The Most Expensive Startup Failures in History
Startups are incredibly difficult to pull off. While there have been some success stories, an estimated 75 to 90% of new businesses fail. Some, like the ones we’ve compiled from CB Insights, really fail!
From big dreams and viable products undone by poor management to terrible ideas that not even the savviest entrepreneur could fix, let’s take a look at the most expensive start-up fails in history.
Total disclosed funding: $99.9 million
Would you spend over $700 on a high-end juicer? When Juicero launched in 2016, it banked on it. But customers didn’t bite. Or should we say drink? Especially when news broke that users could squeeze Juicero’s pre-made fruit and vegetable packets faster with their two hands than with the machine, rendering Juicero practically useless. It folded 16 months later.
Total disclosed funding: $103 million
Primary Data was a data virtualization startup that attracted the likes of Apple co-founder Steve Wozniak to its management team and raised $100 million in equity. However, its technology wasn’t compelling enough to attract investors or Fortune 500 companies and the California-based startup ended after a four-year run.
Total disclosed funding: $104 million
ScaleFactor was an accounting and finance software application that promised to automate bookkeeping. When the Austin-based startup folded in the summer of 2020, CEO Kurt Rathmann cited the COVID-19 pandemic as the reason for its failure. However, employees noted that ScaleFactor focused too much on expensive marketing and not enough on development. They also claimed that sales started to decline before the pandemic, but executives hid it.
Total disclosed funding: $108 million
Founded in 2005, ChaCha was like a human Google. Users went to the website and asked specific questions, which would be researched and answered by human guides. It reached a peak in 2012 with millions of monthly users, but Google’s improved search engines and the invention of smartphones, Siri made human guides rendered ChaCha obsolete. The startup ended in 2016 after having answered over two billion questions.
Total disclosed funding: $110 million
Chinese company Beequick provided one-hour delivery of fresh produce and other products from convenience stores to over 250,000 customers in Beijing. The company had plans to expand to other cities but ultimately Beequick failed to create a big enough buzz to sustain the business. The company ended in 2016.
Total disclosed funding: $110 million
Pets.com launched in 1998 as an e-commerce website for pet supplies and quickly barked into the market. It had the backing of Amazon and featured clever commercials with dog puppets, one of which appeared during the Superbowl. But in 2000, Pets.com whimpered out of business in the dot.com bust, due to overspending (like that Superbowl ad!), mounting losses and an unsustainable business model.
Total disclosed funding: $110 million
How many times have you said, “I should have trusted my gut?” San Francisco startup Ubiome banked on those who didn’t or, more specifically people who were willing to pay for at-home tests where they’d send in a fecal sample and receive detailed information about their gut health. If this sounds shady, you won’t be surprised that Ubiome was raided by the FBI in 2019 over claims of billing fraud and other illegal practices. The company filed for bankruptcy and was later bought for 1 percent of its original value.
Total disclosed funding: $114.3 million
Launched in 2000, Coraid was a startup that sold storage hardware for companies’ data centers. Despite attracting more than 1,700 customers in the fields of telecommunications, healthcare, aerospace, manufacturing, and government clients including the U.S. Department of Defense and the National Institutes of Health, Coraid experienced funding shortfalls and ended after a five-year run.
Total disclosed funding: $116.2 million
Founded in 1997, RealNames was a company that fostered the idea of using keywords to search for things on the internet. Backed by the belief that they were providing an easier way to find information, the company raised $130 million in funding but shut down in 2002 when its primary partner, Microsoft, didn’t renew its contract.
Total disclosed funding: $116.5 million
OnLive was the world’s first notable video game streaming service with a promising business model that allowed players to rent games for their computers or smartphones without clogging up the memory. The service, however, received a mixed reception with heavy complaints about videos that lagged or had poor quality. The company went under in 2014 and its patents were later acquired by Sony.
Total disclosed funding: $117 million
Before Seamless and Uber Eats, Munchery allowed users to order meals from gourmet chefs and have them delivered to their door. In 2010, this idea was big enough to secure $125 million in funding. Yet despite its ambition, Munchery struggled to deliver on its promise. It struggled for years, changing its business model to deliver meal kits instead of prepared food and opening a shop in San Francisco BART station, but customers munched on their food elsewhere.
Total disclosed funding: $117.5 million
A year before Spotify, Rdio was a $5, web-only music streaming plan. Its attractive features, such as a welcoming interface, catalog of seven million songs and seeing what your friends were listening to, made for a pleasing alternative to iTunes. But just a few months into its launch, Spotify attracted more attention. Where their competition excelled in marketing and distribution, Rdio failed; ultimately it was no match for Spotify’s larger music selection and free service.
Tink Labs (hi Inc.)
Total disclosed funding: $125 million
Based in Hong Kong, Tink Labs provided hotels with smartphones that their guests could use for free and quickly became one of the country’s first unicorns (a company valued over one billion dollars, not the mythical creature). Despite working with major brands like InterContinental, Hyatt and Shangri-La Hotels, Tink Labs suffered from mismanagement of its funds and competition from hotel guests themselves, who brought their own smartphones.
Total disclosed funding: $125 million
The sky was the limit for this start-up, which was owned by Google’s parent company, Alphabet and whose name was short for Balloon (but crazy as a loon seems befitting too!). Loon aspired to bring Internet access to remote or hard-to-reach destinations via high-up-there balloons. But its plans deflated after nine years when the company couldn’t “get the costs low enough to build a long-term, sustainable business” according to CEO Alastair Westgarth.
Total disclosed funding: $128 million
A Chinese start-up in the autonomous driving industry, Roadstar.ai quickly raced to success, raising $128 million within a year of its launch. But in its second year, the company took a wrong turn. Chief scientist Guang Zhou was accused of hiding codes, taking kickbacks and falsifying data government reports and was fired – against the wishes of the company’s board. The infighting caused investors to drive away with their money and parked the company for good.
Pay By Touch
Total disclosed funding: $130 million
In 2003, Years before phones featured fingerprint and facial recognition, Pay By Touch provided the opportunity to pay for things with the touch of a finger. The concept attracted over $340 million in investments but fell in the hands of founder John P. Rogers, who was accused of fraud and spent so much money trying to buy up rivals that the company couldn’t afford to pay its employees. Investors balked and the public kept their hands to themselves, preferring to use cash or credit cards. The company filed for bankruptcy in 2007.
Total disclosed funding: $133.8 million
Launched in 1999, AllAdvantage.com was one of the first businesses to offer consumers monetary incentives for browsing the internet. Users earned $0.50 an hour if they allowed a banner that flashed different ads on their computer screens. However, the company experienced user fraud and a large teen audience that the service attracted didn’t excite advertisers. The company was further plagued by a significant reduction in web traffic and online ad spending after the burst of the dot-com bubble. It ended in 2001.
Total disclosed funding: $135 million
Boo.com was a European company that operated fashion-themed websites where customers could zoom in on clothing and try on items through virtual mannequins. Though many e-commerce websites now feature these options, in 1999 critics claimed Boo.com was too advanced to be a good fit for users, especially those who didn’t have high-speed internet connections and got frustrated when items wouldn’t load. The company also spent too much on advertising and not enough on changing technology, while not experiencing a lot of sales. After two years, Boo.com folded its clothing shops.
Total disclosed funding: $147.7 million
Beep’s idea of establishing a person-to-person platform for buying and selling cars came with a lot of promise. Who likes going to sketchy used car dealerships, right? But poor management ran Beepi into the ground. Executives burned through money. One month saw seven million dollars paid to salaries, not to mention a $10,000 sofa. Plus, there were logistical issues, such as lags in getting car titles and license plates to customers. This kind of carelessness proved too costly for the company to succeed.
Total disclosed funding: $150.4 million
Lilliputian Systems developed a product called Nectar that used butane gas to power portable electronics. Its revolutionary approach to batteries attracted investors and partnerships with companies such as Brookstone, but an employee mass exodus and lack of funding caused the company to burn out before Nectar hit the market.
Total Disclosed Funding: $157 million
As its name implies, Drugstore.com was an online store that sold health and beauty products. It initially did very well, selling for $65 a share in 1999, but by the time the company ended in 2016 that same share was $3.80. Despite being bought by Walgreens in 2011, Drugstore.com didn’t turn a profit and was put to rest by its parent company, which wanted to focus on in-person shopping.
Total disclosed funding: $158.4 million
A UK company, Wonga offered short-term loans (at a high cost) across Europe, and in Canada and South Africa. It went well for a while – but trouble began when people struggled to pay back what they’d borrowed. Additional problems surfaced, including losing sponsors, a data breach in 2017, complaints from customers and increased scrutiny from the authorities and political leaders, who criticized Wonga’s high interest rates and misleading debt collection practices. Despite a £10 million injection from shareholders, Wonga couldn't pay its own debt and collapsed.
Total disclosed funding: $164.2 million
Launched in 2009, Quixey was billed as “The Search Engine for Apps.” Through big investors such as Alibaba, Quixey acquired over $160 million and expanded its services to create a digital assistant for apps. Unfortunately, companies like Apple and Google were also developing their own digital shortcuts. The competition killed Quixey in 2017.
Total disclosed funding: $172 million
Like several others on this list, this startup strived to enhance the health field. The company developed a device that could be implanted in a person’s cornea to treat presbyopia, a condition that makes it hard for eyes to focus on nearby objects. Despite performing over 1,000 procedures the company found the market “very challenging” and “could not get the business to grow fast enough,” according to president and CEO John Kilcoyne.
Total disclosed funding: $176.3 million
U.K.-based Powa Technologies created PowaTag, a mobile payment technology that enabled users to scan an item on their phone and purchase it within seconds. In its first year, the startup had $76 million from investors and was later worth almost $2.7 billion. But the well dried up under bad management, reckless spending and overblown claims that the company would be “bigger than Facebook or Google.” The hyperbole freaked out investors, many of which had only signed letters of intent and not yet made financial contributions, so Powa wasn’t so financially “powaful” after all.
Total disclosed funding: $185.3 million
Launched in 2009, Quirky fashioned itself as a platform for professionals to meet and develop “needed” ideas. The idea took off and the startup received $169.5 million in funding, a partnership with General Electric and was featured on CNN. But its product was deemed mediocre, expensive to produce and didn’t collect much revenue. So, in the end, Quirky was too full of, well, quirks to succeed, the victim of big dreams without a solid business model. It later sold for a mere $4.7 million.
Total disclosed funding: $194 million
Panda TV, a Chinese live-streaming platform was founded in 2015 and by 2018 it was the third-largest service of its kind in China. But over the years, the startup experienced financial hardships as it struggled with the cost of broadband servers and paying celebrity salaries. And when celebrities left for other streaming services, viewers went with them. Unable to keep up, Panda TV shut down. Its farewell message was accompanied by a panda bear walking off into the distance and saying the word “Bye.”
Total disclosed funding: $196.6 million
Battery technology and manufacturing firm Aquion Energy created the Aqueous Hybrid Ion (AHI) energy storage and battery systems, an electrochemical approach to bulk energy storage that was also low-cost. Despite its effort, the company couldn’t survive a tough market, according to CEO Scott Pearson. “Creating a new electrochemistry and an associated battery platform at commercial scale is extremely complex, time-consuming, and very capital intensive. Despite our best efforts to fund the company and continue to fuel our growth, the Company has been unable to raise the growth capital needed to continue operating as a going concern,” he said.
Total disclosed funding: $205 million
Established in 2010, Anki was a robotics and artificial intelligence startup out of Carnegie Mellon that wanted to take children’s toys to the next level. During its decade-long run, Anki raised $182 and released products such as Anki Drive, a race car and track set that could be controlled with a phone app, and a robot named Cozmo. Their products were unique and performed well, but unlike other companies, Anki suffered from being too modest; its product price tags were simply too low to sustain the company.
Total disclosed funding: $229 million
In 2016, Mode Media shut down without warning and sent shockwaves through the industry. A digital publishing company with a focus on fashion, beauty and lifestyle, Mode Media had reached unicorn status and its wide audience reach put it in the top ten most popular internet media companies in the United States. However, Mode failed to pay attention to the mood of its finances and tried to expand without having the means to back it up. Like several other startups, too much debt resulted in its collapse.
Total disclosed funding: $252.9 million
KIOR had big dreams for biofuel. The company was backed by famed venture capitalist Vinod Khosla, who invested millions of dollars and attracted other big names such as Bill Gates. But all of these wealthy cooks in the kitchen proved to be a recipe to overspend. When KiOR filed for bankruptcy a few years after its inception, the company had blown through $600 million and only generated $2.3 million in revenue. It also fueled rage from the 2,067 creditors it left dry, including the state of Mississippi, which had given KiOR a $75 million loan – all of which brought on lawsuits. The company eventually flamed out.
Total disclosed funding: $256.5 million
Kozmo was a delivery service that brought just about anything, including books or a Starbucks frappuccino, to your door in under an hour. Even better: there was no delivery fee! Kozmo was popular with investors, earning over $250 million, but failed to turn a profit and buckled in the dot-com bust. Maybe they should have charged that fee?
Total disclosed funding: $275.2 million
In 1999, Webvan strived to revolutionize the supermarket industry by taking orders online and delivering groceries to customers’ front door. At that time, this was so big it attracted $800 million from venture capitalists. But the company’s plan spoiled when it didn’t develop the kind of following it banked on. Additionally, customers complained that their service wasn’t as convenient as advertised because you had to order your groceries a day or more in advance and be home for deliveries. Essentially, the company tried to grow without having the demand and paid the price.
Total disclosed funding: $296.3 million
With a promise that it was the future of the oil industry and former NASA engineer Erlend Olson at its helm, Terralliance Technologies attracted billions from investors. Its core plan was to use low-flying planes to find oil fields. The planes, according to Olson, could identify things like electrical signals and chemicals in the air – things bigger oil companies couldn’t do. Fishy as that sounds, the investors bought into it, while Olson spent their money like a “Saudi prince” that included globetrotting and buying expensive fighter jets. He was eventually ousted, but it was too late; oil prices had plummeted and the company tanked… and not in the good oil way.
Total disclosed funding: $305 million
Launched in 2014 as a property listing service, Aiwujiwu quickly labeled as one the “fastest-growing unicorns in the business.” It reached a valuation of $1 billion in just 18 months and, at its peak, cornered 28% of the Shanghai rental market. But the company eventually buckled under stiff competition and lost revenue.
Total disclosed funding: $324.5 million
Amp'd Mobile was a cellular phone service launched in 2005 that targeted people 18-to 35-year-olds and attracted big-name investors like MTV Networks. However, while this demographic liked using their phones to download music or play games they weren’t fans of paying their bills. When the company filed for bankruptcy in 2017, court documents revealed that more than half of its subscribers were recorded as non-paying customers. Without funds, Amp’ed Mobile left its carrier, Verizon Wireless, holding the line. The dispute between the two companies left Amp’ed without any more juice to run on.
Total disclosed funding: $330 million
Founded by former Android creator (and former Google executive) Andy Rubin, Essential Products was an electronics startup that became a unicorn before launching a single product. The result was a letdown. Its first release, the Essential Phone, earned mixed reviews and didn’t captivate consumers. In 2018, things got worse when news broke that Rubin had been accused of sexual assault during his time at Google and that the company had allegedly covered it up. Aside from the controversy, the company failed to deliver on its promises of a Siri-type virtual assistant. With dwindling interest from the public and its investors, the company was deemed non-essential and stopped business after three years.
Total disclosed funding: $500 million
Launched in 2003 by Elizabeth Holmes, a 19-year old who’d Stamford to revolutionize healthcare, Theranos promised blood-testing devices that were quicker, more accurate and would reduce costs. The hype attracted investors such as Rupert Murdoch, Walgreens and BlueCross BlueShield, and Theranos quickly raised $500 million. However, the company came to a halt in 2018 when Holmes was exposed as a fraud. She was brought up on criminal charges and is still awaiting trial.
Total disclosed funding: $614M
This solar power manufacturer started at Colorado State University in the early 2000s, then expanded to its own Indiana factory in 2010. Using a chemical called cadmium telluride rather than silicon cells, the company provided a cheaper means of solar energy. Its future seemed bright when it attracted $614 million from investors, but when the price of silicon cells dropped Abound’s benefits were eclipsed. The company shut operations in 2012.
Total disclosed funding: $675.3 million
Founded in 2007 by Israeli entrepreneur Shai Agassi, Better Place was an electric car start-up that aimed to outrace companies like Tesla. With big ideas, like battery swapping stations where dead batteries could be replaced by fresh ones in a matter of minutes, the company raised more than $900 million from investors such as HSBC and Morgan Stanley. However, the logistics and high costs put the brakes on Better Place’s ideas. The company proved too costly to maintain and only put about 1,000 cars on the ride before it filed for bankruptcy.
Total disclosed funding: $929.9 million
In 2014, this San Francisco-based startup entered the wearable tech market with big plans. Though the market was already very crowded, Jawbone had the backing of Sequoia Capital, Kleiner Perkins Caufield & Byers and Andreessen Horowitz, prominent board members such as Yahoo CEO Marissa Meyer, and a fitness tracker named “UP” poised to take on Fitbit. But customers didn’t run to buy it. A year later, Jawbone had only cornered three percent of the fitness tracker market and its speakers and headphones weren’t selling well, either. By 2017, Jawbone stopped making its fitness trackers and began liquidating its assets, a victim of overfunding and an inferior product.
Total disclosed funding: $1 billion
Founded by rocket engineer Brogan BamBrogan, who worked for Elon Musk's SpaceX and Hyperloop One, Arrivo wanted to create its own hyperloop transportation system and end traffic jams. Its technology differed from other hyperloop plans; instead of traveling through a vacuum tunnel, Arrivo’s system would use magnets to reach speeds of 200 miles per hour. However, Arrivo failed to attract enough investors and never got on track for success.
Total disclosed funding: $1.22 billion
Like Abound Solar, Solyndra a solar power company burning for a profit. The company got off to a hot start, including a glowing endorsement from the Obama administration for its tech innovation, and got a $535 million federal loan guarantee and $1.2 billion from investors such as Redpoint Ventures, US Venture Partners and billionaire businessman George Kaiser (also a huge Obama donor). And again like Abound Solar, Solyndra struggled when silicon prices dropped (its panels used polysilicon) and the company filed for bankruptcy in September 2011. Additionally, its management team was brought up on charges of misleading the U.S. government and found guilty of “financial mismanagement.”
Total disclosed funding: $1.7 billion
LeSports wanted to be number one in streaming live sports; instead, it’s one of our most expensive fails! Created in 2014 under Chinese parent company LeCo, the service was backed by firms such as HNA Capital, Caissa Travel, and Fortune Link, but the owner, Jia Yeuting, ran into cash shortages when he tried to expand the business. In 2019, Yeuting’s mounting debts, unpaid rent and questionable business practices caused a scandal. In response, he filed for bankruptcy, dissolved LeSports with a huge loss – a whopping $1.7 billion!
Total disclosed funding: $1.75 billion
Founded by Hollywood heavyweight Jeffrey Katzenberg and former HP CEO Meg Whitman Quibi seemed poised to succeed, thanks to investors like Pepsi and Walmart, stars like Liam Hemsworth and diverse programming. However, launching a streaming service meant to be watched on the go during a pandemic – when people were staying home and less likely to spend money on unnecessary items – wasn’t the smartest idea. Quibi struggled to find viewers, sponsors withheld their money and the streaming came to an end just six months after its launch.