Biting the dust: Only 1 out of 50 start-ups secures Series A funding within 18 months
TNIE spoke to many venture capitalists and investors who said lack of clear planning and in some cases even poor legal and structural hygiene are some of the reasons for start-ups shutting operations.
According to data sourced from market intelligence firm Tracxn, 65,906 companies were shut down in India from January 2023 till date while a total of 7,484 start-ups were shut down from July 1, 2024 to July 18, 2025 alone. Start-ups such as Koo and Zerodha's Nithin Kamath-backed Stoa School have shut down in recent times.
"Start-up shutdowns are not unusual; they are part of how a young ecosystem matures. What we're seeing now is a period of correction, brought on by a mix of internal and external challenges," said Roma Priya, founder of Burgeon Law.
One major reason is the lack of product–market fit. Many start-ups go to market without fully testing whether their product solves a real and scalable problem. Founders also often face co-founder conflicts or team misalignment early on, which can slow momentum. Another common issue is limited access to funding, especially now that investors are being more selective.
In addition to these, several start-ups face difficulties due to poor legal and structural hygiene, for example, unclear company structures, weak documentation, or non-compliance with regulatory norms, Priya added.
Vedant Agarwala, co-founder of CodeParrot, said in a LinkedIn post that they hired and painfully had to let go of both the engineers. "We burned through the $500k we'd raised — and when we hit $1,500 MRR (monthly recurring revenue) with our final pivot (Figma-to-code using LLMs), we couldn't break through. Instead of running more experiments with a dwindling runway, we decided it was time to shut shop," he said.
The co-founder also said that start-ups are brutally hard — and pivot hell is the worst part by far.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
New Indian Express
12 hours ago
- New Indian Express
SBI to raise Rs 20,000 crore in debt capital this fiscal: Chairman Setty
MUMBAI: The nation's largest lender SBI, with a balance sheet north of Rs 67 trillion, will be hitting the debt capital market this fiscal to mop up Rs 20,000 crore bond sale, even though the bank has 'more than sufficient liquidity with which it can lend up to Rs 12 trillion'. Over the weekend, the bank reported a street-beating set of numbers with net income rising 12.5% on-year to Rs 19,160 crore in the June quarter, primarily driven by the gains from treasury operations and better asset quality. 'Last month the board had given us a go ahead for a Rs 20,000 crore debt raising. We will raise the money this fiscal even though there is no need for funds now or in the course of this fiscal as we have sufficient liquidity to lend an additional Rs 12 trillion in fresh loans. It may not be in one tranche as well,' chairman CS Setty told TNIE on the sidelines of announcing the June quarter earnings Friday. The bank expects lending to pick up once the uncertainty about the tariff war is resolved as corporates are holding back taking the money now. The bank has a project finance loan sanctioned, worth Rs 3.89 trillion, which is expected to be disbursed in the remaining period of the fiscal. Another component of the excess liquidity is the Rs 3.75 trillion in excess invested in government bonds under the SLR route, Setty said. The chairman said most of the proposed Rs 20,000 crore debt raising is replacement debt of additional tier 1 capital. This proposed fund raise would be through issuing Basel-III-compliant additional tier 1 and 2 bonds to domestic investors, the bank had said in mid July. It may be recalled that the bank had raised Rs 25,000 crore in a QIP issue making it the largest ever such fund raise through this route in the country. This would add around 30 bps to the core capital which was 11% as of March 2025, said Setty.
Time of India
14 hours ago
- Time of India
Bain Capital-backed Heartflow valued at $2.27 billion in solid Nasdaq debut
Academy Empower your mind, elevate your skills Medtech firm Heartflow was valued at $2.27 billion on Friday, with its shares surging 47.4% in the Nasdaq debut , as the IPO market gathers momentum and outrides tariff shares opened at $28 and went as high as $31.5, signaling robust investor appetite for companies leveraging artificial intelligence for sold about 16.67 million shares at $19 each in its IPO on Thursday, raising $316.7 Bain Capital-backed company's debut comes as expectations of a softer trade policy and lower interest rates boost investor sentiment , which had nosedived after U.S. tariffs in April stoked recession market sentiment reflects "nervous excitement", said Matt Kennedy, senior strategist at IPO-focused research and ETFs provider Renaissance Capital."We saw a spike in volatility last week, but at the same time stocks (are) flying up on AI-driven earnings blowouts."Space tech startup Firefly Aerospace and design software firm Figma saw stellar first-day reactions in recent days, strengthening prospects for tech-focused companies to go first-day pop could help boost market perception for other medtechs, which often rely on vast research and development expenditure, with clinical testing further pressuring the bottom Bionics and Kestra Medical had solid debuts earlier this year, but are now trading below their IPO price, like most medtech IPOs of the past year."If investors keep losing, they just won't show up and companies will struggle to raise IPO funding," Kennedy added, referring to underwhelming post-listing performance from several medtech IPOs in the past in 2007, Heartflow helps physicians diagnose and treat heart AI-enabled products can create a personalized 3D model of a patient's heart via a single specialized company's revenue rose 39% in the quarter ended March 31 from a year ago. Its losses, however, widened 55% to $32.35 million during the same period.
New Indian Express
18 hours ago
- New Indian Express
Telangana's high-powered council to propel state's USD 3 trillion vision
HYDERABAD: The Telangana government is set to accelerate its long-term development strategy, Telangana Rising 2047, with its High-Powered Advisory Council meeting scheduled for Saturday, according to senior government officials. The Council comprises a diverse group of eminent economists, technocrats, and public intellectuals, including Nobel laureate Prof Abhijit Banerjee, former RBI governors Dr Raghuram Rajan and Dr Duvvuri Subbarao, Biocon chairperson Kiran Mazumdar-Shaw and Adobe CEO Shantanu Narayen. It is tasked with guiding the formulation of a 22-year roadmap focused on inclusive growth, economic transformation, and sustainability. A senior official in the Chief Minister's Office told TNIE that the state aims to become a $3 trillion economy by promoting high-growth sectors such as startups, MSMEs, tourism, media and exports. Hub for advanced mfg, space tech and R&D Telangana also plans to position itself as a hub for advanced manufacturing, space tech, and R&D while expanding Global Capability Centres (GCCs), he said. A document accessed by TNIE showed that the vision outlines a regionally balanced development model, integrating urban, peri-urban and rural areas through innovation clusters and logistics hubs. Key social objectives include agri-tech adoption, youth skilling, women's economic inclusion, and improved healthcare and nutrition.
