Remembering the startups we lost in 2019 by Brian Heater, Kate Clark, Anthony Ha

TL;DR - A list of 14 once-promising or successful startups that failed in 2019 even after raising lots of outside capital

Helpfulness - 4

Tags - startups failure, outside capital, outside investment, venture capital, Anki, Chariot, Daqri, HomeShare, Jibo, MoviePass, Munchery, Nomiku, ODG, Omni, Scaled Inference, Sinemia, Unicorn Scooters, Vreal

Questions answered:

  • What are some examples of startups that failed even after raising lots of outside capital?

Summary:

  • Anki (2010 - 2019, raised $180 million):
    • Released Cozmo (AI toy robot) as a result of large investment, including the hiring of ex-Pixar and Dreamworks animators to craft a high range of emotions in the robot’s eyes
    • Shut down despite selling 1.5 million robots and “hundreds of thousands” of Cozmo models.
  • Chariot (2014 - 2019, raised $3 million, acquired by Ford in 2017)
    • A shuttle startup hoping to reinvent mass transit with a fleet of vans for commuters
    • Shut down by Ford two years after the acquisition - “in today’s mobility landscape, the wants and needs of customers and cities are changing rapidly.”
  • Daqri (2010 - 2019, $132 million)
    • A high-flying, heavily funded AR headset startup
    • Shut down and completed an asset sale - one of many in the sector that failed to court enterprise customers and compete with Magic Leap, Microsoft, and others.
    • A large PE was considering financing Daqri ahead of a potential IPO, but backed out as the technical realities facing other AR companies came to light.
  • HomeShare ($4.7 million)
    • Aimed to tackle the challenge of rapidly rising housing costs by matching roommates who shared apartments split into “micro-rooms”.
  • Jibo (2012 - 2018/2019, $72.2 million)
    • Another consumer special robots manufacturer after Anki
    • Shut down despite a successful crowdfunding campaign and a healthy amount of venture capital raised
  • MoviePass (2011 - 2019, $68.7 million, acquired by Helios and Matheson in 2017)
    • A ticket subscription service
    • “There seemed to be a new disaster for MoviePass every week; it hemorrhaged money, limited its service, experienced outages, borrowed even money, was forced to enter a kind of zombie state and had a massive data breach.”
  • Munchery (2010 - 2019, $125 million)
    • A meal delivery startup
    • Accused of taking advantage of its vendors in its final hours, knowingly allowing them to continue making deliveries that it could not pay for.
  • Nomiku (2012 - 2019, $145,000)
    • Bay Area-based food startup which helped pioneer the consumer sous vide category, only to see the market flooded by competing devices
    • In multiple successful Kickstarter (competitor) campaigns totaling $1.3 million, the backing of Samsung Ventures, and an attempted pivot into meal plans, the company just could not survive.
  • ODG/Osterhout Design Group (1999 - 2019, $58 million)
    • A pioneer in the AR glasses space
    • Burned through its $58 million funding in less than a year and could not pay employees.
    • Lost half of its workforce as it sought loans to pay back employees by ealy 2018.
    • Acquisitions from several large tech companies such as Facebook and Magic Leap fell through (ended up selling its patent).
  • Omni (2014 - 2019, $35.3 million)
    • Began as a physical storage company and attempted to pivot after selling off its physical storage operations to Clutter (competitor).
    • Failed to build a white-label software platform that would allow brick-and-mortar merchants to operate their own businesses for renting and selling products.
  • Scaled Inference (2014 - 2019, $17.6 million)
    • Founded by former Googlers Olcan Sercinoglu and Dmirtry Lepikhin
    • Made headlines in 2014 with a plan to build machine learning and AI technology similar to what’s used internally by companies such as Google and making it available as a cloud service that anyone can use.
    • Attracted investors such as Felicis Ventures, Tencent, and Khosla Ventures.
    • Shut down as a result of a lack of funding due to insufficient commercial traction.
  • Sinemia (2015 - 2019, $1.9 million)
    • Seemed at first to be a more sustainable competitor than MoviePass.
    • Announced its ending of US operations after being plagued by subscriber complaints, lawsuits around app issues, hidden charges, and policies for shuttering accounts.
    • Did not say it was shutting down entirely; much of its staff was based in Turkey, however, its website has since been offline.
  • Unicorn Scooters (2018 - 2019, $150,000)
    • One of the first fatalities of the electric scooter craze of 2018
    • Reportedly spent too much money on Facebook and Google ads.
    • Shut down with no money left over to issue refunds for over 300 of its $699 scooters that had been ordered.
    • Had completed the Y Combinator startup accelerator only a few months before its shutdown.
  • Vreal (2015 - 2019, $15 million)
    • An game-streaming platform which aimed to let VR users explore the worlds in which live-streamers were playing
    • “Unfortunately, the VR market never developed as quickly as we all had hoped, and we were definitely ahead of our time.”

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