Starting a business has never been easier, but you can lose it just as fast – and for multiple reasons. We count down five tech start-ups that folded in 2017.
You have the idea, you have the funding, you have the ambition. However, none of this guarantees that your startup will survive in today’s ultra-competitive global business environment.
Tech entrepreneurs take note − these five startups folded for a variety of reasons.
The company behind Juicero recently announced that is shutting down after just 16 months in business.
The Silicon Valley firm raised around $120 million in funding to develop the wi-fi-connected juicing machine, which cost $399. However, a Bloomberg report revealed the fruit and vegetable pouches required to make Juicero work could be squeezed by hand.
In a statement on its website, Juicero said it was suspending the sale of its juicer and produce packs.
“In a short period of time, you’ve validated that there is national demand for easier access to fresh produce and hassle-free cold-press juicing – thank you again for coming on this journey with us,” the company wrote.
Being first in a certain business space is no guarantee of success. Just ask the team behind fitness tracker firm Jawbone.
The company, once valued at $3 billion, reportedly went into liquidation in June. Its CEO Hosain Rahman is understood to be launching a new health-based tech start-up.
Jawbone’s products were among the first fitness trackers on the market; however, the market has matured. Apple and Samsung have also begun including health-tracking features in smartwatches.
“To add things such as heart rate sensors and smartphone integration requires investment and that can often be the trigger that causes a company to ask: do we want to stay in this market?,” Ian Fogg, analyst at IHS Markit, told BBC News. “Often it’s not possible to continue business as usual with the existing product range.”
3) Yik Yak
Anonymous messaging app Yik Yak was a hit with college students. The app allowed users in the same 5-mile radius to write posts, which were then voted on.
However, the app became associated with incidents of online harassment and bullying. In addition, efforts to enforce permanent log-ins proved unpopular.
As a result, the company has announced it will close at the start of the academic year – having raised more than $73 million in funding and once being valued at $400 million.
Lily was an autonomous drone company. Its product, a “throw and shoot” water-proof drone, could track users for up to 20 minutes via a wristband.
However, despite £34 million in per-orders for the “follow me” device, funding dried up.
“We have been racing against a clock of ever-diminishing funds,” wrote the company’s co-founders, Henry Bradlow and Antoine Balaresque, to customers.
“Over the past few months, we have tried to secure financing in order to unlock our manufacturing line and ship our first units – but have been unable to do this.”
Consequently, the company folded in January.
The idea of a digital user car marketplace intrigued investors. Beepi raised $150 million and at one time was valued at $560 million.
Beepi vetted, processed and delivered to the new owner, bypassing costly overheads and commissions from car dealerships. However, it began selling off its assets in February 2017.
A report by news site TechCrunch suggested Beepi had faced organisational issues and had spent money unwisely. Its founders denied this.
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