scorecardIn memoriam: 7 once-hot startups that shuttered their doors in 2015
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In memoriam: 7 once-hot startups that shuttered their doors in 2015

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In memoriam: 7 once-hot startups that shuttered their doors in 2015

Homejoy

Homejoy

What was it: Homejoy offered on-demand homecleaning services. One of the first companies into the so-called "gig economy," Homejoy was a favorite of the press because it offered low-cost cleaning and was using software to automate the process of boooking so it would be more efficient.

Why it closed: In an interview with Re/Code, Homejoy CEO Adora Cheung blamed the worker misclassification lawsuits the company faced. It had failed to raise enough funding to grow the company as big as they wanted, she said, so it decided to shutter its doors in July.

However, Christina Farr on Backchannel pointed to poor customer retention, poor worker retention, and mounting losses as its downfall. Like Groupon, the company had struggled to entice repeat customers when it offered a cheap initial cleaning then later raised the price.

Money raised: $40 million from Y Combinator, PayPal founder Max Levchin, First Round Capital, Redpoint Ventures, and Google Ventures.

Zirtual

Zirtual

What was it: Zirtual provided on-demand virtual assistants. Instead of taking the "gig economy" model and using only contract workers, Zirtual differentiated itself by having full-time employees. Each assistant would work multiple accounts, depending on the workload, making it cheaper for corporate clients.

Why it closed: In August, Zirtual laid off its 400 employees in the middle of the night via an e-mail, after a last minute hail-Mary round of funding failed to come through. The CEO Maren Kate Donovan later said the "numbers were f*****" and the company had over-staffed without having matching demand.

Looking back, she told Fortune she should have hired a full-time CFO and had a proper board for the company. Zirtual's assets were acquired in October by Fundable.

Money raised: $5.5 million, including from Jason Calacanis, Mayfield Fund, Tony Hsieh, and the VegasTechFund

Secret

Secret

What was it: Secret was an app that allowed for anonymous posting of snippets of text, often rumors or confessions, that were shared with people. It was huge at SXSW and rose along with other anonymous apps like Whisper and Yik Yak. However, like many anonymous apps, Secret had problems with cyberbullying and eventually redesigned itself to look like its competitor Yik Yak.

Why it closed: In his farewell blog post, CEO David Byttow wrote that Secret "does not represent the vision I had when starting the company". He continued: "I believe in honest, open communication and creative expression, and anonymity is a great device to achieve it. But it’s also the ultimate double-edged sword, which must be wielded with great respect and care."

Money raised: $35 million. Byttow noted that most of the money would be returned to investors.

Grooveshark

Grooveshark

What was it: The music streaming service launched in 2006 as a site where users could upload their music for others to listen to it. It immediately ran into legal problems over concerns about copyright violations, and over the years, tried to sign contracts with one of the largest royalty companies. That company said it never really received information from the company on what was being streamed, so it (and pretty much every other major music company) started suing them.

Why it closed: In its goodbye note, published as part of its settlement conference, the streaming site acknowledged that "despite the best of intentions" it made mistakes by failing to secure licenses from right holders for the vast amount of music on the service.

Money raised: $6 million

Rdio

Rdio

What was it: Launched by the guys who founded Skype and Kazaa, Rdio was another music streaming site launched in 2010 to compete with Spotify and (now) Apple Music. Unlike Grooveshark, Rdio was based on a subscription streaming model, but it puttered along in second place behind Spotify for much of its existence.

Why it closed: In November, Variety's Janko Roettgers reported that Pandora was acquiring the "technology and intellectual property" from Rdio for $75 million, contingent upon its bankruptcy proceedings. The company had struggled to compete against Spotify since 2011, when the foreign music service entered the US market and offered a better free version. People got hooked to Spotify and then paid up for premium, but Rdio failed to gain the subscriptions or to reinvent itself.

Money raised: $125.7 million

Leap Transit

Leap Transit

What was it: Leap Transit was supposed to offer a luxury commuter bus on bus routes that benefited the commuter and weren't serviced by the city. The critics in San Francisco claimed it was just another way for rich techies to get to work — the city already has an extensive network of commuter shuttles. A city supervisor reportedly called it a "crock of s---" and criticized it for creating a two-tier transit system in the city when it first launched in 2013.

Leap's proponents, though, saw it as a problem-solver and a way to get more cars off the street. The high-end line of buses were equipped with Wi-Fi, coffee, snacks, power outlets, and leather seats. It unabashedly catered to those who could afford its $6 ticket each way.

Why it closed: The startup suspended its service in May after a disagreement with regulators and the receipt of a cease-and-desist letter. The temporary hiatus became a permanent one months later after its buses were put up for auction. In July, the company filed for bankruptcy after generating only $20,748 in gross income for the year.

Money raised: $2.5 million from Andreessen Horowitz, Index Ventures, Slow Ventures, and Salesforce CEO Marc Benioff

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