India has become one of the world’s most exciting startup hubs, home to innovative ideas, passionate founders, and billions in investor funding. From food delivery and fintech to edtech and social media, the startup ecosystem has witnessed incredible highs. However, not every story ends on a happy note.
While some startups turned into unicorns, others stumbled despite big promises, and aggressive expansions. Many struggled with flawed business models, unsustainable growths, funding failures or changing market dynamics.
These failures remind us that building a successful startup isn’t just about raising funds or scaling fast, it’s about getting the fundamentals right.
In this blog, we’ll explore some of India’s most high-profile startup failures, what led to their downfall, and the key takeaways for future entrepreneurs.
List of Top Failed Startups in India
Listed below (not by order) are some of the top failed startups in India that we’ve handpicked for you-
Byjus
Once hailed as India’s most valuable startup, Byju’s was founded in 2011 by Byju Raveendran and Divya Gokulnath with the goal of transforming education through technology. Headquartered in Bengaluru, the EdTech giant saw meteoric growth, peaking at an estimated USD 22 billion valuation in 2022. But by 2024, that number had dropped dramatically to zero.
So what went wrong?
Byju’s downfall was the result of a perfect storm. The company expanded too fast; acquiring startups, entering international markets, and spending heavily on celebrity endorsements and sponsorships. This rapid growth became difficult to sustain, especially after the pandemic-driven demand for online learning began to fade.
Financial mismanagement played a major role too. Delayed financial disclosures, high cash burn, and mounting debt shook the investors’ confidence. The company also faced legal troubles, quality concerns, and increasing criticism for its aggressive sales tactics and lack of personalized support for students.
Leadership decisions only added to the chaos.
Byju’s story is a cautionary tale, a reminder that scaling a business is not just about growth, but about growing wisely, and transparently.
TinyOwl
Launched in 2014 by five IIT graduates, Saurabh Goyal, Harshvardhan Mandad, Shikhar Paliwal, Tanuj Khandelwal, and Gaurav Choudhary, TinyOwl was a mobile-only food ordering app based in Mumbai. At the height of India’s food tech boom, TinyOwl attracted attention and funding for its vision of making food ordering easy and accessible.
So what went wrong?
TinyOwl’s collapse was largely due to growing too fast, too soon. The startup expanded aggressively to several cities without stabilizing its core operations. This overreach, combined with poor planning, led to logistical chaos and soaring operational costs.
Their cash burn spiraled out of control as they hired rapidly and scaled delivery operations without the backing of sustainable revenue. Leadership struggles further aggravated the situation, with criticism around the CEO’s lack of experience and communication gaps.
Competition in the food delivery space was fierce, and TinyOwl struggled to carve out a distinct niche. To make things worse, shifts in business strategy like dissolving their ‘Homemade’ venture and switching to dish-based aggregation confused users and diluted their brand.
In the end, TinyOwl serves as a reminder that startups need strong leadership, financial discipline, and focused growth as much as they require funding and ambition.
BluSmart
Founded in January 2019 by Anmol Singh Jaggi, Punit K. Goyal, and Puneet Singh Jaggi, BluSmart Mobility entered the Indian ride hailing market with a fresh promise: eco-friendly, all-electric commuting. Based in Gurugram, the company aimed to transform how urban India travels by offering an all electric cab fleet powered by sustainability and smart technology.
So what went wrong?
Despite a strong start and growing interest in EV-based transport, BluSmart struggled to maintain its momentum. Operating in a highly competitive space dominated by giants like Ola and Uber, the company faced mounting pressure to scale up quickly while keeping prices attractive.
However, challenges soon piled up. The high cost of maintaining and expanding an electric fleet, combined with limited charging infrastructure, made operations increasingly complex.
Additionally, BluSmart’s pricing model though consumer-friendly, put strain on its revenue model, making long-term profitability hard to achieve.
As the market evolved, BluSmart found it difficult to keep pace. The lack of widespread EV adoption and the logistical difficulties of managing fleet performance at scale further impacted its growth.
In the end, Blusmart became a cautionary tale about the operational realities of running a capital heavy business in a rapidly evolving market.
Otipy
Founded in 2020 by Varun Khurana and Prashant Jain, Otipy was a promising agritech startup that aimed to deliver fresh produce straight from farms to doorsteps within 12 hours. Operating under Crofarm Agriproducts Pvt Ltd, the company built its model on demand prediction and direct sourcing from farmers, cutting out middlemen and aiming for better margins and fresher food.
So what went wrong?
The startup’s journey came to a halt when it failed to raise a crucial USD 10 million in its extended Series B funding round. Without this capital, Otipy faced a cash crunch that made it impossible to continue operations.
Its business model, while innovative, was difficult to sustain. Dealing with perishable goods on thin margins, managing complex last mile logistics, and competing with giants like Zepto and Blinkit place immense pressure on profitability.
Delayed payments to vendors and farmers, lack of transparency, and overambitious expansion only worsened the situation.
Otipy’s shutdown reflects the harsh reality of India’s hyper-competitive quick commerce and agritech sectors where balancing scale, and sustainability is key.
Koo
Launched in 2020 by Aprameya Radhakrishna and Mayank Bidawatka, Koo was India’s homegrown answer to Twitter, offering microblogging in multiple Indian languages. Backed by government support and investor confidence, the app was positioned as a “vocal for local” alternative at a time when tensions with foreign platforms were high.
So what went wrong?
Despite early buzz, Koo couldn’t sustain its momentum. Failed acquisition talks with companies like DailyHunt fell through, leaving it without a safety net. While it did raise over USD 60 million, the funds weren’t enough to compete with global giants like Twitter (now X).
User retention was another major hurdle. Koo struggled to keep users engaged, and its focus on vernacular content, though unique, couldn’t outmatch the visual heavy and fast-paced preferences of today’s social media audience.
High operating costs and weak monetization only added to its troubles.
Koo’s attempt to go global, even expanding to Brazil, couldn’t compensate for its homeground instability. Ultimately, without consistent funding or a loyal user base, Koo couldn’t survive the social media supremacy war.
Afterword
Startup failures may sound like the end of the road, but they often carry lessons that fuel future success. Each failed venture adds to the collective wisdom of India’s entrepreneurial journey reminding us that behind every big idea, sustainable execution is what truly matters.