Saying goodbye is always hard—but sometimes, it’s the last and only option.
The good news for startup founders who had to shut down their business is that they're in good company. A recent report form CB Insights found that 70% of upstart tech companies fail, usually around 20 months after first raising financing. For consumer hardware startups, the stats are especially brutal, with 97% of seed or crowdfunded companies eventually dying.
Reporting on the local tech scene, we've witnessed both tremendous successes and outstanding failures this year. We had months with no companies closing doors and months with not one, not two, but three startups saying "that's it."
In 2018, we tracked down 13 local startups that ceased operations. Some closed their Boston offices following a foreign acquisition, like ride-hailing startup Fasten; some counted too much on an upcoming round of financing that didn't materialize, such as Just Add Cooking and Sheprd.
Here are the BostInno Departed from 2018:
• Baroo, a Boston-based pet care startup, shut down operations in February after expanding to five major markets and having raised $3.5 million from investors. Lindsay Hyde and Meg Reiss, Baroo’s co-founders, announced the news in a note to customers on the company’s website.
• Home-protection system startup BeON Home Inc. shut down operations and closed its Cambridge office, BBJ reported. The company decided to wind down operations in early 2018.
• Fasten, a ride-hailing company with offices in Boston and Austin, in March announced the freezing of its U.S. operations following acquisition by Vezet Group, a transportation network in Russia that provides more than 1.4 million rides a day. The company confirmed that Boston-based employees will be laid off. Fasten had approximately 35 employees in the U.S. and 110 in Russia.
• Hatch Fenway, a startup launchpad in Fenway that counted Google Ventures-backed Toast as its anchor tenant, shut down, as BostInno reported in January. But that was apparently part of the plan from when it first opened more than two years ago, according to a statement from Hatch’s developer, Samuels & Associates. A representative told BostInno that Hatch’s community space will continue to hold events for the time being.
• Not a startup or a company, but worth mentioning. Intelligent.ly, a local leadership development program popular among the Boston tech crowd, shut down in January. Co-founders Sarah Hodges and Dave Balter said they could no longer give the program the attention it deserved because of their full-time jobs. The program helped 1,950 people from more than 120 companies.
• State records show that Boston-based Jibo filed a withdrawal of its certificate of registration on Nov. 14, BBJ reported. The move means that the social robot startup founded in 2012 can no longer do business in Massachusetts. In June, Jibo confirmed layoffs, which the company qualified as a “significant” reduction.
• Just Add Cooking, a five-year-old meal kit service sourcing ingredients from New England markets, ceased operations as of early November. On top of a funding round that wasn't there, the startup discovered that some customers didn't really want to "add cooking" to their busy lives. Here's what went wrong.
• In early February 2018, CEO Dave Balter confirmed that his startup Mylestone shut down in December 2017. Balter stepped aside from Mylestone to focus more on his cryptocurrency investing service, Flipside Crypto.
• In an email to BostInno, Chris Buck, co-founder of Nomsly, confirmed they shut down the company in July this year. Born as a food delivery service of healthy lunches for children, the startup changed its mission and started providing companies with snacks for employees.
• Rethink Robotics, a Boston-based maker of collaborative robots for the industrial manufacturing industry, shut down in October. The startup introduced the concept of "collaborative robots," human-friendly machines designed to automate dangerous jobs in the manufacturing industry. "We did not achieve the commercial success we had expected," Jim Lawton, the company’s COO, wrote to BostInno. "A planned acquisition of the company fell through at the last moment."
• Sheprd, a Newton-based transportation startup meant to be an ‘Uber for kids,’ abruptly shut down in October after being told to halt a portion of its operations by the Massachusetts Department of Public Utilities Transportation Network Division. The news caused some investors to back out of what had been planned as a $1.2 million additional round of funding the company “desperately needed,” according to BBJ.
• Transatomic Power Systems, an eleven-year-old nuclear reactor startup started by engineers Dr. Leslie Dewan and Mark Massie while they were still graduate students at MIT, confirmed it was shutting down in October. The company’s idea encountered complications during the build-out stage.
• San Jose, Calif.-based data storage company Western Digital closed a 114-worker facility in Marlborough, Mass. A spokesperson told Worcester Business Journal in August that the company is also consolidating closing operations in Salt Lake City and San Diego as well.
If you think there’s a company missing from this list, email Lucy at lmaffei@americaninno.com
