Recent Failures

BluSmart

BluSmart was a startup with an ambitious goal of reinventing ride-hailing in India. The company promised everything Uber and Ola did not: electric vehicles rather than fossil-fuel vehicles, full-time salaried drivers rather than gig workers, fixed pricing rather than surge pricing, and full operational control from the app to the charging hub. For a moment, the model seemed to work. By 2023, BluSmart operated thousands of EVs across Delhi NCR, supported by its own charging infrastructure, and positioned itself as a cleaner, fairer alternative at scale. But the system was fragile. Salaries, vehicle leases, charging stations, and maintenance costs were all fixed, leaving no room to adjust when growth slowed and funding tightened. Governance failures accelerated the collapse after more than $31 million in EV expansion funding—much of it public money—was diverted by co-founders for personal use. Operational complexity further squeezed margins, as BluSmart sought to operate a capital-intensive logistics business on top of a ride-hailing app in a still-developing EV ecosystem. When the company introduced peak pricing in early 2024, it broke its core promise and eroded customer trust. What remained was the fallout: roughly 10,000 drivers without work, 800 employees displaced, and a cautionary reminder that good intentions, public capital, and ethical branding cannot compensate for brittle economics and weak governance.

Zero Co

Zero Co was a startup that was rethinking how everyday household products are packaged and sold. The Australian startup raised more than $13 million to replace single-use plastic packaging in items such as shampoo, dish soap, and laundry detergent, betting that consumers would embrace refill systems and sustainability at scale. The idea was compelling: reusable bottles made from ocean plastic, refill pouches designed for reuse, and a mission tied to cleaning up millions of bottles from the ocean. But the execution proved costly. Zero Co’s original model required customers to mail back empty pouches for cleaning and reuse, creating costly reverse logistics and operational complexity that drained time and cash. In late 2023, the company attempted a reset with ForeverFill—paper-based refills, redesigned bottles made from recycled materials, and concentrated formulas intended to reduce plastic and shipping costs—but the rollout stumbled when packaging defects led to leaks, refunds, and the suspension of launches. Despite strong branding, record-setting crowdfunding rounds, and genuine transparency from leadership, the company never found a repeatable growth engine. Product complexity remained high, margins stayed thin, and consumer habits in a price-sensitive category proved hard to change. Ultimately, Zero Co demonstrated that sustainability alone doesn’t guarantee scale, that crowdfunding isn’t a substitute for durable demand, and that when the product is the packaging, it must work flawlessly—or the business doesn’t work at all.

Otipy

Otipy was a pandemic-era bet on scheduled grocery delivery built around connecting farmers directly to urban households. Backed by $44 million in equity and debt, the startup scaled quickly during COVID, using a network of local resellers—often homemakers and small shopkeepers—to handle last-mile delivery within their communities. The model avoided building a massive delivery fleet, reduced intermediaries, and used demand-forecasting algorithms to keep production waste unusually low. On paper, it worked: by FY24, Otipy was generating roughly $20 million in revenue and operating at a meaningful scale. But the economics were thin, the operational load was heavy, and competition was accelerating. As quick-commerce players like Blinkit and Zepto trained consumers to expect groceries in minutes rather than in the morning, Otipy’s next-day promise began to feel outdated. Behind the scenes, the company was already seeking an additional $10 million to remain afloat. That round never closed. Without fresh capital, operations quietly stopped, leaving hundreds of employees and gig workers unpaid and in the dark. Otipy’s collapse is a reminder that fundraising is not a strategy, that market shifts can invalidate a working model almost overnight, and that operationally complex businesses have little margin for error once the money runs out.