funding, as the company raised nearly half-a-billion in its eight-year history. That includes a 2018 SoftBank round of $325 million that valued the company at north of two billon.
