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Marketplace Failures

44 Failed Marketplace Startups & the Reasons Behind

Here's a list of 44 failed marketplace startups, analyses on why they shut down, and interviews with their founders.

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The Marketplace sector is a competitive one.

But at the same time, it can be really lucrative.

Thousands of Marketplace startups have emerged in the last years and a lot of money has flown into them

However, the majority of these startups have since shut down.

In this article, you can find some of them as well as analysis on why they failed.


44 Failed Marketplace Startups

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99dresses

99dresses

99dresses was a fashion app that offered trades of second-hand designer dresses between users. It operated for a year but had to shut it down in 2014.

Details of the startup:

  • Founders:

    Nikki Durkin

  • Country:

    Australia

  • Industry:

    e-Commerce

  • Started in:

    2010

  • Closed in:

    2014

  • Nº of employees:

    1-10

  • Funding Amount:

    < $1M

  • Specific cause of failure:

    Multiple Reasons

You can read more about their failure here.

Alikolo

Alikolo

Alikolo was an eMarketplace company. The founder didn't have a clear vision and didn't know the reasons why customers purchased at his rivals.

Details of the startup:

  • Founders:

    Danny Taniwan

  • Country:

    Indonesia

  • Industry:

    e-Commerce

  • Started in:

    2014

  • Closed in:

    2015

  • Nº of employees:

    1-10

  • Funding Amount:

    < $1M

  • Specific cause of failure:

    Lack of Experience

You can read more about their failure here.

Auctionata

Auctionata

Auctionata was an online auction platform for art and luxury. Their issues originated from unethical behavior, lack of transparency, and lies by the CEO.

Details of the startup:

  • Founders:

    Alexander Gilkes, Alexander Zacke, Georg Untersalmberger, Susanne Zacke

  • Country:

    Germany

  • Industry:

    e-Commerce

  • Started in:

    2012

  • Closed in:

    2017

  • Nº of employees:

    250-500

  • Funding Amount:

    > $50M

  • Specific cause of failure:

    Legal Challenges

You can read more about their failure here.

Beepi

Beepi

Beepi was a marketplace for used cars. They ran out of cash to operate and tried to sell to potential buyers, but didn't achieve to close the operation.

Details of the startup:

  • Founders:

    Ale Resnik, Owen Savir

  • Country:

    United States

  • Industry:

    Transportation

  • Started in:

    2013

  • Closed in:

    2016

  • Nº of employees:

    100-250

  • Funding Amount:

    > $50M

  • Specific cause of failure:

    Mismanagement of Funds

You can read more about their failure here.

CircleBack Lending

CircleBack Lending

CircleBack Lending was a loan marketplace. Due to problems with profitability and issues with the industry, the startup was forced to cease its operations.

Details of the startup:

  • Founders:

    Manoj Ramnani & Patrick Questembert

  • Country:

    United States

  • Industry:

    Finances

  • Started in:

    2012

  • Closed in:

    2016

  • Nº of employees:

    10-50

  • Funding Amount:

    $10M-$50M

  • Specific cause of failure:

    Bad Business Model

You can read more about their failure here.

Dazo

Dazo

Dazo was a food-tech startup based in Bangalore which emerged as a “food on demand” company. Fierce competition and lack of funding led to Dazo's failure.

Details of the startup:

  • Founders:

    Monica Rastogi, Shashaank Shekhar Singhal

  • Country:

    India

  • Industry:

    Food & Beverage

  • Started in:

    2015

  • Closed in:

    2016

  • Nº of employees:

    10-50

  • Funding Amount:

    No Data

  • Specific cause of failure:

    Competition

You can read more about their failure here.

Design Inc.

Design Inc.

Design Inc. linked clients to talented designers. They reached market saturation and the startup could not make enough revenue to cover operation costs.

Details of the startup:

  • Founders:

    Bjoern Zinssmeister, Marc Hemeon

  • Country:

    United States

  • Industry:

    Design

  • Started in:

    2016

  • Closed in:

    2017

  • Nº of employees:

    1-10

  • Funding Amount:

    $1M-$10M

  • Specific cause of failure:

    Bad Business Model

You can read more about their failure here.

Flowtab

Flowtab

Flowtab was an app that solved the problem of long queues in bars. They tried several business models but never found a profitable one, so they shut down.

Details of the startup:

  • Founders:

    Mike Townsend

  • Country:

    United States

  • Industry:

    Food & Beverage

  • Started in:

    2011

  • Closed in:

    2013

  • Nº of employees:

    50-100

  • Funding Amount:

    $0

  • Specific cause of failure:

    Bad Business Model

You can read more about their failure here.

HiGear

HiGear

HiGear was a peer-to-peer online company that listed luxury cars for rent. A criminal gang stole four cars worth $400k. They opted to shut down operations.

Details of the startup:

  • Founders:

    Ali Moiz, Murtaza Hussain

  • Country:

    United States

  • Industry:

    Transportation

  • Started in:

    2011

  • Closed in:

    2011

  • Nº of employees:

    1-10

  • Funding Amount:

    $1M-$10M

  • Specific cause of failure:

    Legal Challenges

You can read more about their failure here.

Karhoo

Karhoo

Karhoo was a cab aggregator. It was out of business after 6 months of operation. Poor management and bad execution of a good concept were the main causes.

Details of the startup:

  • Founders:

    Daniel Ishag

  • Country:

    United Kingdom

  • Industry:

    Transportation

  • Started in:

    2014

  • Closed in:

    2016

  • Nº of employees:

    50-100

  • Funding Amount:

    $10M-$50M

  • Specific cause of failure:

    Poor Product

You can read more about their failure here.

Kitchit

Kitchit

Kitchit brought local chefs to your home. They had to compete with other big food providers in the same market, which provoked their failure.

Details of the startup:

  • Founders:

    Brendan Marshall, Ian Ferguson

  • Country:

    United States

  • Industry:

    Food & Beverage

  • Started in:

    2011

  • Closed in:

    2016

  • Nº of employees:

    10-50

  • Funding Amount:

    $1M-$10M

  • Specific cause of failure:

    Competition

You can read more about their failure here.

Koinex

Koinex

Koinex was a cryptocurrency exchange platform. India's laws got harsh against cryptocurrencies and the obstacles and little profits led to its shut down.

Details of the startup:

  • Founders:

    Aditya Naik, Rahul Raj, Rakesh Yadav

  • Country:

    India

  • Industry:

    Finances

  • Started in:

    2017

  • Closed in:

    2019

  • Nº of employees:

    50-100

  • Funding Amount:

    No Data

  • Specific cause of failure:

    Legal Challenges

You can read more about their failure here.

Laurel & Wolf

Laurel & Wolf

Laurel & Wolf was a marketplace for interior design solutions. They shut down due to large spendings on marketing and a bad reputation among customers.

Details of the startup:

  • Founders:

    Brandon Kleinman, Leura Fine

  • Country:

    United States

  • Industry:

    e-Commerce

  • Started in:

    2014

  • Closed in:

    Active

  • Nº of employees:

    50-100

  • Funding Amount:

    $10M-$50M

  • Specific cause of failure:

    Multiple Reasons

You can read more about their failure here.

Move Loot

Move Loot

Move Loot was an online resale marketplace for furniture. They decided to have a furniture stockroom without thinking about the expenses of running it.

Details of the startup:

  • Founders:

    Bill Bobbitt, Jenny Karin Morrill, Ryan Smith, Shruti Shah

  • Country:

    United States

  • Industry:

    e-Commerce

  • Started in:

    2013

  • Closed in:

    2016

  • Nº of employees:

    50-100

  • Funding Amount:

    $10M-$50M

  • Specific cause of failure:

    Bad Business Model

You can read more about their failure here.

PepperTap

PepperTap

PepperTap provided a platform to buy and deliver groceries from local markets. Customers found delivery fees too expensive for their needs, and shut down.

Details of the startup:

  • Founders:

    Milind Sharma, Navneet Singh

  • Country:

    India

  • Industry:

    Food & Beverage

  • Started in:

    2014

  • Closed in:

    2016

  • Nº of employees:

    1,000-5,000

  • Funding Amount:

    > $50M

  • Specific cause of failure:

    Poor Product

You can read more about their failure here.

RoomsTonite

RoomsTonite

RoomsTonite was a last-minute hotel booking app for people traveling to India. They raised $1.5M in funding but the money didn't arrive and they shut down.

Details of the startup:

  • Founders:

    Suresh John

  • Country:

    India

  • Industry:

    Travel

  • Started in:

    2014

  • Closed in:

    2017

  • Nº of employees:

    100-250

  • Funding Amount:

    $1M-$10M

  • Specific cause of failure:

    Lack of Funds

You can read more about their failure here.

SellanApp

SellanApp

SellanApp connected people who had an idea for an app with app developers that could materialize it. It failed due to an unhealthy co-founder partnership.

Details of the startup:

  • Founders:

    Aernoud Dekker, Milan van den Bovenkamp

  • Country:

    The Netherlands

  • Industry:

    Finances

  • Started in:

    2012

  • Closed in:

    2015

  • Nº of employees:

    1-10

  • Funding Amount:

    < $1M

  • Specific cause of failure:

    Failure to Pivot

You can read more about their failure here.

Selltag

Selltag

Selltag was a web-based buy & sell platform. The CEO realized their business model would not be sustainable in the long term and shut it down.

Details of the startup:

  • Founders:

    Javier Escribano, Ruben Colomer, Juan Luis Hortelano, Walter Kobylanski

  • Country:

    Spain

  • Industry:

    e-Commerce

  • Started in:

    2014

  • Closed in:

    2015

  • Nº of employees:

    10-50

  • Funding Amount:

    < $1M

  • Specific cause of failure:

    Failure to Pivot

You can read more about their failure here.

Sharingear

Sharingear

Sharinger was a marketplace for musicians to rent their instruments. They focused on a market that was too small and the business model was unsustainable.

Details of the startup:

  • Founders:

    Mircea Gabriel Eftemie

  • Country:

    Denmark

  • Industry:

    Music

  • Started in:

    2014

  • Closed in:

    2015

  • Nº of employees:

    1-10

  • Funding Amount:

    < $1M

  • Specific cause of failure:

    Multiple Reasons

You can read more about their failure here.

Shyp

Shyp

Shyp imitated the Uber model with an on-demand shipping service. However, they were unable to figure out a profitable business model and had to shut down.

Details of the startup:

  • Founders:

    Jack Smith, Joshua Scott, Kevin Gibbon

  • Country:

    United States

  • Industry:

    Transportation

  • Started in:

    2013

  • Closed in:

    2018

  • Nº of employees:

    10-50

  • Funding Amount:

    > $50M

  • Specific cause of failure:

    Multiple Reasons

You can read more about their failure here.

Sidecar

Sidecar

Sidecar was a transportation company. They had top-notch technology but no marketing strategy, and could only become useful in high-density cities.

Details of the startup:

  • Founders:

    Jahan Khanna, Sunil Paul

  • Country:

    United States

  • Industry:

    Transportation

  • Started in:

    2011

  • Closed in:

    2015

  • Nº of employees:

    50-100

  • Funding Amount:

    $10M-$50M

  • Specific cause of failure:

    Competition

You can read more about their failure here.

Stayzilla

Stayzilla

Stayzilla was a successful homestay network that raised $33.5M in funding. Their operational costs were too high and they were losing money every year.

Details of the startup:

  • Founders:

    Rupal Yogendra, Sachit Singhi, Sachit Singhi, Yogendra Vasupal

  • Country:

    India

  • Industry:

    Travel

  • Started in:

    2005

  • Closed in:

    2017

  • Nº of employees:

    250-500

  • Funding Amount:

    $10M-$50M

  • Specific cause of failure:

    Lack of Focus

You can read more about their failure here.

Take Eat Easy

Take Eat Easy

TakeEatEasy enabled restaurants to provide a reliable delivery service for their customers. Their margins were insufficient and closed doors after 3 years.

Details of the startup:

  • Founders:

    Adrien Roose, Chloé Roose, Jean-Christophe Libbrecht, Karim Slaoui

  • Country:

    Belgium

  • Industry:

    Food & Beverage

  • Started in:

    2013

  • Closed in:

    2016

  • Nº of employees:

    100-250

  • Funding Amount:

    $10M-$50M

  • Specific cause of failure:

    Competition

You can read more about their failure here.

Tutorspree

Tutorspree

Tutorspree wanted to enhance tutoring. Their vision of pairing up tutors and students to meet up in person was not practical, which made it shut down.

Details of the startup:

  • Founders:

    Aaron Harris, Josh Abrams, Ryan Bednar

  • Country:

    United States

  • Industry:

    Education

  • Started in:

    2010

  • Closed in:

    2013

  • Nº of employees:

    50-100

  • Funding Amount:

    $1M-$10M

  • Specific cause of failure:

    Bad Marketing

You can read more about their failure here.

Zirtual

Zirtual

Zirtual was a virtual assistant marketplace for busy entrepreneurs. Its management and the high burn rate brought the firm on the verge of bankruptcy.

Details of the startup:

  • Founders:

    Collin Vine, Erik Jensen, Maren Kate Donovan

  • Country:

    United States

  • Industry:

    Software & Hardware

  • Started in:

    2011

  • Closed in:

    2015

  • Nº of employees:

    100-250

  • Funding Amount:

    $1M-$10M

  • Specific cause of failure:

    Mismanagement of Funds

You can read more about their failure here.

Zoomo

Zoomo

Zoomo's goal was to build trust in the Indian used cars market. The buy-and-sell vehicle market was relatively young in India and decided to shut down.

Details of the startup:

  • Founders:

    Arnav Kumar, Himangshu Hazarika

  • Country:

    India

  • Industry:

    Transportation

  • Started in:

    2014

  • Closed in:

    2016

  • Nº of employees:

    10-50

  • Funding Amount:

    $1M-$10M

  • Specific cause of failure:

    Bad Business Model

You can read more about their failure here.

Adproval

Adproval

Matthew founded Adproval, a marketplace to connect blogging and social media influencers with brands. Raised around $300k in funds and made $200/mo from their self-service software for bloggers. In the end, they made over $200k in revenue from consulting services but it wasn't enough.

Details of the startup:

  • Founder:

    Matthew Anderson

  • Country:

    United States

  • Industry:

    Marketing

  • Started in:

    2011

  • Closed in:

    2017

  • Funding Amount:

    $100K-$500K

  • Specific cause of failure:

    Bad Business Model

You can read more about their failure here.

Boston Apartment Hub

Boston Apartment Hub

Boston Apartment Hub was an apartment listing site for the Boston area. The idea was probably too ahead of its time.

Details of the startup:

  • Founder:

    Jon Sherman

  • Country:

    United States

  • Industry:

    Software & Hardware

  • Started in:

    2006

  • Closed in:

    2007

  • Funding Amount:

    $0

  • Specific cause of failure:

    Bad Market Fit

You can read more about their failure here.

Community Coders

Community Coders

While in university, Kaito started Community Coders, a business that connected companies looking for web development and digital marketing services with high school students. However, as the months went over, it became difficult to close deals and the startup began to lose its course until they shut down.

Details of the startup:

  • Founder:

    Kaito Cunningham

  • Country:

    Canada

  • Industry:

    Education

  • Started in:

    2018

  • Closed in:

    2020

  • Funding Amount:

    $0

  • Specific cause of failure:

    Bad Management

You can read more about their failure here.

ExploreVR

ExploreVR

Andrey Norin is a budding entrepreneur, responsible for all the successes and the failures of ExploreVR. This was a directory site focused 100% on virtual reality. He started it in 2017 and shut down a few months later. His lack of experience in creating a business from scratch was the main cause of failure.

Details of the startup:

  • Founder:

    Andrey Norin

  • Country:

    United States

  • Industry:

    Software & Hardware

  • Started in:

    2017

  • Closed in:

    2017

  • Funding Amount:

    $0

  • Specific cause of failure:

    Lack of Experience

You can read more about their failure here.

Gawkbox

Gawkbox

GawkBox was a platform where viewers of live streams could play mobile games to donate real money to streamers. Chris co-founded this as his first startup and he was able to successfully raise $4.4M in venture funding, which the startup invested in marketing until they achieved 500k users and more than $1M in revenue. However, multiple mistakes and a series of reasons led to their shut down.

Details of the startup:

  • Founder:

    Christopher Brownridge

  • Country:

    United States

  • Industry:

    Entertainment

  • Started in:

    2016

  • Closed in:

    2019

  • Funding Amount:

    $1M-$5M

  • Specific cause of failure:

    Lack of Funds

You can read more about their failure here.

Hot Barber

Hot Barber

Hot Barber was a website that let hair stylists set up profiles and customers browse portfolios, but the founders couldn't find a way to monetize it!

Details of the startup:

  • Founder:

    Julia Enthoven

  • Country:

    United States

  • Industry:

    Software & Hardware

  • Started in:

    2017

  • Closed in:

    2018

  • Funding Amount:

    $0

  • Specific cause of failure:

    Bad Business Model

You can read more about their failure here.

Howell Market

Howell Market

Howell Market was an online store where individual sellers could go to sell their products. Cody, the founder, partnered with his family and friends, but things didn’t work out as his partners weren’t passionate about the vision of the company.

Details of the startup:

  • Founder:

    Cody Howell

  • Country:

    United States

  • Industry:

    e-Commerce

  • Started in:

    2017

  • Closed in:

    2017

  • Funding Amount:

    $0

  • Specific cause of failure:

    Bad Management

You can read more about their failure here.

Jobridge

Jobridge

Jasmeet is an Indian software engineer who a few years ago decided to build new revenue strategies for his business directory and decided to build a job board with a unique offline-online model. But their idea was too ahead to the time and, due to a bad business model, they had to shut down.

Details of the startup:

  • Founder:

    Jasmeet Singh

  • Country:

    India

  • Industry:

    Software & Hardware

  • Started in:

    2017

  • Closed in:

    2017

  • Funding Amount:

    $0

  • Specific cause of failure:

    Bad Business Model

You can read more about their failure here.

Lieferoo

Lieferoo

In 2014, Aazar, a Pakistani entrepreneur, decided to create an Uber for logistics and awkward items trying to solve a problem he and many other people were having: Bringing items from Pakistan to Germany. He soon validated the idea and built the product. But a combination of bad marketing and bad team fit led to their failure.

Details of the startup:

  • Founder:

    Aazar Shad

  • Country:

    Germany

  • Industry:

    Transportation

  • Started in:

    2014

  • Closed in:

    2016

  • Funding Amount:

    $0

  • Specific cause of failure:

    Bad Marketing

You can read more about their failure here.

LocalTown

LocalTown

Michael founded LocalTown, an online marketplace built using no-code tools. After noticing a lot of makers needed help with launching their side projects, he started building tools to solve the problems of that niche.

Details of the startup:

  • Founder:

    Michael Novotny

  • Country:

    United States

  • Industry:

    Software & Hardware

  • Started in:

    2016

  • Closed in:

    2018

  • Funding Amount:

    $0

  • Specific cause of failure:

    Bad Market Fit

You can read more about their failure here.

Onepagetrip

Onepagetrip

Onepagetrip was a travel itinerary sharing community. Not having a plan to make money from the beginning was a stupid rookie mistake.

Details of the startup:

  • Founder:

    Ana Santos

  • Country:

    Australia

  • Industry:

    Travel

  • Started in:

    2014

  • Closed in:

    2015

  • Funding Amount:

    $0

  • Specific cause of failure:

    Bad Business Model

You can read more about their failure here.

QuickHaggle

QuickHaggle

QuickHaggle was a community in which online users could exchange their skills. However, just like in old age, with the barter system, it became really difficult to find people who were looking for your service, and in exchange, could carry out what you needed. After some months, Bilal decided to shut it down.

Details of the startup:

  • Founder:

    Bilal Ahmad

  • Country:

    Pakistan

  • Industry:

    Software & Hardware

  • Started in:

    2010

  • Closed in:

    2011

  • Funding Amount:

    $0

  • Specific cause of failure:

    Lack of Funds

You can read more about their failure here.

Rent Nest

Rent Nest

Steven was co-founder at Rent Nest, an app that allowed users to collect and share information on houses to rent. They raised some money from friends and were soon accepted on a startup accelerator. Throughout two years, the startup grew to $12k/mo, but they were spending +$40k/mo, which led them to eventually running out of funds and shutting down.

Details of the startup:

  • Founder:

    Steven Glod

  • Country:

    United States

  • Industry:

    Software & Hardware

  • Started in:

    2012

  • Closed in:

    2014

  • Funding Amount:

    < $100K

  • Specific cause of failure:

    Bad Business Model

You can read more about their failure here.

Sofetch

Sofetch

Talking with her manicurist, Margaret got to know some of the common challenges beauty service providers faced in Armenia. Her startup Sofetch aimed to solve some of these. She hired a developer to build it and as she was beginning to prepare the launch, COVID happened and the beauty industry was disrupted. She tried pivoting, but nothing worked so she decided to move on to a new startup idea.

Details of the startup:

  • Founder:

    Margaret Rostamian

  • Country:

    Armenia

  • Industry:

    Health

  • Started in:

    2019

  • Closed in:

    2020

  • Funding Amount:

    < $100K

  • Specific cause of failure:

    Failure to Pivot

You can read more about their failure here.

Teacher Finder

Teacher Finder

Andrew Davison is one of the automation kings. He is a Zapier Certified Expert and an Integromat Partner running Luhhu, a business automation agency. Before that, he built Teacher Finder, a marketplace for language teachers. It didn’t take off, but using Zapier each day helped him start his agency.

Details of the startup:

  • Founder:

    Andrew Davison

  • Country:

    Hungary

  • Industry:

    Education

  • Started in:

    2015

  • Closed in:

    2020

  • Funding Amount:

    $0

  • Specific cause of failure:

    Competition

You can read more about their failure here.

Vacation Bird

Vacation Bird

Gene founded VacationBird, a marketplace for finding your vacation rental. It was an early version of Airbnb and a VRBO competitor. Having a misalignment of incentives between co-founders and poor planning were the main causes to shut it down in 2012.

Details of the startup:

  • Founder:

    Gene Maryushenko

  • Country:

    United States

  • Industry:

    Travel

  • Started in:

    2011

  • Closed in:

    2012

  • Funding Amount:

    $0

  • Specific cause of failure:

    Lack of Experience

You can read more about their failure here.

WantRemoteJob

WantRemoteJob

Vyacheslav is a software engineer who in 2017 decided to build a board for remote jobs on the IT industry. He built it using his programming knowledge and invite a list of contacts he knew to try the product. But he soon realized he couldn’t handle everything and that keeping up the project would require a lot of time and people. It wasn’t going to pay off, so he shut it down.

Details of the startup:

  • Founder:

    Vyacheslav Grzhybovsky

  • Country:

    Latvia

  • Industry:

    Software & Hardware

  • Started in:

    2017

  • Closed in:

    2017

  • Funding Amount:

    $0

  • Specific cause of failure:

    Bad Market Fit

You can read more about their failure here.

WedMap

WedMap

Tauras is a 30-year old entrepreneur from Lithuania. With the objective of digitizing the wedding planning process, he co-founded WedMap. They launched the tool within some months and carried out a vast number of marketing strategies, which led to a monthly revenue of $2k. However, different problems on team, resources, skills, and product meant WedMap’s failure.

Details of the startup:

  • Founder:

    Tauras Sinkus

  • Country:

    Switzerland

  • Industry:

    Software & Hardware

  • Started in:

    2015

  • Closed in:

    2018

  • Funding Amount:

    $0

  • Specific cause of failure:

    Lack of Funds

You can read more about their failure here.

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