25 Failed SaaS Startups & the Reasons Behind
The SaaS sector is a competitive one.
But at the same time, it can be really lucrative.
Thousands of SaaS 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.
25 Failed SaaS Startups
1) PoliMobile
PoliMobile provided political campaigns with a strategic way to reach their supporters. No one wanted to pay for such a service and they had to shut down.
Details of the startup:
- Founders: Curt Prins
- Country: United States
- Industry: Marketing
- Started in: 2011
- Closed in: 2015
- Nº of employees: 1-10
- Funding Amount: $0
- Specific cause of failure: No Market Need
You can read more about their failure here.
2) ScaleFactor
ScaleFactor was a tech startup that claimed to automate SME bookkeeping and payroll thanks to an AI they were developing in-house, which wasn't the case.
Details of the startup:
- Founders: Kurt Rathmann
- Country: United States
- Industry: Finances
- Started in: 2014
- Closed in: 2020
- Nº of employees: 100-250
- Funding Amount: > $50M
- Specific cause of failure: Poor Product
You can read more about their failure here.
3) Transpose
Transpose was a comprehensive information management platform. Operated for two years before shutting down due to the inability to generate enough revenue.
Details of the startup:
- Founders: Hussein Ahmed, Matt Goyer, Samah Gad, Skyler Johnson-Wagner
- Country: United States
- Industry: Productivity
- Started in: 2015
- Closed in: 2015
- Nº of employees: 10-50
- Funding Amount: $1M-$10M
- Specific cause of failure: Bad Business Model
You can read more about their failure here.
4) ABBY
ABBY was a documentation service for A/B tests. To make such a service successful, Andy would have needed to educate the users, and that was not possible.
Details of the startup:
- Founder: Andy Goldschmidt
- Country: Germany
- Industry: Analytics
- Started in: 2015
- Closed in: 2016
- Specific cause of failure: No Market Need
You can read more about their failure here.
5) 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
- Specific cause of failure: Bad Business Model
You can read more about their failure here.
6) 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
- Industry: Software & Hardware
- Started in: 2016
- Closed in: 2018
- Specific cause of failure: Bad Market Fit
You can read more about their failure here.
7) Delite
Delite was a SaaS platform for B2B wholesale orders. It didn’t satisfy any necessity of customers. Just that thing in life you keep putting off.
Details of the startup:
- Founder: Patrick Walls
- Country: United States
- Industry: Software & Hardware
- Started in: 2016
- Closed in: 2017
- Specific cause of failure: No Market Need
You can read more about their failure here.
8) Eloquis
Eloquis was all about bringing personalization to mobile apps. The problem? Early in the market and targeted the wrong customer segment.
Details of the startup:
- Founder: Rohit Nallapeta
- Country: United States
- Industry: Software & Hardware
- Started in: 2010
- Closed in: 2011
- Specific cause of failure: No Market Need
You can read more about their failure here.
9) Eventloot
Justin Anyanwu is a maker who a few years ago built Eventloot, a SaaS platform for wedding planning professionals. He hired some designers and developers and got the SaaS working. But after a few months of running Facebook Ads and sending cold emails, they decided to shut it down. They hadn’t built a platform that solved the problems wedding planners had.
Details of the startup:
- Founder: Justin Anyanwu
- Country: United States
- Industry: Software & Hardware
- Started in: 2014
- Closed in: 2017
- Specific cause of failure: No Market Need
You can read more about their failure here.
10) Habitual
Holger Sindbaek is the founder of Habitual, a habit-tracking app that was initially created since Holger could not find an app that could suit his habit-tracking needs after reading Atomic Habits book. With other successful apps under his belt like a Solitaire card game played by 3M people per month, it seems like he has the knack of making startups fly. So what went wrong with Habitual? Discover it in this interview.
Details of the startup:
- Founder: Holger Sindbaek
- Country: Denmark
- Industry: Productivity
- Started in: 2019
- Closed in: 2021
- Specific cause of failure: Bad Marketing
You can read more about their failure here.
11) Ink
Andrew Askins, in partner with two of his best friends, started his company Krit in 2014. In 2015 they launched Ink, a tool that let freelancers create contracts and get them signed online. They got a couple thousand free users, but ultimately got burnt out before they could make the business model work. Now, they have been able to overcome this failure and build a successful consulting business.
Details of the startup:
- Founder: Andrew Askins
- Country: United States
- Industry: Software & Hardware
- Started in: 2015
- Closed in: 2015
- Specific cause of failure: Lack of Focus
You can read more about their failure here.
12) Muun
Eelco built Muun in his own, a SaaS that allowed co-working spaces owners to run their businesses effectively. He validated the idea and after weeks, he launched it. However, once in the market, Muun had to compete with really big competitors which had much more features and a better pricing. So, Eelco decided to shut it down.
Details of the startup:
- Founder: Eelco
- Country: Netherlands
- Industry: Software & Hardware
- Started in: 2017
- Closed in: 2018
- Specific cause of failure: Bad Marketing
You can read more about their failure here.
13) MyCity
Stepa co-founded MyCity, a tool for local authorities to build relationships with their residents. After realizing they had created a product for a non-existing market, they decided to shut it down.
Details of the startup:
- Founder: Stepa Mitaki
- Country: Russia
- Industry: Software & Hardware
- Started in: 2014
- Closed in: 2016
- Specific cause of failure: No Market Need
You can read more about their failure here.
14) Patron.ai
Ömer launched patron.ai, a gamification platform for developer teams. After promoting it on Twitter and Product Hunt without getting much traction, he decided to shut down the project. That decision was mainly due to a lack of product-market fit and not talking enough to users that signed up.
Details of the startup:
- Founder: Ömer Taban
- Country: Turkey
- Industry: Productivity
- Started in: 2018
- Closed in: 2020
- Specific cause of failure: Bad Market Fit
You can read more about their failure here.
15) Phoenix
Phoenix was a SaaS app to send a last message to the people you love when you die. However, it was the app which died first.
Details of the startup:
- Founder: Enrique Benitez
- Country: Mexico
- Industry: Software & Hardware
- Started in: 2017
- Closed in: 2017
- Specific cause of failure: No Market Need
You can read more about their failure here.
16) Profitabilly
Natagon is an entrepreneur from Bali who, trying to solve a problem he was struggling with in his development agency, built a SaaS that mixed a project management software with an accounting one. Using cold-emails, he was soon able to make it profitable, but lack of passion led to its shut down.
Details of the startup:
- Founder: Natagon
- Country: Indonesia
- Industry: Software & Hardware
- Started in: 2018
- Closed in: 2019
- Specific cause of failure: Lack of Focus
You can read more about their failure here.
17) REPitchbook
Charlie Reese is a Canadian software developer who came with (what he thought it was) a revolutionary idea for a SaaS business in the real estate industry. Using his knowledge in JavaScript, React, and SQL, he built a prototype in 6 weeks. But he failed to validate his idea and shut down.
Details of the startup:
- Founder: Charlie Reese
- Country: Canada
- Industry: Software & Hardware
- Started in: 2017
- Closed in: 2018
- Specific cause of failure: Poor Product
You can read more about their failure here.
18) RingDaddy
Isaac Medeiros is a 23-year-old digital marketer that recently launched his first no-code SaaS project, a mass SMS marketing platform for streamers made with a bunch of no-code tools. We'll discuss how starting using no-code tools helped him realize that building an MVP is easier than ever.
Details of the startup:
- Founder: Isaac Medeiros
- Country: Brazil
- Industry: Marketing
- Started in: 2020
- Closed in: 2020
- Specific cause of failure: Bad Market Fit
You can read more about their failure here.
19) Tailor
Joe is a 25-year-old founder who, following Pieter Levels example, decided to build 12 startups in 12 months. Doing some A/B testing for his other projects, he found the existing tools had a lot of missing features and decided to spend 2 months full-time working on a new solution. But things didn't go well...
Details of the startup:
- Founder: Joe D’elia
- Country: United Kingdom
- Industry: Analytics
- Started in: 2017
- Closed in: 2017
- Specific cause of failure: Bad Marketing
You can read more about their failure here.
20) Tali
Matt created Tali, a timekeeping solution for lawyers powered by voice technology like Amazon Alexa, and Google Assistant. Like many first start-ups, they encountered many mistakes while trying to build. He created Tali in the effort to help lawyers more effectively keep track of their time instead of using pen and paper. Ultimately, due to a lack of traction and a misfit product market they had to wind things down.
Details of the startup:
- Founder: Matthew Volm
- Country: United States
- Industry: Software & Hardware
- Started in: 2017
- Closed in: 2019
- Specific cause of failure: Bad Market Fit
You can read more about their failure here.
21) Team Voice
Team Voice was a SaaS platform for HR professionals. The problem they were trying to solve turned out to be a human problem, not a technology one.
Details of the startup:
- Founder: Kirill Vechtomov
- Country: Canada
- Industry: Software & Hardware
- Started in: 2015
- Closed in: 2017
- Specific cause of failure: No Market Need
You can read more about their failure here.
22) Teamometer
When reading the Lean Startup book, Sergio came up with an idea he wanted to validate: a SaaS to help teams to perform at a higher level. The validation was done successfully, but since then, mistakes related to technology, founding team and listening to customers, meant its shut down 2 years later.
Details of the startup:
- Founder: Sergio Schüler
- Country: Brazil
- Industry: Software & Hardware
- Started in: 2012
- Closed in: 2013
- Specific cause of failure: No Market Need
You can read more about their failure here.
23) Thepresence
Inspired by the iOS app Launchpad, Miloslav Voloskov started drafting ideas to what eventually was called Thepresence. This aimed to provide a more modern and unconventional take on website builders. But this venture got shut down even before it was able to take off. A mental illness shutting down a business that could have changed the drag-and-drop website builder game? It’s more likely than you think.
Details of the startup:
- Founder: Miloslav Voloskov
- Country: Russia
- Industry: Software & Hardware
- Started in: 2018
- Closed in: 2018
- Specific cause of failure: Other
You can read more about their failure here.
24) Toki
Vladimir was the founder of Toki, a one-stop solution to finding trends and analytics on TikTok. It started as a side-project, but after launching on Product Hunt, they realized they didn't have a deep connection with the problem they were tackling and lost motivation to keep going.
Details of the startup:
- Founder: Vladimir Esaulov
- Country: Russia
- Industry: Marketing
- Started in: 2020
- Closed in: 2020
- Specific cause of failure: Lack of Experience
You can read more about their failure here.
25) Watu
Watu was a temporary staffing app founded by José Pablo Fernández and his business partner. The business was very sticky; once a company started using the app, it was very unlikely for them to leave. So what could have gone wrong!? Read our interview with Pablo below to know more.
Details of the startup:
- Founder: Pablo Fernández
- Country: United Kingdom
- Industry: Software & Hardware
- Started in: 2011
- Closed in: 2015
- Specific cause of failure: Lack of Funds
You can read more about their failure here.
