The failure of a startup is quite common, especially in the constantly evolving macro conditions that have created a harsh economic environment. Given that the lifeline of startups – funding, has dropped dramatically this year, many companies dropped their business ambitions and collapsed.
As per CB Insights, the global funding in Q3 of this year was $74.5 billion, which is less than half of the quarterly funding for the whole of 2021. It notes that funding decreases 34% quarter-over-quarter. In Silicon Valley, funding fell to its lowest level since the last quarter of 2019.
While many startups have managed to endure the economic downturn so far, some got acquired, a few of them collapsed in 2022. Here, we have listed some of the biggest startup failures of this year.
After over a decade of trying to make flying cars a reality, California-based Kitty Hawk failed to take off in September this year. The Larry Page-backed startup was founded by Damon Vander Lind in 2010, who parted ways in 2021. Last year, the company cancelled its original Flyer project and laid off most of the 70-person team that had worked on the aircraft.
After Vander Lind’s departure, it appeared that Kitty Hawk was ready to double down on its vertical take-off and landing aircraft. It acquired 3D Robotics and roped in Chris Anderson as chief operating officer. Despite these efforts, the ambitious flying car startup came to a grinding halt.
Manchester-headquartered neobank Bank North came winding down in April after it failed to raise a new funding round. The company had been trying to raise a £50 million Series B at the time of its collapse. The company announced its end soon after it closed a crowdfunding campaign held on Crowdcube. Though it secured its banking licence last year, the business had to secure new funding to comply with its licence.
Founded by Jonathan Thompson in 2018, Bank North offered loans of up to £5 million, development finance, bridge funding, and more.
An e-bike- and scooter-sharing startup based in Miami and co-founded by Olympics gold medalist Usain Bolt shut down operations in August, highlighting recent problems in the micromobility sector. It vanished without a trace from several of its U.S. markets. The departure of Bolt Mobility was abrupt, leaving abandoned equipment across cities, and unanswered calls and emails.
Bolt Mobility lost its permit to operate in Portland in July due to issues with insurance and outstanding fees. It was said that around 100 bikes were left inoperable and with dead batteries.
During the pandemic, Airlift, a mass-transit startup that operated an Uber-like service for buses in Pakistan, was in a tight spot. Founded by Usman Gul, Ahmed Ayub and Meher Farrukh in 2019, the company pivoted to instant delivery, to meet the needs of millions stuck at home. This move paid off and Airlift became the most valuable Pakistani startup and secured $85 million in a single funding round.
However, two years later, in another economic shift, Airlift failed to repeat history. In July, the company announced that it was shutting down and blamed the global recession. The rapidly deteriorating conditions in the global economy resulted in a complete shutdown of the company, which rattled Pakistan’s nascent startup ecosystem.
In May this year, Israeli AI startup BeyondMinds notified its 65 employees that it is shutting down and that they will be laid off. Its investors suggested the company to shut down due to the downturn in the tech market and the belief that it will not be able to complete another funding round and grow further.
BeyondMinds was founded by Roey Mechrez and Rotem Alaluf in 2018 in Tel Aviv. Its CEO Alaluf disagreed with the decision to shut down and founded a new company named Wand.ai with other staff from BeyondMinds. Currently, this company is in stealth mode.
Earlier this year, Berlin-based security token startup Neufund announced its plans to freeze its fundraising campaigns and sideline future tokenised equity offerings. Founded by Marcin Rudolf, and Zoe Adamovicz in 2016, the security token project could not continue to operate in a regulatory grey area.
Neufund said there were no compliance issuers or problems with its tech but the regulatory system was not to be equipped yet to support innovative fintech companies.
Binance Singapore withdrew its application for a license to operate a cryptocurrency exchange. It also announced that it will shut down its trading platform in the city-state by mid-February. In an email statement, the company stated that registrations, crypto and currency deposits and trading on Binance Singapore’s platform will be closed with immediate effect.
Binance was established in 2017 by Zhao and He Yi, who together built it into the world’s largest cryptocurrency exchange by trading volume.
Late last year, ING was in plans to shut down Payvision, which was founded by Rudolf Booker in 2002 in the Netherlands. It is a controversial international card acquirer and payments platform that the Dutch bank ING acquired in 2018 for €360 million.
A rival to Adyen and Worldline, Payvision has been mired in controversy relating to dubious business practices undertaken prior to its acquisition. It was held responsible for processing hundreds of millions of euros in payments that were generated from investment scams.
Periscope, the app that popularised live streaming from smartphones, was shut down in April. Twitter announced the impending shutdown in December and stated that its usage was declining. Furthermore, the app had been in an “unsustainable maintenance-mode state” for a while.
At the time of this announcement, the Periscope website will remain online with an archive of public broadcasts. Its users will still be able to download their data through Twitter.
Anki, a robotics company from San Francisco, which produced and sold AI-powered toys such as Anki Drive, Overdrive, Cozmo, and Vector, was shut down after raising close to $260 million.
It was allegedly in talks to raise another funding round, which ultimately fell through. With a staff of 200 people, all while producing and storing physical products, its operations could not be financed anymore.
Anki was founded in 2010 by Boris Sofman, Hanns Tappeiner, and Mark Palatucci. It was shut down because the company ran out of money.