Top 10 Famous Startups That Failed In India

Ever wondered why few start-ups that promised to bring progress and prosperity to this country failed?

If yes, this is exactly the article you have been looking for. This article contains the top 10 biggest startups that failed. Read on to know what happened to them.

1) Viu: 

A Hong Kong-based over-the-top (OTT) video streaming provider from PCCW Media, Viu was launched on 26th October 2015 as a subsidiary of PCCW.

Having a significant presence in markets across Asia, Africa, and the Middle East, India was one of the critical markets for Viu because of an increase in the expansion of the video streaming industry in India.

According to a report by PWC, India’s video streaming industry is all set to grow at a CAGR of 21.82% to reach Rs. 11,977 crores by 2023.

Having 6 million monthly active users in March 2017 from 4 million monthly active users in November 2016, Viu was at a 50% growth in about 4 months.

At present, Viu has not shut operations in India, but they might have to. Their top management has already left, and most of the employee strength is on notice. 

Reasons for failure: 

  • Could not submit to the competitive and complicated Indian market 
  • The top-level exits, downsizing of the team, rejection of new ideas or concepts were all hints to the shaky future of Viu India.
  • Limited budget prevented them from competing with giants such as Netflix and Amazon. 

2) Business Television India (BTVI): 

Also known as Bloomberg TV India, Bloomberg UTV, and UTVi), Business Television India (BTVI)  was an English business news channel. It was run by Business Broadcast News Pvt Ltd (BBNPL). 

On 1 August 2016, after a settlement between Business Broadcast News and Bloomberg LP to not renew their 7-year-old licensing contract in early January, the channel was rechristened as BTVI from Bloomberg TV India.

However, on 31st August, the channel suspended broadcast without mentioning any reason. 

Reason for failure: 

  • Grave financial crisis for months 
  • The management tried their best to rescue the situation but failed. BTVI was even in talks with a South India based businessman to raise funds but could not seal the deal due to liabilities and various other factors, following which promoters decided to shut down the operations.
  • Poor financial management 

3) Doodhwala: 

Established in 2015, Doodhwala was a hyperlocal delivery platform that promised to deliver milk and groceries directly to your doorsteps daily before 7 AM. 

The company believed that its unit economics were robust.

By lowering their delivery cost to Rs.3, Doodhwala placed itself uniquely in a very ambitious market where other players were struggling. The company failed even after raising a recent seed investment of $2.2 million from Omnivore, a venture capitalist firm in place of a minority stake in the company.

The new funding eventually reduced after the company raised an undisclosed amount in another Pre-Series A funding from Thomas Varkey, a partner at Stonehill Capital, USA.

  • Reasons for failure: 
  • Failed to raise subsequent finance 
  • Bigger competition such as BigBasket was consuming small businesses such as Pune-based RainCan and Bengaluru-based Morningcart for its micro-delivery service BBDaily, which made it difficult for Doodhwala to thrive. 


Offering first mile and last mile solutions to individuals and businesses, RUSSSH was an on-demand delivery service that was started in 2012. 

Although it was a very promising initiative, raising the funds became the point of concern. RUSSSH claims to have completed 300,000 tasks to date. Its delivery fleet consists of 60-80 executives at any given time.

About 150 tasks were processed daily, and that goes up to 200-odd during the festival season.

Reason for failure: 

  • Lack of capital
  • Lack of capital restricted it from offering a discount to its customers. 
  • It was difficult to operate the company by a single founder

5) Aditya Birla Idea Payments Bank (ABIPB): 

Aditya Birla Payments Bank Limited (ABPB) was among the four paid banks to get a license from RBI. This initiative was a joint venture between Aditya Birla Nuvo Ltd. and Idea Cellular in which Aditya Birla Nuvo Limited held 51 percent shares. The remaining 49 percent were with Idea Cellular. Finally, on 20 July 2019, Aditya Birla Payments Bank declared that it would Shut services subjected to the receipt of requisite regulatory consents and approval. 

Reasons for failure: 

  • High operating expenses occurring majorly because of large capital expenditures involved in setting up the initial infrastructure.
  • Preference for traditional banking methods in India 
  • Posed limitations such as investing only in government securities, which offer lesser returns as compared to other avenues such as mutual funds.
  • An unviable business models. 

6) Vodaphone M-Pesa: 

After successful growth in the telecom business in Africa with the support of M-Pesa, this duo decided to launch this venture in India in 2013. Vodafone Group said M-Pesa grew revenues by 20.7 percent to €0.75 billion and represented 12 percent of Emerging Consumer service revenues in fiscal 2019.

Reasons for failure: 

  • regulatory changes for the payments bank business and deterioration in the health of the telecom sector were the key reasons for the failure.
  • According to the SBI report, PBS face stringent regulations on both the asset and liability side. On the asset side, they face a blanket ban on any type of lending. On the liability side, they cannot accept deposits higher than Rs 1 lakh. Besides, the capital requirement is quite steep, with a capital to risk-weighted assets ratio of 15 percent.

7) Koinex

India’s largest cryptocurrency exchange company, Koinex was established in August 2017. 

According to Koinex’s site, there were over a million registered users, over 3 Billion Dollars of Trade volume, and over 20 million orders executed before they closed.

Reasons for failure: 

  • It was tough to operate a digital assets trading business in India, on account of the closure of bank accounts holding user deposits.
  • operations were regularly disrupted owing to delays by government agencies in clarifying the regulatory framework for cryptocurrencies.

8) Doctalk: 

In August 2016, Doctalk was started as an app that connects doctors with patients and also allows you to send messages to your doctor, store medical files, get detailed prescriptions, save your medications, etc.

Doctors faced the constant problem of patient follow up and calls mainly because the healthcare sector is backdated and mostly offline, in India. 

To make this process seamless, Krishna Chaitanya Aluru came up with the idea of Doctalk. It built an electronic medical record (EMR) solution, which helped doctors write prescriptions digitally and provide customized prescription templates. Doctalk had raised roughly $5 million from Matrix Partners and Khosla Ventures and was also backed by Y Combinator, Vy Capital, Liquid2Ventures, Venture Highway, Altair Capital, and some angel investors.

Reasons for failure: 

  • Inability to pivot 
  • did not have a back-up plan 
  • The planned transition into the electronic medical record solution (EMR) business from the existing business model didn’t yield the acceleration that is needed 
  • diversion from the health-tech concept and removal of most of its employees. 

9) Loanmeet: 

 After realizing that a large section of borrowers could not get personal and business loans from banks and other financial institutions due to lack of credit history, insufficient documentation, or other reasons, Sunil Kumar, the co-founder, decided to launch Loanmeet in 2015. 

 Loanmeet attempted to revolutionize banking at the grass-root level. it used to finance working capital requirement, B2B marketplace financing, cash credit line, and channel financing in the range of Rs 5,000 to 5 lakh for short term period ranging from 15 days to 9 months.  It raised an undisclosed amount of seed funding from Chinese investors and entrepreneurs Cao Yibin and Huang Wei, and Madhusudan, CEO of KrazyBee.

Until Jan 2017, Loanmeet was growing well at about 50% month over month.

Reasons for failure: 

  • Inability to sustain the competition
  • failed to raise further investment

10) Air India:

Once upon a time, serving as the largest airline in the subcontinent, Air India accounted for 5% of total traffic before the Government of India bought 91% of Air India shares. Started in July 1979 as Tata Airlines, Air India is India’s national aviation company and is known to be the third most significant airlines in India.

Reasons for failure: 

  • Government mismanagement 
  • poor decisions 
  • financial crisis
  • merger with Indian airlines incurred a loss of Rs.770 crore in 2006-07, which increased to about Rs.7200 crore by March 2009.
  • Excessive employees

Even though being the most favorable country for start-ups and the third-largest business ecosystem, India lacks creativity and authenticity which is the topmost reason for scoring the lowest on the Global Innovation Index. Apart from that, premature scaling and not solving a market need are among the prime reasons why start-ups fail in India.

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