Karhoo failure

Karhoo

Cab aggregator and price comparison tool

Description

Karhoo was a cab aggregator and price comparison tool. Through its app, users could get a glance of all the licensed taxis, regulated and private cars for hire that were in the area. The user would be shown the pricing and location of the various cars on a map and they could then book rides with their cab of choice. Unlike other companies which have their own fleet of car, Karhoo relied on already available cabs and it took a 10% commision from the rides booked through its app.

Stats

Category
Transportation
Country
United Kingdom
Started
In 2014
Closed
By 2016
Number of Founders
One
Name of Founders
Daniel Ishag
Number of Employees
Between 51 And 100
Number of Funding Rounds
2
Total Funding Amount
$39M
Number of Investors
3
Precise Cause of Failure
Poor Product
Business Outcome
Acquired

Cause of Failure

Karhoo was out of business after barely 6 months of operation despite having an objectively innovative and useful product.

Based on the various online reports and articles, it seems that the two main reasons for Karhoo’s failure were poor management and faulty execution of a good concept.

Since the company was looking for more investors it went on a full-blown marketing campaign to entice people to use the service and show potential investors that the app was indeed widely used. As a promotional too, they offered free rides to passengers. The problem was that app codes never seemed to expire and people would use £100 worth in free rides. There was also a bug that sometimes prevented the app from accepting credit cards payments.

The CEO of Karhoo was also reported as listing large personal bills showing his lavish lifestyle including expensive shopping sprees, hair salons, $6000 treatment for his pet dog, 10-year lease of 3 New York apartment, luxurious parties, costly flights and stays in top hotels to mention some. On the other end, employees were asked to skip paychecks until Karhoo's finances got better. When the unexpected news that the company would shut down was announced, employees were also told the company didn't have enough money to pay them and that they wouldn't receive the payment for the previous month as well since the company was closing with $10,000 in its account.

Karhoo has been acquired by RCI Bank and Services in January 2017 and has been rebranded as Flit Technologies.

Go on Reading

Other Startups

Karhoo

Cab aggregator and price comparison tool

General Information
Category
Transportation
Country
United Kingdom
Started
In 2014
Business Failure
Business Outcome
Acquired
Closed
By 2016
Cause of Failure
Poor Product
Founders & Employees
Number of Founders
One
Name of Founders
Daniel Ishag
Number of Employees
Between 51 And 100
Funding
Number of Funding Rounds
2
Total Funding Amount
$39M
Number of Investors
3
Description

Karhoo was a cab aggregator and price comparison tool. Through its app, users could get a glance of all the licensed taxis, regulated and private cars for hire that were in the area. The user would be shown the pricing and location of the various cars on a map and they could then book rides with their cab of choice. Unlike other companies which have their own fleet of car, Karhoo relied on already available cabs and it took a 10% commision from the rides booked through its app.

Cause of Failure

Karhoo was out of business after barely 6 months of operation despite having an objectively innovative and useful product.

Based on the various online reports and articles, it seems that the two main reasons for Karhoo’s failure were poor management and faulty execution of a good concept.

Since the company was looking for more investors it went on a full-blown marketing campaign to entice people to use the service and show potential investors that the app was indeed widely used. As a promotional too, they offered free rides to passengers. The problem was that app codes never seemed to expire and people would use £100 worth in free rides. There was also a bug that sometimes prevented the app from accepting credit cards payments.

The CEO of Karhoo was also reported as listing large personal bills showing his lavish lifestyle including expensive shopping sprees, hair salons, $6000 treatment for his pet dog, 10-year lease of 3 New York apartment, luxurious parties, costly flights and stays in top hotels to mention some. On the other end, employees were asked to skip paychecks until Karhoo's finances got better. When the unexpected news that the company would shut down was announced, employees were also told the company didn't have enough money to pay them and that they wouldn't receive the payment for the previous month as well since the company was closing with $10,000 in its account.

Karhoo has been acquired by RCI Bank and Services in January 2017 and has been rebranded as Flit Technologies.

Go on Reading

Zulily

Online retailer that offered daily deals

e-Commerce
Shut Down
$194.6M
Bad Marketing
e-Commerce
United States
In 2009
By 2014
Two
Between 1001 And 5000
More Than 50M
Bad Marketing
Shut Down
Frankly

Messaging app for frank conversations

Social Media
Shut Down
$600K
Bad Market Fit
Social Media
India
In 2014
By 2016
Two
Between 51 And 100
Less Than 1M
Bad Market Fit
Shut Down
Digg

Enables users to share interesting stories

Social Media
Still Active
$49M
Competition
Social Media
United States
In 2004
Active
One
Between 51 And 100
Between 10M 50M
Competition
Still Active
Shipbeat

Shipping API for e-commerce companies

e-Commerce
Bankruptcy
€1.2M
Multiple Reasons
e-Commerce
Denmark
In 2014
By 2016
Two
Between 11 And 50
Between 1M 10M
Multiple Reasons
Bankruptcy
RewardMe

Intelligent CRM solution for local commerce

Marketing
Shut Down
$1.1M
Lack of Funds
Marketing
United States
In 2010
By 2015
Three
Between 11 And 50
Between 1M 10M
Lack of Funds
Shut Down
Rdio

Digital music service provider

Music
Bankruptcy
$125.7M
Competition
Music
United States
In 2008
By 2015
Three
Between 51 And 100
More Than 50M
Competition
Bankruptcy