11 Startups went Bankrupt due to Various Reasons
There have been many cases startups went bankrupt for various reasons. Startup business is indeed a hot topic right now. Not infrequently, students or fresh graduates want to build a startup or undergo a career in a startup company. However, startups are not as glamorous as they seem.
There are many things that must be sacrificed starting with money, energy, time, mind, and so forth. In fact, there are many successful startups, but not a few startups that only last in a matter of years or even months.
If you really want to build a startup, it’s a good idea to learn from the mistakes of startup owners that can be a lesson so it doesn’t happen to you. Many startups that emerged later within one year were forced to close down because they were unable to run a business.
There are many reasons why a startups went bankrupt. Some of them are ideas that are quite ambitious but not comparable to execution, choosing names or logos that are too fast, lack of capital, running out of operational costs to management, and financial management that is not solid.
Startups went Bankrupt during 2019-2020
1. Anki (2010 – 2019)
The startup in the robot and artificial intelligence (AI) business managed to raise US $ 182 million or around IDR 2.5 trillion. Three years ago, the company invested heavily to make a small robot called Cozmo.
To produce different emotions in the eyes of Cozmo, the company recruited former Pixar animators and Dreamworks. At the end of 2018, the company launched the Vector robot which is similar to Cozmo but is intended for adults. In April 2019, Anki decided to stop operating, despite having sold 1.5 million robots and hundreds of thousands of Cozmo robot models.
2. Chariot (2014 – 2019)
The startup in the field of mass transportation in the form of a van managed to raise funds of US $ 3 million or around IDR 41.7 billion. Ford acquired the startup two years ago but later closed it in early 2019.
The company did not provide a detailed explanation of the reasons for the closure. However, the company says that the wants and needs of customers and the city are changing rapidly.
3. Daqri (2010 – 2019)
This startup in the field of augmented reality (AR) has managed to raise US $ 132 million or around IDR 1.8 trillion. Daqri closed operations around September and completed the sale of assets.
Daqri is one of the many companies in this sector that failed to hook the company as a customer and competed with Magic Leap, Microsoft, and others.
In the midst of rising property prices, HomeShare provides services to bring together friends to share apartments, and facilitate the creation of “micro-rooms”. This property startup has raised US $ 4.7 million or around Rp. 65.4 billion.
The company said that as of last March, they had around 1,000 active residents. As part of the closure, HomeShare said residents will not get a deposit back for their partitions, but they can save or sell them.
5. Jibo (2012 – 2018/19)
This startup in the robot field has raised US $ 72.7 million or around IDR 1 trillion. Jibo was technically dead at the end of 2018. However, Techcrunch put it on the list of floors assessing Jibo’s death was dramatic.
Jibo must end despite the success of raising funds. The company was forced to lay off almost all of its staff and eventually sent Jibo to live in the robo-farm.
6. MoviePass (2011 – 2019)
This ticket service startup managed to raise US $ 68.7 million or around IDR 957 billion. MoviePass was also briefly acquired by data analysis company Helios and Matheson in 2017. The company looks like it faces a new disaster every week because it is experiencing ‘financial bleeding’, limiting its services, experiencing blackouts, and borrowing more money.
7. Munchery (2010 – 2019)
This food delivery startup managed to raise US $ 125 million or around IDR 1.74 trillion. The company announces business closures to its customers via email. After the announcement, the vendors accused Munchery of taking advantage of them in the last hours, while still allowing them to make shipments that the company could not pay.
8. My number (2012 – 2019)
This cookware startup has raised US $ 145 thousand or around IDR 2 billion. After several successful Kickstarter campaigns worth US $ 1.3 million, support from Samsung Ventures, and changes to the meal planning business, this startup still could not last.
9. Osterhout Design Group / ODG (1999 – 2019)
The news of the closure of this pioneer startup in the AR eyewear business emerged in the first weeks of January. A few years ago, the company raised US $ 58 million or around IDR 807 billion, but less than a year later, the company had been burned by its own funding and could not pay its employees.
By early 2018, ODG had lost half of its employees amid the company’s efforts to find loans to repay employees. In early 2019, only a few crew were waiting for patent sales, after acquisitions by several large technology companies, including Facebook and Magic Leap, failed.
This startup started a business as a company that provides physical storage. However, after selling the storage business in May, the company does business in technology, by building a platform that allows retailers to operate their own product leasing and sales businesses.
10. Omni (2014 – 2019)
However, this business was unsuccessful. The company managed to raise US $ 35.3 million or around IDR 491.2 billion. After the closure of the company, about 10 of its engineers were recruited by Coinbase.
11. Airy (2015-2020)
Established in 2015, Airy Rooms was first incubated at Traveloka, before finally becoming an independent business, according to various sources in the industry. However, Airy claimed to be Traveloka’s strategic partner in 2019, based on an interview with DealStreetAsia.
Running a business operation for almost 5 years, Airy has 2 thousand properties with more than 30 thousand rooms that can be rented, quoted from Tech in Asia. Unfortunately, because it was unable to cope with the impact of COVID-19 which had reduced occupancy rates, Airy reportedly fired about 70% of its employees last April.
Indonesia is one of the countries that have scored startups. The government encourages startups among young people. This is a strategy to reduce unemployment. However, founders must learn and be careful so their business won’t be one of the startups went bankrupt.
(Read also: The Latest Tech News; 5 Breakthrough Technologies in 2020)