According to multiple sources, more startups were closed in 2024 than 2024, and given the insane companies that were funded on a crazy day in 2020 and 2021, it was actually it. Is not surprising.
We seem to be almost over, and another brutal startup may shut down in 2025.
TechCrunch collected data from several sources and found a similar tendency. According to Carta, the 966 startup was closed in 2024 compared to 769 in 2023. This is an increase of 25.6 %. One note on methodology: These numbers are Carta customers for bankruptcy or dissolution, and for companies that have left Carta. Peter Walker, Carta's insight, presumed that there is a high possibility that there is another shutdown that is not explained through Carta.
“Yes, shutdowns increased from 2023 to 2024 at all stages, but in 2020 and 2021 (in a larger round), more and more companies were funding. Therefore He is expected to increase the closure depending on the essence. ”
At the same time, Walker acknowledged that there were more shutdowns, or to accurately estimate it.
“We must have missed a good lump,” he told TechCrunch. “There are many companies that leave Carta without telling us why they left.”
Meanwhile, Angellist discovered a 364 startup wide down in 2024, compared to 233 in 2024 in 2024. This is a 56.2 % jump. However, Angellist CEO's AVLOK KOHLI has a fairly optimistic view, but Winddowns states that “it is still very low compared to the number of companies that have been funded for both years.”
Reof. FYI discovered a inconsistent tendency: In 2023, 109 in 2023 and 85 high -tech companies were closed compared to 58 in 2022. Of these 2024 high -tech closures, 81 % were startups, the rest was a public company or a previously acquired company, and later closed by parent organization.
VCS did not choose “winner”
Many companies have been funded for their business in 2020 and 2021 with a fierce evaluation with a fierce evaluation, so in up to three years later, the number of increases will be more cash to provide funds to their business. It is logical that I couldn't collect it. If investment is too high, the risk will increase so that investors do not want more investment unless investors are growing very well.
“The practical hypothesis is that VCs as an asset class did not make it better to choose the winner in 2021. In fact, all were very crazy, so the hit rate could worsen that year. Walker said. “And if we have a flat rate of excellent companies and we are funding more companies, we need to expect more closing a few years later, and that's it. It is a place in 2024.
Dori YONA, a CEO and co -founder of SimpleClosure, which is a startup aimed at automating the shutdown process, has seen many startups receiving seed funds in 2021 “probably prepared”. I'm thinking.
Jonah explained that they might have set them for failure just by getting the money.
“The rapid capital injection has sometimes promoted high -fire rates and all costs, and has led to sustainability issues as the market changes after the pandemic,” he said. Therefore, “In recent years, many famous companies have stopped operating despite the large amount of money and early promises.”
The main propulsion behind the shutdown is clear.
“Lack of cash is usually a cause of the proximity,” Walker says. “But the fundamental reason is a combination of overestimation that leads to lack of compatibility in the product market, lack of cashflow's positive abilities, and unable to continue donation.”
Looking ahead, Walker is hoping to continue to close more in the first half of 2025, and then gradually decreases.
The forecast is mainly based on a time -lag estimate from the peak of funding, and he estimates that it is the first quarter of 2022 in most stages. Therefore, by the first quarter of 2025, “Most companies would have had a new path or have made this difficult choice.”
Angellist Kohli agrees. “They aren't all washed away,” he said, about the startups that were funded at an unreasonably high evaluation during those great days. “Not even nearby.”
Already this year, the Pandion, a startup based in Washington, has been closed. The company was established in pandemics and has raised about $ 125 million in the past five years. And in December, Proptech Easyknock suddenly shut down. Easyknock is a startup that claims himself as a high -tech house sale leaseback provider, and was established in 2016 and raised $ 455 million from supporters.
Startups dying in the industry and stages
The types of companies influenced last year were in various industries.
Carta's data indicates that enterprise SaaS companies have gained the biggest hit. This accounts for 32 % of closed. Consumers continued at 11 %. 9 % health technology. 8 % fintech, 7 % biotechnology.
“These percentage is very consistent with the first funding for these sector,” Walker said. “And what is essentially saying this is that all startup sector is closed and has not demonstrated a very good performance. And 2024.”
Layoffs.fyi's much smaller subset has found that finance is the second and third food (12 %) and healthcare (11 %) of the closed closed.
On the stage, it was found that SimpleClosure data was 74 % of all closed after 2023, before or seeds, and multiple (41 %) in the seed stage.
Most startups tend to close when the financial resources are completely dry, but some people see them on the wall as soon as they return to investors.
“Most of the failed startups (60 %) do not have enough capital to return to investors,” said Jonah. “The founder who is planning to return a refund has an average of $ 630,000 investments. Average about 10 % of the capital is procured.”
Jonah also predicts that the startup closing rate will not slow down immediately.
“The graveyard of high -toned zombies and startups will continue to make headlines,” said Jonah. “Despite the new investment harvest, many companies are gathering even if they do not have enough profits.”