Jan 01, 2024
Alongside the year 2023 that just breezed us past, there also hovered a cloud of some life-transformative startups that kept dripping from above one after the other, falling at the barren land on which they failed to grow something and reap fruit.
That being said, in 2023 the world witnessed a downward flight of startups that died of a lack of funding and various other factors that could prove the root cause for more startup closures in future as well.
Along with all the usual culprits behind startup failure, a slowdown in the venture capital market has played a role in shutting down approximately 3,200 VC-backed startups in 2023 so far.
Read more: Revenue growth vs profitability: Which one should startups prioritise?
Some experts predict a mass extinction of startups looming on the horizon, and we’ll see startups shutting down in even higher numbers towards 2024.
Among those dried-up ventures were also some profitable companies that ran out of venture funding to sustain their operations.
Here are some of the greatest startups that we lost in 2023 and will stay in our memories.
Startups that died in 2023
Braid
Braid, — founded in 2019 and raised $10 million in total with their biggest investors being Index and Ventures Accel — announced its closure in October 2023. Braid was the startup that standardised shared wallets. The San Francisco-based company was founded in January 2019 by Amandine Peyton and Todd Berman, who left the company in 2020. The objective of Braid was to provide friends and family with an FDIC-insured multi-user account that would make it easier “to pool, manage and spend money together.”
CloudNordic
CloudNordic, a Danish cloud hosting provider, ceased operations in 2023 after operating for nearly twenty years. The company gained prominence due to a devastating cyber attack that not only compromised its systems but also resulted in the loss of all customer data, ultimately forcing the company to shut down. With no money to pay the ransom, CloudNordic shut down.
Convoy
Established by CEO Dan Lewis and CTO Grant Goodale, both former executives at Amazon and Google, Convoy, a digital freight broker, shut down in October 2023 eight months after the Seattle-based company secured $260 million in new funding, taking its valuation to $3.8 billion. While Flexport did not acquire the company or its obligations, its CEO said it planned to retain “a small group of team members from their core product and engineering team.”
Daylight
Daylight, an LGBTQ+ banking platform, disclosed its closure in May 2023 after securing $20 million in funding. The decision followed the publication of a revealing feature by NY Magazine, which focused on the new bank. The article delved into a lawsuit filed by three ex-employees and highlighted alleged falsehoods and inappropriate conduct attributed to co-founder and CEO Rob Cur.
Fuzzy
Founded in 2016 and raised a total of $80 million in funding, Fuzzy was a pet care telehealth startup that boasted its growth on internal Zoom calls in February. Within months, the company closed up with its site taken down without any warning issued to customers.
IRL
IRL was a social media platform for event planning that closed in June 2023. An internal inquiry found that around 95% of its 20 million monthly active users were bot accounts. Concurrently, the co-founders charged that investors had fabricated the amount to undermine the company, which had a $1.17 trillion valuation at the time.
IronNet
Former NSA director Keith Alexander in 2023 founded IronNet, a cybersecurity startup that secured over $400 million in funding in its prime. However, the company ultimately succumbed to market pressures and inadequate leadership, leading to the termination of the remaining workforce and the subsequent filing for bankruptcy just a few weeks later.
Veev
Veev was a 15-year old home building startup, whose biggest backer was Zeev Ventures, that reached its zenith in November last year. The company, having raised $600 million in total, came close to shutting down after an “abrupt cancellation of a capital-raising initiative.”
Zume
Zume was founded in 2015, known as the pizza robot startup. It initially ventured into non-pizza delivery trucks, following its shift into a sustainable food packaging firm two years later. Zume nearly raised $500 million in eight years, including a 2018 SoftBank round of $325 million.
