Year in review: What took down some of the biggest startups in 2025

2025 was a big year for Indian startups with blockbuster IPOs. On the flip side, the year also saw a host of them—dubbed unicorns earlier for their massive billion-dollar valuation—packing up.  

According to data sourced from Tracxn, 729 startups have shut shop in 2025 so far. The number, however, was 5X higher in 2024, with 3,903 startups shutting down. In 2023, about 2,192 startups were deadpooled. 

Across sectors, startups in enterprise applications saw the highest numbers of shutdowns, followed by retail and edtech. While Dunzo’s demise was in the making for some time, BluSmart and Hike shutting shop came as a shocker to the ecosystem.

Meanwhile, a broader funding reset has also influenced survival rates across early and growth-stage companies this year. 

Beyond the earlier thesis of growth at all costs, investors are increasingly prioritising profitability and recurring revenue visibility, prompting several startups to scale down or exit unviable categories. 

YourStory looks into the major startups that wrote their last chapter this year and what exactly went wrong. 

BluSmart: The case of the promoters, the loans and the luxury golf clubs

It took a financial scandal worth Rs 260 crore for India’s ride-hailing underdog BluSmart to close down this year.

The scandal shook its affiliate company, Gensol Engineering, and has since become a cautionary tale of related-party transactions and the lack of governance controls.

Founded in 2019 by Punit Goyal and Anmol Jaggi, BluSmart was an electric mobility pioneer, however by mid-April of 2025 BluSmart halted all new ride bookings in its largest markets, Bengaluru and Delhi-NCR.

Gensol Engineering—a listed engineering and solar consultancy firm—was closely tied to the ride-hailing startup’s success. Although it did not own any shares in BluSmart, the company leased the majority of electric vehicles for BluSmart cabs.

Across 2022 and 2023, Gensol took loans from government-backed lenders, including IREDA and PFC, worth Rs 978 crore, of which Rs 663.89 crore was meant to procure 6,400 crores EVs for BluSmart. The total expected deployment for this purchase was expected to be around Rs 830 crore.

The company, however, bought only 4,704 EVs for Rs 567.73 crore, siphoning the balance Rs 262.13 crore. Following this, the markets regulator SEBI flagged a series of ‘fraudulent’ activities at the company, including fabrication of documents, suspicious related-party transactions, and funds channelled to relatives and used by promoters for personal expenses, such as real estate purchase in DLF and a set of expensive golf clubs. 

In July, the National Company Law Tribunal admitted a petition to initiate bankruptcy proceedings against BluSmart, a month after Gensol Engineering was admitted into insolvency proceedings. 

GoodGlammGroup: A house of brands that finally ran out of rooms

The Good Glamm Group’s run as a content-to-commerce house-of-brands came to an end this year after lenders enforced their charge on individual assets, triggering a breakup of the embattled startup. 

The development followed months of financial strain, stalled fundraising, asset sales at steep discounts, and a widening cash crunch that left salaries and vendor payments pending.

The ‘Thrasio’-style company—backed by investors Warburg Pincus, Prosus Ventures, Bessemer, and Accel—pursued an aggressive acquisition strategy, often paying high valuations for digital media and consumer brands meant to drive marketing and distribution synergies. Several of these assets later struggled to scale and were eventually sold for a fraction of their purchase price.

The crisis became visible in 2024, when in March, the company raised $30 million at a flat valuation of $1.25 billion to meet working capital needs. The situation worsened in early 2025, when investors Accel, Prosus Ventures, and Bessemer resigned from the board in January. 

In February, Good Glamm sold Sirona back to its founders for about Rs 150 crore, far below the Rs 450 crore it had paid to acquire. Later that month, it let go of digital media platform ScoopWhoop to WLDD for about Rs 20 crore, compared to the Rs 100 crore acquisition cost in 2021. It also offloaded MissMalini to digital content agency Creativefuel in May. 

By July, GoodGlamm CEO Darpan Sanghvi confirmed that the restructuring and refinancing efforts had failed to secure a rescue for GoodGlamm. The remaining brands will now be sold or operated individually, effectively dismantling Sanghvi’s house of brands dream. 

He added that lenders will pursue the sale of brands individually, and if those sales are not completed or fail to resolve outstanding employee dues, Sanghvi committed to personally allocating 25% of his future post-tax earnings and equity gains to repay affected employees.

Dunzo: The poster boy of hyperlocal ran out of time and tasks

Almost a decade old, Dunzo started operations in 2014 as a WhatsApp-based pick-up and drop-off service—its name almost synonymous with the service it offered. Later, the Kabeer Biswas-led company pivoted to delivering groceries from a network of hyperlocal stores.

By 2020, the quick commerce fever had caught on, prompting the hyperlocal delivery poster boy to jump on the hype and launch Dunzo Daily—a quick commerce operation run on dark store networks. The launch didn’t go as planned, hurt by high costs, limited assortment, and a slew of operational challenges, as well as stiff competition from deep-pocketed players like Swiggy, Zepto, and Blinkit did not bode well.

All wasn’t lost yet. In 2022, it received a whopping $200 million backing from Mukesh Ambani’s Reliance Industries, onboarding the conglomerate as its largest shareholder. However, the investment added a new operational complexity, with Dunzo now offering backend support and delivery services for Reliance’s ecommerce platform, JioMart. 

Meanwhile, the cutthroat competition in quick commerce led to ballooning losses, and Dunzo lost its competitive edge over its original hyperlocal fulfilment model. 

By 2023, cracks were visible in the company—salary delays, pending vendor payments and a lack of transparency. The business suffered from operational issues in scaling its quick commerce offering, leading to multiple rounds of layoffs. 

It also shut its grocery delivery business that year, but continued operating Dunzo 4 Business—a courier service for businesses. By August last year, the company was run by a crew of 50-odd employees to keep things running, while investment dried up.  

The saga culminated when Dunzo’s app and website went dark in January earlier this year after co-founder and CEO Kabeer Biswas departed and joined Flipkart’s quick commerce venture Minutes, later exiting that as well.

Hike: When gaming wins could not outplay a policy loss

Once touted as India’s response to Facebook Messenger and WhatsApp, Hike saw its 13-year-long tenure come to an end this year. Launched by Kavin Bharti Mittal, Hike started as a youth-focused messaging app for a generation of users just getting introduced to a world of digital communication. 

It went on to build a super-app, with stickers, localised content, and a unique chat feature—allowing it to boast over 100 million users at its peak and achieve a shiny unicorn status. 

By 2021, Hike had moved from its original cause and shut down its messaging app, Sticker Chat. It instead pivoted to two virtual social apps—Vibe, a virtual hangout place, and Rush, a real-money gaming platform offering games like Ludo and Carrom. 

“RMG was never the destination. It was a means to prove unit economics and unlock the bigger vision,” this is how Kavin described the pivot later. However, the shift paid well, the platform attracted over 10 million users and generated more than $500 million in gross revenue over its four-year run. 

By 2025, its fortunes turned for the worse when the Indian government introduced the Promotion and Regulation of Online Gaming Act, 2025, which imposed a blanket ban on real-money gaming platforms. 

The move prompted top industry players to pivot, while Hike looked at exploring international markets for its gaming businesses. The SoftBank-backed startup planned to exit the country and focus on markets like the US, the UK, Canada, and Australia.

While its US business—which started earlier this year—showed promising signs, the founders eventually decided to shut down the operation after the India ban, as scaling globally would require a full reset—something that was not the best use of the company’s capital or time. 

Otipy: A farm-fresh idea that wilted under quick commerce pressure

Subscription-based grocery provider Otipy shut shop this year, following heavy competition from quick

commerce firms and a cash crunch. 

Operated under the parent company Crofarm Agriproducts, it enabled group buying through community resellers, promising fresh produce at competitive prices by streamlining logistics between farmers and urban customers.

The trouble started when the company failed to close a crucial $10 million funding round after the lead backer, Hero family office, withdrew at the last minute. Further, existing investors also turned wary of the format amid a larger downturn in grocery subscription services and kirana stores, which have been struggling since the rise of quick commerce apps. 

By May, the company was navigating salary delays, delayed vendor payments, the departure of senior leadership, and reports of a shutdown that impacted almost 300 employees and gig workers. 

Founded in 2020 by Varun Khurana, the company raised $44.2 million across four rounds from a flock of investors, like WestBridge Capital, Inflection Point Ventures, and SIG Venture Capital, among others.

Beyond the big names, many notable startups marked an exit this year, including Mypickup, Ohm Mobility, BharatAgri, Blip, Log9 Material, and Beepkart.

These shutdowns also reflect consolidation in categories such as mobility, D2C beauty, agritech, and hyperlocal delivery. With unit economics under pressure and competitive intensity rising in these verticals, several smaller players either merged into larger rivals or wound down operations after failing to secure financing.

(Disclaimer: The story has been updated with a new lead image.)