Not all Startup businesses touch heights and become super successful. Many face the problems, whereas many face failures. But failures give lessons. It provides an idea where you went wrong, and from where you need to start again without creating the same mistakes.

Below are the few startup failure which occurred worldwide:

1.Powa Technologies:

Dan Wanger found it in 2007. This UK based company was running on commerce, mobile and e-commerce platform. Focused products by the companies include PowaTag, PowaPOS, and PowaWeb.

The total collection of funding:

  1. A- series: $76 million, August 2013.
  2. B- series: $20.7 million, February 2014.
  3. C- series: $80 million, November 2014.
  4. Total funding rounds- 3.
  5. Total funding amount – $176.7 million.
  6. Total Investors- 1.

This startup failure occurred in February 2016 because of financial difficulties.



A music streaming company which provided support in 85 countries faced failure in December 2015. It was established in 2009 and had app for Android, BlackBerry, iOS, and Windows Phone, also it had a website from which one could download the music to play offline or stream online service.

Pandora Media Inc acquired it for $75 million.

The total collection of funding:

  1. 2009- Seed Round.
  2. 2011- Second Round: $17.5 million.
  3. 2013- Third Round: $75 million.
  4. 2013- Fourth Round: $3.8 million.
  5. 2013- Fifth Round: $4.4 million.
  6. 2014- Sixth Round: $25 million.
  7. Total funding amount- $125.7 million.
  8. Total Investors- 7.



Solyndra manufactured cylindrical panels of copper indium gallium selenide (CIGS) thin-film solar cells. It was located in Fremont, California. It went through 8 rounds of funding.

  1. Series B: $79.2M in Jan 2006, included 2 investors.
  2. Series D: $75M in Jul 2008.
  3. Series E: $220M in Dec 2008, included 10 investors.
  4. Debt Financing: $535M in Mar 2009, included 1 investor.
  5. Series F: $286M in Sep, 2009.
  6. Private Equity: $175M in Jun 2010, included 5 investors.
  7. Dept Financing: $186.64M in Feb, 2011.
  8. Private Equity: $10.66M in Jun 2011.

As it used to manufacture solar photovoltaic systems, hence these panels were used for commercial rooftops mounting.

It seems that the startup failure occurred because of lack of funding. Also, the price of polysilicon dropped by 89% between 2009 and 2011, which increased their competition in the market to a great extent. Therefore, they could not sustain for a long time.

It declared itself bankrupt on Sept 1, 2011.



eToys used to sell toys over the internet with the help of a retail website. It was established in 1997. After 12 years of its establishment, in Feb 2009, Toys “R” Us acquired it. It offered $20 a share initially. It raised a total amount of $166.4M in the initial public offerings in 1999. eToys sold a total of 8.32 million shares at a cost of $20 each which was much higher than the expected range, which was $10-$12.

The main products were toys, children’s books, videos, music, and software. It covered a total of 750 brands.

eToys main headquarters were in Santa Monica, California. Its regional headquarters were in San Francisco; Danville, Virginia; and London, England.

It raised a total funding of $250K in seed capital.

5.Soapstone Networks:

Soapstone Networks was established in July 1996. It used to develop and manufacture data networking equipment to control software and hardware. Initially, its name was Avici Systems Inc. In March 2008, it renamed itself to Soapstone Networks Inc. And finally, it was closed in July 2009.

The funding series went as below:

  1. Series A: $15.75M in Aug 1997.
  2. Series B: $55.3M in Aug 1998.
  3. Series C: $40M in Sep 1999.

Therefore, the total amount of funding raised was $111.05M.


Extreme Networks acquired it on August 10, 2009.


SunRocket was established in 2004, in the US. It was VoIP service provider which was established by Joyce Dorris and Paul Erickson. It provided broadband internet connections with the regular telephone connections as well, therefore, it was different from other companies. Hence, this helped the company in competing in the market.

Unfortunately, it shut down very early. The company ceased its operations in 2007. In 2009, a private firm in San Diego, California, purchased its domain and trademarks. Since 2011, wireless, VoIP, mobile and online gaming, video and music streaming and downloading services are handled by a new firm under the name of SunRocket.

It underwent just 1 funding round:

  1. Series B: $25M in Sep, 2005, by Mayfield Fund.


7.Pay By Touch:

Pay By Touch by established in 2002 by John P Rogers. This company provided a secure access to many services with the help of biometric sensors. Hence it was a highly secure gateway as it used biometric features of persons. The company owned nearly 800 employees.

It went through 2 funding rounds:

  1. Series B: $25M in Jun 2004, included 2 investors. Lead Investor was Mobius Venture Capital.
  2. Series C: $60M in Jan 2006, included 2 investors.

The total amount of funding received was $340M.

The company filed for bankruptcy in 2007. This startup failure occurred in Mar 2008. On 19th Mar 2008, it shut down suddenly without notifying any of its customers.

Now, YOU Technology owns all its valuables.


8.Move Networks:

Move Networks was founded in 2000 in Irvine, California. It used to provide offline or online streaming to computers, televisions or mobile devices with the help of internet. and choose it as a default video streaming technology.

It raised a total fund of $102.08M in 6 rounds of funding:

  1. Series A: $11.3M in Feb 2007
  2. Series B: $34M in Oct 2007
  3. Series C: $46M in Apr 2008
  4. Not Disclosed in Aug 2008
  5. Venture: $7.78M in Apr 2009
  6. Debt Financing: $3M in May 2010.

This startup failure occurred because it failed to keep its promises. The necessary condition of plugin installation to access the service occurred as a barrier to its success.

On Jan 6, 2011, it was acquired by EchoStar.



Homejoy was an online service provider where customers could ask for home services like house cleaning and handymen. It was founded by Adora Cheung and Aaron Cheung in 2010. Its initial name was Pathjoy.

It was the fastest growing company in 2012. Its services were covered in US, Canada, and the UK. Service charges varied from $25 to $35 per hour.

The total amount of funding received was $64.19M:

  1. The amount of initial 2 rounds were not disclosed.
  2. Seed: $1.7M in Mar 2013.
  3. Series A: $24.49M in Oct 2013.
  4. Series B: $38M in Dec 2013.

It was closed in 2015. Here, the startup failure took place because of low funding amounts.



Gurugram based startup established in 2010. In 2012, the company launched the online shopping portal- ” Askmebazaar”. In 2013,’Getit’ owned ‘Askmebazaar’. It decided to shut its business in 2016. Below are the reasons behind this startup failure:

  1. Lack of Investments.
  2. A single company ‘Getit Infoservices Private Ltd.’ raised the funds.
  3. The MD of  ‘Getit Infoservices Private Ltd.’ did not pay the employees and closed the company.

Only one investor raised the funding on May 15, 2015, with an amount of $10M, as a result, it could not stay for long.



It was an on-demand laundry startup. It was started in Mumbai by Abhinav Agarwal and Naman Lahoty. They used to process clothes, pick them up, pack them and drop to the places. It did not take a successful turn as expected because this startup was not able to beat the already present local businesses of laundry shops. This startup was not successful in offering such low-cost services.

It went through 2 rounds of funding:

  1. Seed: Undisclosed amount, in Apr 2015.
  2. Series A: $3M, in Aug 2015.


Mostly the reason for shutting down of these businesses were the funding issues. The startup failure is not an end. When the competition in the market increases, investors see it difficult to invest in a particular startup, if they don’t find any profits in the business. Therefore, it’s very necessary to keep yourself updated with the technology, what so ever your startup is about.

Don’t forget to share your comments and reviews about the article. Provide your valuable suggestions as well.







Categories: Technology

Pavneet Kaur

I am an Analyst, currently working with HCL Technologies. Blogging is my passion. Apart from writing, I prefer reading in my spare time. I have done my in EPDT (Electronics Product Design and Technology) and have completed my research work on Multiband Antennas.

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