Startup Cemetery

A big resource for entrepreneurs and startup owners, in which we have collected and analyzed why +100 big companies have failed. Learn from mistakes, and avoid being part of the 90% of businesses that fail.

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Zoomo

P2P transactions of pre-owned cars

General Information
Category
Transportation
Country
India
Started
In 2014
Business Failure
Business Outcome
Shut Down
Closed
By 2016
Cause of Failure
Bad Business Model
Founders & Employees
Number of Founders
Two
Name of Founders
Arnav Kumar, Himangshu Hazarika
Number of Employees
Between 11 And 50
Funding
Number of Funding Rounds
2
Total Funding Amount
$6M
Number of Investors
2
Description

Zoomo was a Bangalore-based company that started with the goal of building trust in the Indian used cars market. Unlike many car portals, Zoomo did not open up their marketplace to other car dealers. Instead, it decided to only list cars after thoroughly inspecting them.The car would then be sold through peer-to-peer transactions. Zoomo’s aim was to offer a reliable and trustworthy platform where customers would be assured of the quality of the cars and that they would be given a fair, standardized price. The startup caught the attention of some savvy investors and was able to raise over $7 million through venture capital.

Cause of Failure

What killed Zoomo wasn’t lack of funding. In fact, the three Indian founders decided to close shop and return the money to investors when they still had half of the raised capital in the bank. They also seemed to have a great team of talented and committed people.

The problem the venture had was more related to the Indian market itself. The buy-and-sell automobiles market was relatively young in India and many of the people that would come to Zoomo’s site would often be first time buyers or sellers who had close to no experience in the car transaction market. Customers, in particular, would often like a certain model but when they checked the price for a similar model on other marketplaces they would discover that it would often be lower, not realizing that there might have been hidden reasons for the slashed price tags. They weren’t able to assign standardized prices to cars based on their conditions, model and features and the haggling was deeply rooted in the Indian culture. So, their estimation was that for every 100 cars they inspectioned they sold only 20, which would not have been sustainable. They changed their strategy and decided to have a base price for the car and have inspections performed as an added service for an additional cost. The modification allowed to sell slightly more cars but not enough.

Zoomo’s team concluded that the Indian market was not ready and that they needed a more mature environment to be able to pull off a similar model and make it scalable. After considering a merger or an acquisition for a brief period, they decided to cut their journey short and return the rest of the remaining capital.

Go on Reading

Fab

Online design marketplace

e-Commerce
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$336.3M
Multiple Reasons
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By 2013
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More Than 50M
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Acquired
Leap Transit

Provider of private transit and offers bus services

Transportation
Shut Down
$2.5M
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Transportation
United States
In 2013
By 2015
One
Between 51 And 100
Between 1M 10M
Legal Challenges
Shut Down
Design Inc.

Marketplace for high-quality design work

Design
Shut Down
$2.3M
Bad Business Model
Design
United States
In 2016
By 2017
Two
Between 1 And 10
Between 1M 10M
Bad Business Model
Shut Down
Kichit

Brought local chefs to private households

Food and Beverage
Shut Down
$8.1M
Competition
Food and Beverage
United States
In 2011
By 2016
Two
Between 11 And 50
Between 1M 10M
Competition
Shut Down
DotCloud

Enabled developers to host, assemble and run their applications

Software and Hardware
Bankruptcy
$13.7M
Mismanagement of Funds
Software and Hardware
United States
In 2008
By 2016
One
Between 251 And 500
Between 10M 50M
Mismanagement of Funds
Bankruptcy
Koinex

Cryptocurrency exchange platform

Finances
Shut Down
-
Legal Challenges
Finances
India
In 2017
By 2019
Three
Between 51 And 100
No Data
Legal Challenges
Shut Down
This is Brought to You by:
NerdPilots

NerdPilots

Get fast, reliable web, mobile and software development help 24/7.

Acadium

Acadium

120 hours of digital marketing from a remote apprentice for only $299 (+ $50 off!).

This could be your AD. Sponsor Startup Cemetery to reach +10,000 entrepreneurs.

Subscribe to Our Newsletter!

Invite us into your inbox and get immense learning and 80+ deals on tools to help you scale your startup (worth up to $50,000)!

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