7 Failed AI Startups & Analyses on Why they Failed
There are a lot of things to consider when building a new startup - where to get funding, how to validate your idea, and what features should the product have.
One of the challenges is finding a market that is willing to pay for your solution without even knowing what it is yet.
However, 90% of startups will fail and shut down.
In this article, you can find 7 failed Artificial Intelligence startups as well as analyses on why they closed down.
7 Failed Artificial Intelligence Startups
1) Anki
Anki aimed to intergrate robotics and IoT with kids' toys and games but shut down in April 2019 after failure to raise funding.
Details of the startup:
- Founders: Boris Sofman, Hanns Tappeiner, Mark Palatucci
- Country: United States
- Started in: 2010
- Closed in: 2019
- Nº of employees: 100-250
- Funding Amount: > $50M
- Specific cause of failure: Lack of Funds
You can read more about their failure here.
2) Aria Insights
Aria Insights developed highly advanced drones. After some pivots, the company couldn't find out the correct business model and had to shut down.
Details of the startup:
- Founders: Helen Greiner
- Country: United States
- Started in: 2008
- Closed in: 2019
- Nº of employees: 10-50
- Funding Amount: $10M-$50M
- Specific cause of failure: Multiple Reasons
You can read more about their failure here.
3) Lumos
Lumos provided the ultimate smart switching tech. After the shutdown, the founders recognized they were not the right team to build a hardware company.
Details of the startup:
- Founders: Pritesh Sankhe, Tarkeshwar Singh, Yash Kotak
- Country: India
- Started in: 2014
- Closed in: 2015
- Nº of employees: 1-10
- Specific cause of failure: Lack of Experience
You can read more about their failure here.
4) Salorix
Salorix offered an engagement platform for brands. It closed down because of its inability to raise money after its investors stopped supporting it.
Details of the startup:
- Founders: Santanu Bhattacharya
- Country: United States
- Started in: 2009
- Closed in: 2014
- Nº of employees: 10-50
- Funding Amount: $1M-$10M
- Specific cause of failure: Bad Management
You can read more about their failure here.
5) Seven Dreamers Laboratories
Seven Dreamers Laboratory built a robot that washed, ironed and folded laundry. However, their product was expensive and couldn't match human's dexterity.
Details of the startup:
- Founders: Shin Sakane
- Country: Japan
- Started in: 2014
- Closed in: 2019
- Nº of employees: 100-250
- Funding Amount: > $50M
- Specific cause of failure: Poor Product
You can read more about their failure here.
6) Utrip
Utrip was a travel planning startup that used AI to create personalized itineraries. Keeping the recommendation engine alive was too much for them.
Details of the startup:
- Founders: Gilad Berenstein, Yair Berenstein
- Country: United States
- Started in: 2012
- Closed in: 2019
- Nº of employees: 10-50
- Funding Amount: $1M-$10M
- Specific cause of failure: Mismanagement of Funds
You can read more about their failure here.
7) Ansaro
Sam was one of the co-founders of Ansaro, a SaaS that aimed to revolutionize the recruiting industry through the use of technologies like AI. They raised $2.25M from institutional investors and $750K from friends and family, grew the team to 6 members and earned in total $100k. But with expenses of $70k/month and no product-market fit, they had to shut down 2 years later.
Details of the startup:
- Founder: Sam Stone
- Country: United States
- Started in: 2016
- Closed in: 2018
- Specific cause of failure: Bad Market Fit
You can read more about their failure here.
