The startup ecosystem contains constant innovation, risk and change. For every success story, there are countless startups that, despite their potential, fail to make it. In 2024, several Indian startups that had once shown great promise were forced to shut down. While the reasons for these closures varied, common threads of financial instability, competitive pressure and market misfit emerged across the board.
In this article, we’ll explore the rise and fall of five prominent Indian startups, examine their challenges and what their stories teach us about the volatile nature of startups.
Toplyne: A SaaS solution that couldn’t meet innovation’s demands.
Toplyne, a SaaS startup, initially gained traction with its plug-and-play solution designed to help product-led companies convert freemium users into paying customers. It quickly became a favorite among businesses looking for simple, scalable conversion solutions. Backed by top investors like Tiger Global and Peak XV, Toplyne raised $17 million and achieved a valuation of $80 million at its peak.
However, despite early success, Toplyne’s downfall came swiftly due to its failure to innovate beyond its initial offering. As more sophisticated conversion optimization tools flooded the market, Toplyne’s product began to look outdated. The company struggled with scalability and couldn’t maintain the same level of customer satisfaction it once did. Internal leadership conflicts, including the departure of co-founder Rohit Khanna, further destabilized the company.
In a LinkedIn post, co-founder and CEO Rishen Kapoor admitted, “We’ve made the tough decision to wind down operations and return capital to our investors. Despite our best efforts, we couldn’t reach the scale or product-market fit we aimed for.”
Koo: The social media app that couldn’t compete with X
Once hailed as India’s answer to Twitter, Koo made waves when it launched in 2020. The app quickly gained traction, capitalizing on rising tensions between Twitter and the Indian government. Koo provided a platform for Indian voices, even gaining endorsements from government officials and celebrities like Kangana Ranaut. By offering support for Indian languages, it appeared to have an edge in India’s diverse linguistic landscape.
However, Koo’s ascent was short-lived. By 2024, it faced insurmountable pressure from X (formerly Twitter), which redefined its platform under Elon Musk’s leadership. With X’s global infrastructure and user base, Koo struggled to offer a competitive alternative. Users and influencers who had briefly adopted Koo migrated back to X due to its wider reach, more advanced features and superior user experience.
As Koo’s monthly active user base dwindled and revenue stagnated, the company made the tough decision to shut down and return funds to investors. Koo founders’ ‘emotional note‘ on the app’s shutdown said, “Here’s the final update from our end. Our partnership talks fell through and we will be discontinuing our service to the public.” The note also explained how social media business is tough to build alongside international brands with superior technology and millions of funds.
Nintee: The ambitious digital health startup that closed its doors in 2024.
Nintee, a digital health startup founded by Paras Chopra and backed by prominent investors like Peak XV Partners and Kunal Shah, has regretfully announced its closure just a year after launch. The company, initially focused on using AI to help individuals build healthier habits, attracted a passionate niche but struggled to achieve the scale required for venture capital-level growth.
In a candid blog post, Chopra explained that a large portion of the funding remains unused and will be returned to investors in the coming weeks. Nintee attempted to pivot to education-focused initiatives, but faced significant challenges in scaling a consumer app in today’s highly competitive digital space. Despite these efforts, the startup ultimately decided to cease operations due to scalability issues and the tough consumer app environment.
As a part of the shutdown, all employees were laid off with four months of severance pay and Chopra has offered them positions at his other venture, VWO, a profitable website-testing software company.
Bluelearn: The ed-tech challenger that couldn’t keep up
Bluelearn, an ed-tech startup launched in 2020, aimed to create an interactive learning platform. The platform wanted to help students acquire real-world skills through peer-to-peer learning and community-driven experiences. It gained popularity in its early stages, especially during the pandemic, when online learning surged. With a youthful vibe and innovative teaching methods, Bluelearn positioned itself as an ed-tech disruptor.
However, by 2024, Bluelearn was grappling with significant challenges. As the ed-tech market became dominated by giants like PhysicsWallah, smaller platforms struggled to differentiate themselves. While its innovative approach attracted early adopters, it failed to scale beyond its niche audience.
Financial constraints compounded the issue. With limited revenue streams and heavy operational costs, Bluelearn couldn’t sustain its growth trajectory. Founder Harish Uthayakumar shared in a LinkedIn post, “We realized that building a venture-scale business with Bluelearn was tough. We had been very conservative with capital, allowing us to return 70% of the capital we raised back to investors.”
Conclusion
2024 has proven to be a challenging year for Indian startups, with even the most promising ventures facing closures. While the paths to demise are different for each of the startups, some of the common themes are intense competition, financial challenges and difficulty in scaling. For founders and investors alike, these stories serve as a stark reminder of the complexities of the startup world.
While the journey may not have ended as planned, these startups’ decisions to shut down and return investor capital speak to a growing trend of responsible entrepreneurship. In a landscape where burning through cash is no longer seen as a badge of honor, these startups offer a valuable lesson: knowing when to step back is sometimes the most courageous decision a founder can make.
