7,500 Start-Ups Shut Shop in Last One Year

Investors Say Cash Burns, Lack of Planning, Poor Legal, Structural Hygiene, Lack of Product Market Fit Reasons for Shut Down

- UMA KANNAN @ Bengaluru

In just one week, two start-ups—quick fashion delivery platform Blip and AI start-up Code Parrot—have shut down, citing reasons including funding crunch. Though it is not easy to raise funds, especially after securing seed money, what bothers the start-up ecosystem is excessive cash burn and the pressure to grow fast.

TNIE spoke to many venture capitalists and investors; they said lack of clear planning and, in some cases, poor legal and structural hygiene are some of the reasons for start-ups shutting operations. As per data sourced from market intelligence firm Tracxn, 65,906 companies were shut down in India from January 2023 till date, while 7,484 start-ups were shut down from July 1, 2024, to July 18, 2025, alone. Start-ups such as Koo, Zerodha's Nithin Kamath-backed Stoa School have shut down in recent times.