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Embarking on the startup journey is no walk in the park! It demands months, even years, of meticulous planning and an avalanche of funds to get things off the ground. Here’s the glimmer of hope—investors prowl the market eagerly seeking promising startups to back, those with the spark to thrive. Yet, let’s face the raw truth: no matter the cash influx, there are no foolproof guarantees of triumph. Surprisingly, even some with eye-watering multi-million-dollar funding haven’t struck gold. It’s a wild ride in the startup world, Here are formerly high-flying startups that squandered their multi-million-dollar budget:
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Funding: $22.2 billion
WeWork was one of the most highly valued startup companies founded with a vision to provide flexible solutions and spaces for people to get together in the perfect work environment. The startup’s founder and CEO, Adam Neumann, had high ambitions and claimed the company was on a path for unimaginable profit and worldwide dominance. However, self-dealing, mismanagement, and bizarre behavior led to the startup’s valuation plummeting by over 70% and losing $22.2 billion worth of funding.
Funding: $1.4 billion
Theranos Inc. was a healthcare technology startup that aimed to revolutionize the blood-testing industry. The startup raised $1.4 billion in funding from private investors and venture capitalists. With high aims and claims by the startup’s CEO, Theranos looked to have tremendous success. However, it was discovered that the claims were fraudulent and dubious, and the tests performed by the startup were not legitimate. The startup saw an eventual downfall, losing all its funding and the imprisonment of the CEO for fraud.
Funding: $214 million
Goldfinch Bio is a biotechnology startup that looked to develop and discover therapies to treat chronic kidney diseases. With innovative thinking and science, the startup received $214 million in funding. However, even with a multimillion-dollar budget, the CEO of the startup declared that the startup would be closing shop due to running short of money. The startup’s decline was termed harsh and swift by many. With the therapies’ development being expensive and failing at multiple stages, Goldfinch Bio had to shut down soon.
Funding: $160 million
Mindstrong is a mental health startup that raised $160 million in funding from different investors. The startup aimed to provide low-cost, high-quality mental health care to deal with the mental health crisis. The startup used high-tech biomarkers and AI to track mental health symptoms which also came at a high cost of maintenance. Not being able to profit from the low fees charged to the patients led to the startup’s downsizing and eventual shutting down.
Funding: $107 million
Freshly is a startup that delivers healthy cooked meals to customers through a single delivery for weekly meals. The startup’s vision was enough to help them acquire $107 million in funding. However, despite multimillion-dollar financing, the startup had to halt direct-to-consumer meal deliveries as it faced multiple economic challenges. With the end of the pandemic, consumers chose to dine out over subscription services like Freshly, which did not fare well for the startup.
Funding: $500 million
Argo AI is an autonomous driving tech startup that built software, hardware, maps, cloud-support infrastructure, etc., to help power self-driving vehicles. With $500 million in funding, the startup had the finances and support to become one of the biggest companies in the driving tech industry. The startup could not attract new investors, one of the main reasons the management team announced that Argo was shutting down. The supporting companies shifted resources to developing advanced driver assistance systems, leading to a close on the dream of autonomous driving.
Funding: $1.3 billion
CommonBond is a fintech business that refinances graduate and undergraduate student loans for university students in various programs. With $1.3 billion in funding from investors, the startup did not find success and eventually shut down.
Funding: $292 million
Reali is a real estate fintech startup that saw a boom in the home buying and real estate tech sector and was regarded as a pioneering company to offer different kinds of financial programs to homeowners. With interest rates and inflation growing, the real estate industry has faced a lot of casualties leading to a significant slowdown in the housing market. This adversely impacted the startup, which soon began its shutdown as the market worsened. Although it had $292 million in funding, Reali couldn’t overcome the lousy housing market.
Funding: $1.8 billion
Snapdeal is an online marketplace launched as a platform where consumers can discover all kinds of deals. The startup got $1.8 billion in funding from investors and venture capitalists and was predicted to overtake rival companies in the same industry. Alas, months passed, and Snapdeal was forced to cut spending as funds dried out, leading to the startup’s downward spiral.
Funding: $1.2 billion
Excellent Tuan is an e-commerce platform providing consumers fresh produce, beverages, daily supplies, etc. It raised $1.2 billion in funding and wanted to expand the business into smaller towns. However, as the expansion began, costs rose disproportionately while goods were sold below cost price to entice customers. This caused fake buyers to appear to ensure sales targets were met, eventually, alarming regulators who fined the startup for violations. This led to business operations being suspended and the loss of funds for the startup.
Funding: $125 million
Fast is a startup that provided consumers with one-click online checkout products, attracting many investors who helped the startup raise $125 million in funds. Looking to change the world of online commerce, Fast was looking to provide consumers with easy checkout across a range of stores. However, the startup faced a collapse, and it couldn’t secure any fundraising prospects.
Funding: $366 million
LendUp is a fintech startup that directs lending finances for online personal loans. The business received $366 million in backing from some of the greatest names in venture capital. LendUp has ceased its loan operations owing to a penalty that the startup had to pay for a lawsuit accusing it of violating regulations. To resolve the allegations against the startup, LendUp was prohibited from making new loans, collecting outstanding loans, and selling consumer information, which all led to the announcement that it would have to cease all operations.
Funding: $1.5 billion
Once listed on “Top Startup Companies,” Katerra is a tech-driven off-site startup company that sought to revolutionize the construction industry by using factories to build modular apartments. Raising $1.5 billion in funds, Katerra received investments from some top investors and venture capitalists. However, the funds for the startup didn’t last, as the startup soon faced bankruptcy.
Funding: $1.75 billion
Quibi raised a staggering $1.75 billion to fund their startup, a short-form, and serialized video content streaming platform. The startup could not attract a large audience and had to shut down operations only six months after its launch. Knowledgeable and experienced executives founded Quibi and were even able to attract big Hollywood names and big investors to back the startup.
Funding: $330 million
Essential Products is an electronics startup with $330 million in funding from great investors and venture capital. However, only three years after Essential Products unveiled its first smartphone, the startup announced it would shut down operations. Although the startup showed a promising future in the hardware technology industry, its first product did not sell well, and plans for developing more products never materialized. The challenges the startup faced as a consumer electronics startup were too much, leading to the closure of operations.
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