Jakarta, CNBC Indonesia – The capital to create a startup is not cheap, it even requires trillions of funds. Even that large capital cannot be a guarantee for a start-up company to survive.
CB Insights released a report on a startup that pocketed a lot of investor funds but failed to thrive and went bankrupt in November 2018.
The reasons for the bankruptcy of the companies were varied. But there is a common thread between all cases such as the inability to generate sustainable income, poor product compatibility with markets, losing competitiveness, and running out of money.
Here is a list of 5 startups with the biggest bankruptcies in history:
Investor Kenamaan: Redpoint Ventures, US Venture Partners
Total funds disclosed: US$1.22 billion (Rp 17 trillion).
This solar startup is out of business as it faces competition from conventional solar power companies such as China’s Suntech Power Holding Co Ltd and US-based First Solar Inc.
Solyndra struggles to make a profit. The company also said it was evaluating options including selling the business and licensing its copper indium gall selenide (CIGS) technology.
Investor Venture Capital (VC) kenamaan: Khosla Ventures, Sequoia Capital, Kleiner Perkins Caufield & Byers
Total funds disclosed: US$929.9 million (Rp 13.018 trillion)
Jawbone, a wearables startup, declared bankruptcy in July 2017. The company failed to maintain a significant market share in its line of headsets, fitness trackers and wireless speakers.
This bankruptcy is one of the startup failures recorded in history. Unfortunately, Jawbone can’t maintain it even though it’s been around for 17 years.
3. Abound Solar
Top VC investors: Technology Partners, DCM Ventures, BP Alternative Energy Ventures
Total funds disclosed: US$614 million (Rp 8.596 trillion).
This startup is engaged as a producer of cadmium telluride thin film photovoltaic modules for solar panels. In addition, it is also supported by the United States Department of Defense (USA) and grants from the US Department of Energy.
Abound Solar had US$614 million in total funding when it entered 2012. This is the most expensive startup failure according to CB Insights.
Investor VC kenamaan: BlueCross BlueShield Venture Partners, Rupert Murdoch, Walgreens
Total funds disclosed: US$500 million (Rp 7 trillion)
Theranos is a new way of blood testing that can detect various diseases with a small puncture of a single finger. But finally closed and has given a letter to the shareholders.
“We’re now running out of time,” David Taylor, the company’s chief executive and general counsel, said in the voice. He declined to comment further and said the letter was clear.
5. Optical ReVision
Top VC Investors: InterWest Partners, Canaan Partners, Domain Partners, ProQuest Investments
Total funds disclosed: US$172 million (Rp 2.408 trillion).
The startup is developing an implantable corneal device to treat presbyopia, a vision condition that causes the eye to lose its ability to focus on nearby objects.
This segment, president and CEO John Kilcoyne admits, is very challenging. He also said the reason for his company’s closure was because it “couldn’t make the business grow fast enough.” In addition, ReVision needs more capital to achieve positive cash flow and investors are said to be unwilling to give more money.
Investors: Small Capital Crypto Startup, Direct Money