The year 2015 and the first quarter of 2016 brought pivotal changes in the startup ecosystem. If funding and scaling was the buzz of early 2015, acquisitions, layoffs, and shutdowns have surely taken over in 2016. About 212 new businesses have not made due to see 2017. What’s more, the number is half higher than a year ago, when around 140 new companies were closed down, as per firm Tracxn.
The greatest setback in 2016 was grocery delivery startup PepperTap, which was named the greatest rivalry to BigBasket a year ago. The organization, which began operations in 2014, had raised more than $51 million from an alliance of huge financial specialists, including Sequoia Capital, Saif Partners and internet business major Snapdeal. In April, its organizer Navneet Mishra reported the choice to close grocery business.
Seven out of main 10 new companies that were closed down in the wake of raising sizeable assets were established in or after 2014. These included online messenger booking platform Parceled, which twisted up business in June 2016, and DoorMint, which shut its on-demand laundry service in September due to lack of funds.
The list also incorporates Buildzar, an online business commercial center for construction material. It ceased operations this month, only 11 months in the wake of raising $4 million from Puneet Dalmia, MD of Dalmia Bharat. Read Startup shut down because of investment from Dalmia Bharat.
“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.
Lacks of funds and rising competition had clearly been the major reasons for the shutdowns and exits. Although the market till now, has been grabbed by the big names, with the crunch in funding it will now be the show time for the smaller players. Read more Startup News.