Even well-established private companies are constantly at risk of failure, as evidenced by some startups that stopped operations this year. PitchBook collected data on the 25 most expensive startups that failed in 2018; three of these companies have existed for more than 20 years and were still forced to close.
We present a list of 25 most expensive startups that failed in 2018.
25. SDCmaterials - automotive nanotechnologies
Year of foundation: 2004
Maximum estimate: $48 million
Amount raised: $26 million
The main activity of SDCmaterials was the creation of nanomaterials for automotive catalysts in order to minimize harmful emissions into the environment by the automotive industry. SDC developed and patented processes for the manufacture and integration of catalytic materials, which provided a step-by-step improvement in the performance of the underlying platinum group precious metals, which are key for emission control.
The company was invested by such giants of the auto industry as GM, BASF, Volvo.
24. Senzari - Music Data Processing
Year of foundation: 2010
Maximum estimate: $52 million
Amount raised: $13 million
Senzari developed data processing solutions for the media industry and entertainment. Their product, MusicGraph, was a platform for listening to music and watching films, which analyzed user preferences and gave real-time recommendations.
MusicGraph gave access to various data on artists, albums and tracks; allowed you to create applications using its API; and monitor recent social trends and popularity in the musical universe. MusicGraph API is also used to search for various musical facts and connections.
23. Industrial Origami - manufacturer of industrial materials
Year of foundation: 2003
Maximum estimate: $58 million
Amount raised: $41 million
Industrial Origami has patented a manufacturing process that reduces energy consumption and material consumption. By perforating metal sheets and certain types of plastics, Industrial Origami was able to fold them into inexpensive, ultra-durable structures.
22. Claritas Genomics - Pediatric Genetic Testing
Year of foundation: 2013
Maximum estimate: $60 million
Amount raised: $39 million
Developer of genetic tests for pediatrics and hereditary diseases. The company closed most likely due to a mismatch of goals among investors of the laboratory, which many considered successful.
21. Apprenda - Cloud Software for Developers
Year of foundation: 2007
Maximum estimate: $90 million
Amount raised: $56 million
Apprenda created the Apprenda Cloud Platform. This is a comprehensive platform with support for Kubernetes, which other companies used to develop new software and connect it to existing internal programs. Its clients included banks such as JPMorgan Chase, and medical companies such as AmerisourceBergen, which have large IT and computer programming departments.
Since 2013, the venture capital company Safeguard Sciences has invested $22.1 million in Apprenda and owned a 29 percent stake in the company. Asked what caused the company's shutdown, Safeguard's CEO and president said the firm was "disappointed... that ultimately we did not succeed with Apprenda. "
20. Innovari - Interactive Energy Platform for Utilities
Year of foundation: 2011
Maximum estimate: $94 million
Amount raised: $12 million
Innovari created a technology platform that was supposed to help utilities manage and supply reliable and affordable energy in real time. The company's interactive energy platform (IEP) used artificial intelligence, big data analytics, proprietary optimization procedures and insider knowledge in the utility industry to provide capacity and solve demand variables.
The solution operated as a virtual power plant, connecting additional capacity for utilities when necessary, in bad weather, storms, etc.
19. DataTorrent - streaming platform
Year of foundation: 2012
Maximum estimate: $96 million
Amount raised: $24 million
The startup advanced the RTS platform (stream data transmission in real time) which included the platform under the name Apoxi. Apoxi provided, except stream transfer, including function of storage and reproduction which allowed users to carry out last analysis of events.
According to the president of the company in closing time of the company they couldn't monetize the platform, the market is more inclined to free products with support.
18. Rennovia - biochemical production
Year of foundation: 2009
Maximum estimate: $99 million
Amount raised: $69 million
Rennovia Inc. is a specialized chemical company specializing in the production of chemicals from renewable raw materials.
The company ceased operations after it failed to attract sufficient funding from investors.
17. Navy - Heads-Up Vehicle Displays
Year of foundation: 2012
Maximum estimate: $100 million
Amount raised: $80 million
The startup was started on the crowdfunding website in 2014, having earned more than one million dollars for the first week. However since then the situation strongly changed.
The company became known for the projector to Navdy which displays information on a windshield by means of the translucent display (Head-Up Display (HUD)) where it was possible to monitor navigation, to read messages or to look through mail.
Instead of using Google Maps or other navigation system, Navdy organized own navigation service. Such strategy strongly brought owners of devices as the company is liquidated, now it is impossible to prolong a subscription to service. Now there is no way to change Navdy for use of other free application therefore all projectors are blocked and become useless.
16. EZhome - Subscription lawn care services
Year of foundation: 2014
Maximum estimate: $102 million
Amount raised: $20 million
The company provided maintenance and home improvement services in the United States and abroad. Offered home and yard care services, including lawn care services such as lawn haircut, edge trimming, lawn trimming, and fence installation; cleaning services such as cleaning and weeding. In addition, customers could manage weekly tasks for gardeners using a mobile application.
15. Winx - sleep therapy systems
Year of foundation: 2007
Maximum estimate: $115 million
Amount raised: $77 million
The company developed the Winx System device, which is a device for the treatment of obstructive sleep apnea, oral pressotherapy (OPT) is used for this. The system is equipped with a soft and flexible mouthpiece, a thin tube and a quiet, compact console. The flexible mouthpiece should be in the mouth during sleep. It is attached to a thin tube, which is connected to a compact cantilever, which allows you to breathe naturally from any position of the body.
14. Alphabet Energy —thermoelectric generators
Year of foundation: 2009
Maximum estimate: $118 million
Amount raised: $78 million
The company was developing a system for recovering thermal energy and turning it into electricity.
In 2014, Alphabet Energy introduced the world's first industrial thermoelectric generator E1. E1 receives heat from exhaust gases from large industrial engines and turns it into electricity. As a result, the engine needs less fuel quantity to provide the same power. E1 was optimized for engines up to 1400 kW and operated on any engine or exhaust source.
The company is also known for selling the PowerModule product, which was able to turn the surplus generated by server equipment inside the data center of thermal energy into electricity. For this, the so-called thermoelectric effect was used.
The PowerModule device was the solid-state electric generator with liquid cooling which transformed heat to electricity, using the proprietary thermoelectric materials PowerBlocks. It has been claimed that with their help, the PowerModule directly converted the heat of heated air and other gases with a temperature in the range from 350 ° C to 600 ° C into direct electric current, providing power up to 850 W.
13. Paieon - medical imaging technology
Year of foundation: 2000
Maximum estimate: $136 million
Amount raised: $34 million
Paieon Inc., a medical imaging company, provided image analysis for cardiovascular intervention procedures. The following services CardiOp-B, a three-dimensional (3D) system for the reconstruction and analysis of the cardiovascular system were offered. IC-PRO is an imaging workstation that provides assistance at various stages of the catheterization procedure, such as diagnosis, procedure planning, treatment, post-deployment analysis, and reporting and archiving.
12. Candescent Health - radiological software
Year of foundation: 2009
Maximum estimate: $145 million
Amount raised: $94 million
The company is a developer of cloud software for radiology, which increased accuracy and speed, reducing the cost of diagnostics.
11. PRIMARY DATA - Software Automation Platform
Year of foundation: 2013
Maximum estimate: $150 million
Amount raised: $89 million
Primary Data developed software to analyze and automate enterprise data management in the local IT infrastructure and in the cloud. Its platform DataSphere combined metadata management and machine learning to move the right data to the right place at the right time in the global namespace, automatically and without applications
10. Fallbrook Technologies - automatic transmission technology for bicycles
Year of foundation: 1998
Maximum estimate: $169 million
Amount raised: $171 million
The company is known for the invention of a NuVinci - step planetary sleeve with balls for bicycles based on a stepless transmission (CVT). In December 2006, the first bicycle with NuVinci was introduced in the Netherlands and the USA.
In the Nuvinci CVP sleeve, gears are not used - balls are used instead to change the gear ratio. The Nuvinci sleeve belongs to the class of variators. The abbreviation of the word variator in English sounds like CVP or CVT, which is reflected in the name of the sleeve.
NuVinci CVP technology has also been introduced for wind turbines, electric vehicles, etc.
In March of this year, Fallbrook Technologies filed for bankruptcy. As a result of bankruptcy proceedings, the company was divided into 2 divisions. Bicycle division under the Enviolo brand, will continue the further development of NuVinci technology. And the licensing department, which provides technology to NuVinci "industry leaders" such as Allison Transmission, Dana Limited, TEAM Industries and Conti Temic microelectronics.
9. ReVision Optics - surgical implants for visual improvement
Year of foundation: 1996
Maximum estimate: $183 million
Amount raised: $175 million
ReVision Optics has developed Raindrop near vision inlay to correct presbyopia. The Food and Drug Administration approved corneal inlaid in June 2016.
In April 2017, ReVision announced that in the seven months since launch, 1,000 Raindrop operations were completed. Although many patients and surgeons were satisfied with the work of the inlay, for ReVision this business turned out to be difficult, the board of directors and investors decided to close it. Raindrop inlay was discontinued in January 2018.
8. Medical Simulation - Simulation Products for Medical Training
Year of foundation: 1998
Maximum estimate: $194 million
Amount raised: $55 million
Medical Simulation Corporation offers simulation products and training programs supported by physicians, including Compass All Terrain, a training and sales tool that provides high portable modeling; customized applications for sales professionals, physicians and patients; Simantha is an endascular modeling system that helps train healthcare professionals; and Mobile Simulation Lab - a platform that facilitates clinical support for hospitals in the prevention and early detection of various disease conditions.
7. Airware - unmanned analytics
Year of foundation: 2011
Maximum estimate: $59 million
Amount raised: $104 million
Airware offered in-flight drone management and monitoring software and cloud services to store and manage drone-collected information for industries such as mining, insurance, and construction. Programs checked the equipment for damage, used to collect and analyze aerial photographs. This allowed companies not to use expensive helicopters or dangerous drilling rigs with people on suspension to conduct inspections and evaluate progress.
The startup ran out of money after trying to manufacture its own equipment, which could not compete with large drone manufacturers, such as the Chinese DJI. At some point, the company employed 140 employees, and all of them are now unemployed.
6. ItsOn - cloud platform for intelligent mobile services
Year of foundation: 2008
Maximum estimate: $243 million
Amount raised: $41 million
ItsOn was the first company to develop and commercialize the Network Function Virtualization Platform (NFV), which replaced the traditional hardware control panel 3GPP. Cloud-based software ItsOn enabled users to purchase mobile operator services in real time directly from devices.
ItsOn has also developed a cloud-based platform to improve mobile network performance. The company's real-time telecommunications platform controlled voice, text and data services, optimizing traffic control among subscribers.
According to former employees, poor management led to the closure of the company.
5. Shyp - Demand Delivery Platform
Year of foundation: 2013
Maximum estimate: $275 million
Amount raised: $62 million
Shyp started in 2014 and was designed to simplify the sending of parcels to US residents. The company collected, packaged and shipped goods through USPS and other large carriers.
Following the explosive growth, a series of failures followed. The initial business model of $5 per delivery for fiz persons, allowed to maximize the geography of deliveries. According to geography in the United States, they were compared with UBER, but a series of losses forced the company to reorient to the wholesale market and leave only delivery to San Francisco. These measures no longer helped save the company, explosive growth errors led to the closure of the company.
4. Rethink Robotics - Robots for Manufacturing
Year of foundation: 2008
Maximum estimate: $291 million
Amount raised: $150 million
Rethink Robotics was a robotics company offering robotic hands for various types of production. Robots were engaged in loading and unloading, packaging, testing, checking, as well as processing metal and exchanging information with other IoT devices.
Rethink robotics closed on October 3, 2018, and assets and intellectual property were acquired by the HAHN Group on October 25, 2018.
3. Videology- software for body and video advertising
Year of foundation: 2007
Maximum estimate: $311 million
Amount raised: $233 million
Videology, founded by former Advertising.com owner Scott Ferber, is developing programs that help advertisers target video ads to specific demographic groups, websites, and smartphone apps.
Videology also collects information about online consumers to help advertisers benefit greatly from television advertising.
Last year, the company actively sought a buyer, in May of this year filed for bankruptcy and protection from creditors. The company reported a debt of $100 to $500 million. Amobee, a California-based record sales organization owned by Singapore Telecommunications Ltd. or Singtel, became a major participant in the purchase of Videology assets, and paid $20 million for the company's assets.
2. Lytro - cameras with full spectrum light field
Year of foundation: 2006
Maximum estimate: $360 million
Amount raised: $202 million
The company became known for Lytro Light Field Camera. This is a digital camera, the technology of which is based on the theory of the light field, according to which the camera sensor records not only information about the color and intensity of light, but also vector information about the direction of light at each point of the image, thereby obtaining more complete information about the shot plot than a conventional camera.
A key feature of the camera was the ability to adjust the focus of the image after the picture has already been taken.
Despite the fact that Lytro acquired the Limitless VR animation company last year for $60 million, in March 2018, Google absorbed Lytro for $25-40 million. The team will be distributed across multiple divisions and will not continue Lytro's previous work. Google acquired Lytro assets, but without direct plans to integrate them into existing projects.ё
1. Theranos - Blood Test Technology
Year of foundation: 2003
Maximum estimate: $9 billion
Amount raised: $910 million
In 2015, Forbes magazine declared Elizabeth Holmes the youngest billionaire woman to independently earn a fortune, relying on Theranos market value data, which at that time was estimated at $9 billion. Holmes owned half the shares of the startup.
Theranos claimed that thanks to the innovative method developed by its experts, only a few drops of blood are enough for accurate and inexpensive analysis.
However, a few months after that, accusations of fraud fell on the corporation: it turned out that the portable blood test device offered by Theranos had too many errors and the company simultaneously conducted tests using traditional methods to compensate for the errors.
On June 15, 2018, Theranos founder and former operations director were accused of fraud. According to the prosecution, Holmes and Balwani cited deliberately false facts in presentations for investors and press releases, as well as when demonstrating company products. Theranos thus tried to convince investors of the revolutionary nature of its key product - a portable blood analyzer - due to its ability to conduct the entire range of blood drop tests from a finger.
Results
In the past year, the largest resonance was caused by the closure of Theranos, a medical technology company that raised almost $1 billion. Many companies do not advertise real reasons for the closure. It remains only to guess what went wrong in a particular company. The main result can only be considered that millions of invested dollars from venture capitalists are not the guarantor of the life of the startup.