Lessons Learned from Recent Startup Failures

Thrive Shuts Down After Four Years Despite Coca-Cola Backing

Mumbai-based food-tech startup Thrive announced it will cease operations after four years in business. Even with support from Coca-Cola, the company was unable to secure a lasting foothold in India’s highly competitive food delivery sector.

What Was Thrive?

Launched in 2020, Thrive set out to disrupt India’s online food delivery space. But the market was already dominated by Zomato and Swiggy, two companies with more than a decade of brand recognition, vast restaurant networks, and aggressive discount strategies. Together, they control nearly the entire industry, making it extremely difficult for newcomers to make an impact.

Thrive tried to differentiate itself by being more restaurant-friendly. While competitors typically charged restaurants commissions of up to 25% per order, Thrive offered a reduced fee structure—14% for new customers and 10% for repeat orders. This model allowed restaurants to keep a larger share of revenue, which was especially attractive in a low-margin business.

In 2023, Coca-Cola acquired a 15% stake in Thrive, signaling confidence in its growth prospects. By that time, the startup had signed up more than 14,000 restaurant partners across 80 cities. Still, it couldn’t overcome the entrenched dominance of Zomato and Swiggy, rising operating costs, and the difficulty of getting consumers to switch platforms. Key Figures

• Founded: 2020

• Restaurant partners: 14,000+ in 80 cities

• Funding raised: $2.5M across three rounds

Why Thrive Failed

1. Overwhelming Competition: Zomato and Swiggy hold near-total control of India’s food delivery market, thanks to their vast user bases and brand loyalty. Thrive’s CEO, Krishi Fagwani, admitted that competing against these giants was extremely difficult for a smaller, mission-driven startup.

2. Limited Capital: While Coca-Cola’s involvement and $2.5 million in funding looked promising, it was minuscule compared to Zomato’s $3.4 billion and Swiggy’s $3.8 billion in raised capital. Thrive lacked the resources to scale rapidly, spend heavily on marketing, or match the discounts offered by its rivals.

3. Consumer Inertia: Most customers were already locked into Zomato and Swiggy, where loyalty programs, discounts, and familiarity kept them engaged. Thrive couldn’t present a strong enough reason for users to switch.

4. Thin Profit Margins: Lower commissions benefited restaurants but left Thrive with less revenue per transaction. This reduced financial flexibility to expand operations, fund logistics, or run aggressive promotional campaigns.

The Bigger Lesson

Supporting restaurants by lowering their costs is valuable, but without strong consumer adoption, the business model becomes unsustainable. In markets where habits are deeply ingrained, startups must offer clear, immediate advantages to persuade users to change. Competing against billion-dollar incumbents requires not just innovation but also enough capital to scale quickly and absorb losses along the way.

Skin Deep Trouble: Apostrophe Shuts Down

This week, Apostrophe, the skincare startup that made personalized dermatology as easy as ordering online, announced it’s closing for good.

Just a couple of years ago, things looked bright. The company had been scooped up by telehealth giant Hims & Hers in a $190 million deal, had thousands of happy customers, and seemed perfectly positioned to grow. Fast forward to now, and Apostrophe is officially shutting its doors. So what happened?

What Was Apostrophe?

Apostrophe started out as YoDerm in 2012 before rebranding in 2019. Its mission was simple: make professional dermatology more accessible. Instead of waiting weeks for an appointment or standing in pharmacy lines, users could log on, answer a short questionnaire, upload photos of their skin, and get a treatment plan from a certified dermatologist—all without leaving home.

To make it even easier, Apostrophe partnered with pharmacies to ship prescriptions straight to customers. For people struggling with acne, rosacea, or anti-aging concerns, it felt like a modern solution to an old problem.

That focus and convenience caught the attention of Hims & Hers, which bought the company in 2021. Even after the acquisition, Apostrophe kept its own brand identity and continued operating as a specialized dermatology service. On paper, it was a win-win.

By the Numbers

• Founded: 2012 (as YoDerm), rebranded 2019

• Acquired: 2021 for $190M

• Focus: Personalized online dermatology (acne, rosacea, anti-aging)

• Shutdown: March 2025

Why It Fell Apart

• Shifting priorities: After Apostrophe was acquired, Hims & Hers shifted its energy toward the booming (but volatile) weight-loss drug market. When the FDA announced the end of shortages for Ozempic and Wegovy, Hims & Hers stock took a hit, forcing the company to cut costs and refocus. Apostrophe ended up low on the priority list.

• A smaller market than expected: Teledermatology had promise, but the niche—acne, rosacea, anti-aging—wasn’t big enough to fuel the kind of growth a large parent company needed.

• Operational overlap: Running Apostrophe separately created duplicate costs and processes inside Hims & Hers. Eventually, consolidation just made more sense.

• Brand mismatch: Apostrophe leaned heavily into skincare and beauty. Hims & Hers wanted to be seen as a broad healthcare platform. The fit wasn’t quite right, and over time, it became clear Apostrophe didn’t align with the parent company’s long-term direction.

The Bigger Lesson

For startups, getting acquired often feels like the ultimate success. But Apostrophe’s story shows that what happens after the deal is just as important. If integration doesn’t align with the parent company’s priorities, even a strong brand can disappear.

It’s also a reminder that external events—like regulatory announcements or shifts in investor focus—can ripple through a business in unexpected ways. For entrepreneurs, staying adaptable isn’t optional. It’s survival.

The Death of ANS: Flipkart Pulls the Plug

Last week, Flipkart quietly shut down ANS Commerce, a SaaS startup built to help direct-to-consumer (D2C) brands manage their online presence. The move put more than 200 employees out of work and raised bigger questions about whether independent e-commerce enablers can survive when giants like Flipkart and Amazon keep building the same tools in-house.

What ANS Commerce Was All About

Founded in 2017, ANS Commerce wanted to make life easier for brands that didn’t want to rely completely on big marketplaces. The platform offered a full suite of services:

• Brandstore tech to create and run online shops

• Performance marketing to bring in traffic and boost sales

• Marketplace management for juggling Amazon, Flipkart, and other platforms

• Warehousing & fulfillment to handle logistics and delivery

At its peak, ANS Commerce partnered with over 100 brands and had raised $2.2 million before being acquired by Flipkart in 2022 for $40 million. On paper, the deal made sense—Flipkart could give brands more independence while strengthening its own ecosystem.

The Numbers

• Founded: 2017

• Acquired: 2022 for $40M

• Brand partners: 100+

• Team size: 200+ employees

Why Things Fell Apart

• Flipkart’s changing priorities: When ANS was acquired, it fit neatly into Flipkart’s strategy of helping brands go digital. But as competition with Amazon and Reliance intensified, Flipkart doubled down on controlling the entire process itself instead of relying on third-party tools.

• Money troubles: ANS grew its revenue to about $6.5 million last year but spent $9 million to do it. In other words, it was bleeding cash. For Flipkart, there wasn’t much sense in keeping a loss-making unit alive with no clear path to profitability.

• The SaaS squeeze: Independent e-commerce SaaS players are under threat everywhere. If Amazon or Flipkart offer the same services directly, why would brands pay an outside provider?

• Integration hurdles: Like many startup acquisitions, ANS may have struggled to fit into Flipkart’s corporate machine. The culture clash between a scrappy startup and a massive retailer probably didn’t help.

Why It Matters

ANS’s shutdown is another reminder that an acquisition doesn’t guarantee survival—big companies cut side projects all the time when priorities shift.

It also shows how tough it’s becoming for SaaS startups in e-commerce. As marketplaces keep rolling out their own tools, the space for independent enablers is shrinking fast.

And perhaps the biggest lesson: revenue isn’t enough. ANS was growing, but its mounting losses sealed its fate. Without a path to profitability, even growth can’t save you.