Remembering the Startups We Missed in 2023

Not every startup The downfall is an FTX or Theranos. They all neither burn so brightly nor explode so brilliantly. Often, there will be no high-profile court case and prison sentence. Amanda Seyfried won’t play you in a movie made for Hulu.

The story of most startup failures is much less exciting. The timing is not right, the funding is gone, the runway is gone. Recently, a number of macroeconomic factors have also come into play. These past few years have been particularly brutal for startup land. According to a recent PitchBook survey, “about 3,200 private venture-backed U.S. companies have gone out of business this year.”

Combined, those companies raised north of $27 billion. Even more tellingly, this is a figure that does not include companies that failed after going public or were able to find a buyer. After all, this would really stretch the definition of “startup.”

It’s also worth noting that “failure” is subjective. Is bankruptcy eligible? This is certainly not a good sign regarding the health of your company, but many companies have managed to bounce back to some extent. This particular question has been the cause of much discussion around the old TechCrunch virtual watercooler.

For the article titled “The Startups We Lost”, I chose to limit the list to startups that have – to the best of our knowledge – reached a point of no return. Pushing up the daisies. Curiosity for the Fjords.

As the final days of the calendar wind down, let’s take a moment to remember some of the startups that didn’t make it.

braid

Established in 2019

Image Credit: braid

In October, four-year-old startup Brad, which aimed to make shared wallets more mainstream among consumers, announced it was shutting down. Founded in January 2019 by Amanda Peyton and Todd Berman (who departed in 2020), San Francisco-based Bradt planned to offer friends and family an FDIC-insured, multiuser account designed to “pool, manage, and spend “Doing” was designed to be easy. Money together.” Brad raised a total of $10 million in funding “across multiple rounds” from Index Ventures, Accel and others.

What was refreshing about this finale was Peyton’s candor about the cause of Brad’s demise. In a blog post, Peyton said Brad’s closed its doors in September, and outlined his experiences – and mistakes – in building the company, ultimately realizing it was not going to be a viable business venture. An estimated 91% of startups fail. If more founders shared their experiences like Peyton so that others could learn from them, perhaps this number would go down.

cloudnordic

Established in 2007

Image Credit: TechCrunch (screenshot)

CloudNordic may not be a household name, but a devastating ransomware attack on its systems thrust the company into the spotlight — and ultimately spelled its demise. The Danish cloud host provider shut down this year after nearly two decades of operation following a ransomware attack that compromised the company’s systems and destroyed all of its customers’ data. The company said that it does not have the money to pay the hackers and even if it does, it will not happen. Left with no option, the company closed its doors.

Convoy

Established in 2015
Over $1 billion raised

Image Credit: Convoy

The digital freight broker abruptly shut down in October 2023, just eight months after the Seattle-based company raised $260 million in fresh funding, bringing its valuation to $3.8 billion. Convoy, founded by CEO Dan Lewis and CTO Grant Goodell, former Amazon and Google executives, is here to stay.

Supply chain logistics platform Flexport acquired the assets of defunct Digital Freight Networks with plans to restore Convoy’s trucking logistics services to customers. Flexport did not acquire the business or any of its liabilities, but its CEO said it planned to retain “a small group of team members from its core product and engineering team”.

daylight

2020 established
$20 million raised

Image Credit: daylight

In May 2023, LGBTQ+ banking platform Deloitte, which had raised $20 million in funding, announced it would shut down and cease operations on June 30. The announcement came months after NY Magazine published an explosive feature on the neobank. The article is based on Deloitte, whose seed and Series A fundraises were covered by TechCrunch here and here respectively. The NY Mag article details a lawsuit filed by three former employees, as well as alleged fabrications and inappropriate behavior on the part of co-founder and CEO Rob Curtis.

In a blog published in May, Curtis said he thinks “now is the right time to exit this market.” We heard in October that the lawsuit had been dismissed by a federal court and Deloitte had been acquired, but Curtis declined to comment further when we contacted. It was a disappointing result but it highlighted the challenges of neobanks targeting specific demographics. At the beginning of the COVID-19 pandemic, we saw a flood of startups raising money, but since then, things have been relatively quiet. Part of the challenge is to provide differentiated services that are truly unique to a certain community. Since the closure of Daylight, Curtis has moved on to tequila-related ventures.

fuzzy

Established in 2016
$80 million raised

Image Credit: fuzzy

Some startups die long, long deaths. Not fuzzy. The pet care telehealth startup was here one day and gone the next. In February, the company was reportedly promoting its raise on an internal Zoom call. Within a few months the company closed its business. Fuzzy’s site was taken down without any warning being issued to customers.

Hearing things, even some top executives were left wondering what really happened to the startup. This certainly hasn’t stopped the competition from attempting to take advantage of Fuzzy’s death.

irl

Established in 2016
$200 million raised

Image Credit: irl

IRL the meltdown was a terrible mess. In 2022, the event organizing social app laid off a quarter of its 100 or so employees. Co-founder and CEO Abraham Shafie blamed it on extremely volatile markets, while saying the company’s cash runway will last until at least 2024. Then this June it closed.

No social network is completely devoid of bots, but an internal investigation by its board of directors found that about 95% of its 20 million active monthly users are such accounts. In a lawsuit filed last month, IRL’s co-founders accused their investors of falsifying that figure to cause losses to the firm, which was previously valued at $1.17 billion.

ironnet

Established in 2014
$400 million raised

IronNet founder Keith Alexander at TechCrunch Disrupt in 2017. Image Credit: Noam Galai/Getty Images

IronNet, founded by former NSA Director Keith Alexander, was a once-promising cybersecurity startup, raising more than $400 million in funding at its peak. But in the end, IronNet was no match for market forces (and poor leadership). After a difficult public journey and a round of layoffs, Alexander stepped down as CEO in July and was replaced by the chairperson of the company’s largest investor. Ironnet struggled to stay afloat, but it lasted only a few weeks before laying off everyone else and filing for bankruptcy.

mandolin

2020 established
$17 million raised

Image Credit: mandolin (Opens in a new window)

Many startups had to struggle with the pandemic. Others flourished. Founded in June 2020, the concert livestreaming platform was the right startup at the right time. After all, it was just a few months ago that venues across America closed their doors indefinitely. Mandolin’s subsequent rise to prominence was rapid, playing big-name acts with artists ranging from Lil Wayne to the Lumineers.

A year after its founding, the Indianapolis-based company raised a $12 million Series A following a $5 million seed round last October. In 2022, it seemed as if the platform was still thriving, even as venues reopened across the country. The mandolin diversified other aspects of the live music experience, including venue participation and sales.

However, this April, the startup announced on Instagram that it was closing up shop. “After 3 incredible years,” it said, “we are sad to announce that Mandolin will no longer offer the digital fan experiences you love.”

Weave

Established in 2008
$597 million raised

Image Credit: Weave

Real estate developer Weave, which turned tech-enabled prefab homebuilder, was on the verge of closure as of November after reaching unicorn status last year, according to multiple reports. Calcalist reported on November 26 that the company – which raised a total of $600 million, of which $400 million was secured in March of 2022 – will have to close up shop after the “abrupt cancellation of its capital raising initiative.” Later that week, it was reported that Weave was “undergoing liquidation.”

This was a slightly surprising turn of events, considering how much money the company had raised even two years earlier. The closure wasn’t the first startup failure for Weave co-founders Heller and Ami Avrahami. One of his proptech ventures, Really, is slated to close in August 2022 after raising more than $290 million in debt and equity funding. Zeev Ventures was an investor in both companies.

zestmoney

Established in 2015
$121 million raised

ZestMoney’s founders resign as Goldman Sachs-backed fintech struggles to raise funding. Image Credit: zestmoney

In mid-May, Manish reported the fact that the founders of ZestMoney had resigned from the startup. The Indian fintech, which had the ability to provide small ticket loans to Internet customers for the first time, once received the backing of several high-profile investors, including Goldman Sachs. By December, Manish had reported that Zestmoney was shutting down after unsuccessful attempts to find a buyer.

The Bengaluru-headquartered startup – which also counts PayU, Quona, Zip, Omidyar Network and Ribbit Capital among its backers – employs around 150 people and has raised over $130 million in its eight-year journey.

Juice

Established in 2015
$445 million raised

Image Credit: Juice

“Pizza was our prototype,” co-founder and CEO Alex Garden told me in 2018. Three years after its founding, Zoom made a major pivot. Although it will always be remembered as the pizza robot startup (that’s a tough call to make), the Southern Californian company cast a wider net. At first it was exploring non-pizza delivery trucks. Two years later, it switched to sustainable food packaging.

Throughout its many lives, one certainly can’t pin Zoom’s ultimate demise on a failure to adapt. Nor was it a lack of funding, as the company had raised nearly half a billion dollars over its eight-year history. This includes a 2018 SoftBank round of $325 million, which valued the company north of two billion.

Zoom liquidated its assets in early June.