India is one of the countries with the highest number of startups in the world. According to the Startup India program, about 27,000 startups were registered by 2020. However, an IBM study indicates that around 80-90% of startups fail. A lack of suitable business models, poor planning, and a lack of unique ideas are some of the key reasons behind these failures.
Let’s take a look at some of the startups in India that failed within five years of their inception.
- Cogxio
Overview: An online dating platform that allowed users to find people with shared interests and then meet and chat in person.
Reason for Failure:
At the time, online dating was an unfamiliar concept in India. The product did not meet market needs. Limited funding for marketing hindered growth, and the delayed launch of the Android app also contributed to the failure.
- Just Buy Live
Overview: A B2B e-commerce platform that provided customers access to brands using simplified technology. Despite substantial investments, it ceased operations within nine months.
Reason for Failure:
The traditional B2B supply model relied on credit. After demonetization, many customers failed to repay loans, leading to financial difficulties. Additionally, the business lacked an effective model to address such issues.
- Taskbob
Overview: A platform that offered high-quality residential services on demand, while increasing the efficiency of service providers.
Reason for Failure:
The profit margins were low because they charged a small fee on each order.
Additionally, the quality of service was inconsistent, leading to decreased customer satisfaction and reduced order frequency.
- PepperTap
Overview: An online platform that allowed users to purchase grocery products at discounted prices.
Reason for Failure:
The startup spent heavily on customer acquisition through marketing. Supply chain issues led to a high rejection rate of orders, causing significant operational challenges.
- ZebPay
Overview: A platform that facilitated the buying and selling of cryptocurrencies such as Bitcoin.
Reason for Failure:
In 2018, the RBI imposed regulations that restricted banks from engaging in cryptocurrency transactions, severely impacting the company's operations.
- CardBack
Overview: A platform that helped users access offers and incentives on their credit and debit cards.
Reason for Failure:
At the time, the Indian market was not mature enough, as many people did not use multiple credit cards.
In summary, the main reasons for the failures of these startups include a lack of industry knowledge and financial difficulties. Proper preparation and strategic planning are essential to avoid such issues. Numerous startup programs in India focus on educating and assisting entrepreneurs, which can be beneficial for long-term business growth.
