The startup "mass extinction event" has been well underway.
After abundant venture capital funding in 2021 and parts of 2022, startups have experienced a cash crunch for the past 18 months due to a significant funding pullback. Funding remains more difficult to come by, resulting in startups doing multiple rounds of layoffs to cut back expenses.
But for many startups, budget cuts haven't been enough: more than 3,200 startups, which collectively raised $27 billion, closed up shop this year, The New York Times reported, citing data from PitchBook.
Startups could once raise funding rounds while "largely ignoring the underlying economics of their businesses," Sri Chandrasekar, a managing partner at Point72 Ventures, previously told Business Insider. But they're now under more pressure from investors to improve their unit economics.
It's already too late for many companies, and they have begun to fail. VCs predict that this will continue in 2024.
But the shutdown numbers alone don't paint the overall bleak picture of the startup industry. Some were forced to sell at a major discount or are actively seeking a buyer, while others filed for bankruptcy.
The pace of startup shutdowns is so fast that even other startups are trying to capitalize. Some are finding success by offering wind-down services to their industry peers, like SimpleClosure, an AI startup that helps other companies shut down correctly.
Here are 10 of the biggest startups — based on their valuation or how much they fundraised — that shut down in 2023. Our list is organized chronologically, beginning with the one that shut down most recently.