The year 2015 and the opening quarter of the year 2016 fetched crucial changes the startup network. When financing and scaling was the buzz of mid 2015, failures, acquisitions, cutbacks, and shutdowns have unquestionably assumed control in 2016. Around 212 new enterprises will fail to see the light of 2017. Besides, number is half higher than the year before, when around 140 new businesses were shut down, according to Tracxn.
Why some startups failed to survive 2016?
The biggest failure story in 2016 was PepperTap, a grocery delivery startup which was named the biggest rival to BigBasket last year. The company, which started operations in 2014, had raised more than $50 million from an coalition with gigantic monetary authorities, including Sequoia Capital, Saif Partners and Snapdeal. In April, its coordinator Navneet Mishra reported the decision to close the business.
Seven out of primary 10 new organizations that were shut down in the wake of raising substantial resources were set up in or after 2014. These included online booking platform, Parceled, which contorted up business in June 2016, and DoorMint, which close its on-request laundry service in September because of absence of funds.
The rundown additionally joins Buildzar, an online business community for construction material. It stopped operations this month, just 11 months in the wake of raising $4 million from Puneet Dalmia, MD of Dalmia Bharat. Perused Startup close down on account of venture from Dalmia Bharat.
Startup failure: The harsh reality
“There is a growing intolerance for companies which are not performing; and there is increasing pressure from investors who are closely seeing what works and what doesn’t. Investors know that there is credible capital that this country can’t afford to waste, so there is very little merit in allowing such companies to continue running,” says Ajay Hattangdi, CEO of venture debt provider InnoVen Capital.
Absences of assets and rising rivalry had plainly been the real purposes behind the shutdowns and acquisitions. In spite of the fact that the market till now, has been gotten by the enormous names, with the smash in subsidizing it will now be the show time for the littler players.