Starting a business is always a risk regardless of how much experience a person has in the field or how much money a business owner has to invest in their plans and ideas. But at the end of the day, with the high risks of entering an industry, there’s always a high reward to come along with it. 

Most people worldwide would dream of having their own business primarily because of two main reasons — freedom and profit. It’s not surprising to anybody that owning a business of your own unlocks a whole new world of freedom that one would rarely get in your typical corporate job working 9 to 5. 

Plus, a massive potential for income if you play your cards. it is just too much of an opportunity to pass up. A number of entrepreneurs have bravely taken up the challenge of running a business. 

However, the world of entrepreneurship is not an easy one, and there are plenty of promising companies that turn out to be failures. 

Here are some of the world’s biggest startup failures that have received superstar attention but have failed to keep up with the high expectations in the long run. 

1. MoviePass 

The case of MoviePass is a classic scenario of “too good to be true.” The movie service company announced that it was going to offer its subscribers a sweet deal of unlimited movies every month for the price of only $9.95. 

Sure enough, customers came flocking to subscribe — so much so that MoviePass could not keep up with the demand, losing over $20 million every month. 

The company tried to cut down expenses by secretly limiting the movies customers could watch and abruptly resetting their passwords. As expected, the cheap move backfired against MoviePass, and its once loyal customers left the subscription service for good until the business closed its doors in 2019.

2. Hipmunk 

The booking and travel-related website Hipmunk was created by Steve Huffman and Adam Goldstein with a whopping capital of $55 million. Hipmunk was eventually acquired by the travel service company SAP Concur. 

However, as the travel industry continued to grow in size, companies besides SAP Concur had already been locked in an intense competitive rivalry that has pitted businesses against each other in pursuit of the highest possible profits for the lowest possible expenses. 

Unfortunately, Hipmunk’s appeal to customers had slowly gone down throughout the years, and its parent company had no choice but to permanently shut down its operations as SAP Concur restructured its operations.

3. Lytro 

Lytro was an incredible startup company back then that promised investors a new and advanced light-field camera technology that would be groundbreaking for its time. 

Collecting a massive $215.8 million in startup funds, Lytro developed light-field technology, which would be later used as a component of the popular entertainment platform Virtual Reality or VR. 

However, the initial imaging technology marketed to photographers was not doing as well as they expected, which inclined Lytro to switch to VR. Critics pointed out the poor quality of Lytro technology which was essentially worthless to its intended market.

4. Munchery

Munchery was a startup that did well during the first years of its operations. Munchery’s business model revolves around delivering microwaveable gourmet meals to customers in the comfort of their homes. 

Confident in its profitability, Munchery had expanded its business by establishing production kitchens in hotspot cities such as New York and Los Angeles. 

However, as competition in the industry grew more intense with the emergence of companies such as DoorDash and the rising costs of building and maintaining kitchens in several areas, Munchery was forced to close down its operations gradually. The startup initially pooled a total amount of $125 million worth of venture capital.

5. Quibi 

Quibi was a streaming service company that tried to hop into the trend of subscription-based entertainment adopted by companies such as Netflix. However, the case of Quibi’s failure is a mix of both bad luck and a business model that was not too well received by its target customers. 

What set Quibi aside from its competitors was that it offered content designed to be short such as 10-minute movies. The initial packages that Quibi offered began from $4.99 for content with ads and a higher tier package at $7.99 that removed ads. 

Daring enough to launch their business just at the height of the coronavirus pandemic, critics had already predicted Quibi’s downfall. And unsurprisingly enough, Quibi had shut down just six months after its launch — losing over $1.75 billion worth of investor’s funds in the process.

6. ScaleFactor

As with any business that had to go through the recent coronavirus pandemic, ScaleFactor is another company that suffered major losses in sales due to the unstable economic environment. 

However, ScaleFactor — a business that promised customers a smooth accounting system powered by Artificial Intelligence of AI — had to face more issues. Investigations discovered that ScaleFactor outsourced its accounting services from the Philippines instead of its promised AI program. The startup, which had over $100 million in investor funds, never recovered. 

7. Jawbone 

Previously known as Aliphcom, Jawbone was a company that had years of experience under its belt — and during its long history in the industry, Jawbone has relatively done well for itself, even reaching a peak net worth of $3 billion with over 450 workers employed. 

First selling military-level audio tech, Jawbone eventually shifted its efforts to wireless headsets and speakers. 

Seeing more opportunities, the company then tried to expand to the health and fitness industry as well — a move that would cost the company due to several product issues and other related problems. The startup Jawbone, which received over $991 million in funding, would eventually be a massive failure.

8. Anki Incorporated

Anki was a company that tried to break new ground in the technology industry. The business’ intention was to combine artificial intelligence tech with mainstream kids' toys, such as a racecar controlled via an app (Anki Drive) and a highly developed toy figure called Cozmo. 

While the company was able to collect over $182 million in venture capital from investors, Anki Incorporated’s assets were still not enough to fully fund both its hardware and software operations. 

9. Mixer 

Mixer, the company previously known as Beam that was acquired by tech giant Microsoft, was an ambitious project intended to become the next big streaming platform on the Internet. 

While founders James Boehm and Matt Salsamendi retained control over the company, their combined efforts were not enough to beat its competitor Twitch, which Amazon owned. 

Microsoft eventually closed down Mixer due to the apparent fact that the company was unable to keep up with the intense competition in the industry. 

10. Chef'd

Chef’d was a startup failure that caught everybody off guard. Just a few months before it officially closed, the meal kit company had already made major deals with partners and expansions in several hotspot locations. 

However, the high-flying company would come to a crashing halt after founder Kyle Ransford reported the end of Chef’d due to “financial setbacks.” Chef’d initially pooled a total of $35 million in venture capital funds.

11. Layer

Layer was another ambitious startup that tried to revolutionize the communication industry by introducing Voice over Internet Protocol (VoIP) to regular communication processes. As the name implies, voice calls would solely be sourced via Internet cloud services rather than the typical broadband lines. 

However, during the time, the industry itself was rapidly developing, and competition intensity was at an all-time high. Despite the initial $44 million funding that the company received, Layer’s efforts were not enough to keep up with its rivals.

12. Beepi

Taking advantage of the benefits of wireless communication and interaction via the Internet, Beepi was a startup that tried to establish a virtual marketplace that primarily dealt with buy-and-sell activities for used cars. Investors had high hopes for Beepi, and a total of $60 million was collected in funding. 

However, inefficient financial management would cause issues for Beepi — at one point, monthly salaries amounted to $7 million, with only the top officials getting a significant share. Beepi was eventually shut down in 2017 after four years in the industry.

13. Quirky

Taking advantage of the benefits of wireless communication and interaction via the Internet, Beepi was a startup that tried to establish a virtual marketplace that primarily dealt with buy-and-sell activities for used cars. Investors had high hopes for Beepi, and a total of $60 million was collected in funding. 

However, inefficient financial management would cause issues for Beepi — at one point, monthly salaries amounted to $7 million, with only the top officials getting a significant share. Beepi was eventually shut down in 2017 after four years in the industry. 

14. Arivale

Arivale was almost close to changing the entire playing field when it first became public. The business model of Arivale was centered around using the customer’s genetics to develop a personal coaching and wellness program. 

Surely enough, the idea was a hit, and people were more than happy to avail of Arivale’s services, generating over $52.5 million in funding. 

However, the company would not survive in the long run as it was soon discovered that the expenses of running Arivale were too high compared to the profits. 

15. Homejoy

Homejoy was a startup intended to be an online platform where professional cleaners can be set up with clients needing their services. Collecting around $38 million in initial funds, Homejoy was set. However, the aggressive promotions, poorly planned expansion and incomplete cleaner training, led to the demise of Homejoy not long after it was first announced to the market. 

16. Yik Yak 

Yik Yak was on its way to becoming one of the hottest things on social media. Offering a platform to users where they can post anything anonymously, the mobile app was especially a hit among students. 

Growing their initial $74 million capital into an impressive $400 million net worth, Yik Yak showed no signs of slowing down. However, poor decision-making among executives led to the platform's downfall after it was announced that the anonymous feature would be removed. 

Things turned from bad to worse after colleges and universities banned the app from their establishment after it was discovered that cyberbullying was at an all-time high due to Yik Yak. The fad soon died down, and the startup has never bounced back from failure. 

17. Peppertap 

Peppertap was a mobile app that had the intention of changing the landscape of grocery shopping as we know it. 

Establishing a solid network of local grocery stores that can offer partnerships with their app’s delivery service program, Peppertap had to do more than just make the variety of their selections more appealing. The company also pushed for more discounts and deals to attract more customers to use their app for their grocery needs. 

While the intentions were great, Peppertap lost a lot of money on the business model, and despite the $51.2 million initial funding it gained, the company had to close down after it kept on sustaining losses with every order placed.

18. Videology

Videology is one of the more surprising startup failures on this list. Developing a business model that sought to monetize content by partnering up with advertisers and showing the corresponding statistics to its users, Videology created a strategy that would go on to become massively profitable for big companies such as Facebook and Google — which also was a part of the cause of Videology’s downfall. 

Companies such as Google had established policies detrimental to Videology’s growth, such as making all advertisements exclusive to Google only. While Videology had a great head start with over $201 million in collected funds, the company could not keep up with the times and the growing competitive rivalry in the industry. 

19. Rethink Robotics

As the name implies, Rethink Robotics was a company that primarily dealt with improving robotic technology used in factories and other manufacturing processes. The company’s notable works were the Baxter and Sawyer models, which they sought to improve on in the coming years. 

However, Rethink’s tech would not translate well into the work environment and instead was better put to use in the research and training sectors. Despite an initial $150 million in capital, the company could not thrive in the long run.

20. Theranos

Theranos was a medical technology startup that reached mainstream levels of infamy after it was discovered that CEO Elizabeth Holmes had misled investors into believing that she and her company had created a portable blood analyzer that was both efficient and cost-effective. 

The promise of Theranos’ product attracted many investors, and the company raised over $724 million. The product would never materialize, and the lawsuits came piling in for Holmes and Theranos. 

In the end, not only did the company come crashing down, but investors in the company also suffered significant financial losses.