Shutdown of an era : Toplyne
It is a surprise as shutdown of the San Francisco and Bengaluru- based SaaS startup, Toplyne takes place after becoming one of the few from well-funded segment to halt services.
The firm so far had raised more than $17 million from investors such as Peak XV and Tiger Global. Toplyne also gathered attention for its commitment for returning its remaining capital to investors, which highlighted the importance of ethical practices in the startup world.
Apart from Toplyne, there are a bunch of other startups that have shut down and returned the capital to their respective investors after struggling to establish a sustainable revenue model.
The firms have come across challenges for instance- funding shortages, cash flow problems, and adverse market conditions.
Statistics of the shutdown- Toplyne and others
According to this data, as of 12th October, 8 Indian startups have refunded the investments to their investors either after halting services or unsuccessful pivots.
This is accounted for 50% of overall shutdowns that have occurred so far in this current calendar year.
Read more about this only at- Startups Refund Investors Amid Shutdowns and Failed Pivots (infomance.com)
History of shutdowns so far
This trend had been set by Paras Chopra’s startup named Nintee in April this year, which had refunded the capital after it failed to sustain, followed by other notable startups such as Edtech firm Bluelearn, trading platform Investmint, and agritech company Greenikk. Greenikk, which raised $3 million in secrecy mode, is among the most recent to announce a refund.
The long list of startups that took this ethical route which also includes Convenio, which is launched by former Swiggy executive- Karthik Gurumurthy who similar to other founders faced challenges which includes market conditions, unsustainable revenue models and funding problems.
Remarkably, the fashion tech startups- Fashinza and Virgio also refunded investors after getting failed to gain friction with their initial business models.
The one firm, Virgio which is led by former Myntra CEO Amar Nagaram raised more than $37 million before returning capital, while the other company, Fashinza which is the highest funded among all the startups, raised $150 million in equity from eminent investors for instance Mars Growth Capital, Elevation Capital, and Prosus before shutting down.
Shutdowns trend
The trend of returning refunds is rising and is reflective of the emerging importance which is placed on strong values and ethics in the startup environment, which is a shift from the traditional ways. In addition to this, the investors are now working more closely with founders which allows for more faster decision making on shutdowns and closures when the business models are unable to perform.
While the shutdowns have been long part of the startup ecosystem, this step of refunding capital indicates a shift towards transparency and accountability in how the founders manage investor relationships.
The decision is often seen as a way to keep the long-term reputational value for the founders especially in now-a-days connected startup environment.
Conclusion
It is a surprise as shutdown of the San Francisco and Bengaluru- based SaaS startup, Toplyne takes place after becoming one of the few from well-funded segment to halt services.
The firm so far had raised more than $17 million from investors such as Peak XV and Tiger Global. Toplyne also gathered attention for its commitment for returning its remaining capital to investors, which highlighted the importance of ethical practices in the startup world.
The long list of startups that took this ethical route which also includes Convenio, which is launched by former Swiggy executive- Karthik Gurumurthy who similar to other founders faced challenges which includes market conditions, unsustainable revenue models and funding problems.
The one firm, Virgio which is led by former Myntra CEO Amar Nagaram raised more than $37 million before returning capital, while the other company, Fashinza which is the highest funded among all the startups, raised $150 million in equity from eminent investors for instance Mars Growth Capital, Elevation Capital, and Prosus before shutting down.
Read more such articles only at- Indian Startups Secure Major Funding And Acquisitions From October 7 To 12 – 24 Khabre