Raising lots of money isn't always a sign of success
9 Jul, 2017BUSINESSINSIDER.COM
Where there's life, there's death, and Silicon Valley is no different.
For every billion dollar unicorn, there are endless numbers of start-ups that have passed into the ether — laying off their engineers in matching, branded t-shirts; closing down their game rooms filled with ping-pong tables; and leaving heartfelt goodbye notes for customers on their soon-to-be defunct websites.
We're halfway through 2017 and already a group of startups that together raised $1.48 billion have shut down. That is a LOT of money!
From February's shuttering of Beepi, a used car exchange once valued at $560 million, to this week's closure of gadget maker Jawbone, which was once worth $3 billion, these are the start ups we've lost so far in 2017, and there's probably more on the way.
Jawbone, 1997 — July 2017
Capital raised: $1 billion
Peak valuation: $3 billion
Jawbone was a pioneer in wearable devices, with a focus on fitness trackers and portable speakers, but it struggled to pay its vendors. On Thursday, Business Insider confirmed that Jawbone is liquidating its assets. Founder and CEO Hosain Rahman has started a new company called Jawbone Health Hub, in the healthcare hardware and software space.
Beepi: 2013 — February 2017
Capital raised: $150 million
Peak valuation: $560 million
Beepi, the website that brought together car buyers and used-car sellers, shuttered in February. Both Fair.com and used-car dealer DGDG considered buying Beepi, but ultimately decided against it. In the end, Beepi ran out of money.
Quixey: 2009 — February 2017
Capital raised: $133 million
Peak valuation: $600 million
Quixey, a mobile search engine that was able to crawl apps, laid off most of its staff at the end of February. It seems the company never found its footing or a steady revenue source, despite replacing its founding CEO, Tomer Kagan, in March 2016.
Yik Yak: 2013–April 2017
Capital raised: $73 million
Peak valuation: $400 million
Yik Yak — the anonymous social media app that was at the center of several college harassment scandals — announced its closure on April 28, after struggling to keep users on its platform. The payment company Square acquired the Yik Yak engineering team days before the startup closed shop for a cool $3 million.
Maple: 2014 — May 2017
Capital raised: $29 million
Peak valuation: $115 million
Maple, a New York City-based food delivery service, closed down on May 8. With the backing of David Chang, the chef and founder of high-end restaurant company Momofuku, Maple was a darling in the foodie space. Its unique model included both tips and delivery charges in its prices, and each meal came with a free gourmet sugar cookie.
Customers knew something was up when Maple replaced its sugar cookies with a photograph of a cookie on a brochure. Some of its team was acquired by Deliveroo, a larger UK-based food delivery platform.
Sprig: 2013 — May 2017
Capital raised: $57 million
Peak valuation: $110 million
Sprig, a San Francisco-centric service that delivered high-quality meals on demand, made its last delivery on May 26. Sprig focused on delivering within 15 minutes and offering locally sourced produce. But its business model wasn't sustainable when compared with those of lower-overhead competitors like Seamless.
In a note on Sprig's website, founder and CEO Gagan Biyani wrote that"the complexity of owning meal production through delivery at scale was a challenge."
Hello: 2012 — June 2017
Capital raised: $40 million
Peak valuation: $300 million
Hello was the company behind the Sense sleep tracking sensor, which was designed to sit in users' rooms, rather than on their wrists. It closed in June after failing to find a buyer.
Hello launched on Kickstarter, and even found a home for Sense on the lucrative shelves of retailers Target and Best Buy. But such successes weren't enough to prevent Hello from saying goodnight for good.