Spectacular US Startup Failures | Generated by AI
Question: What are spectacular failures in USA startups in the last 15 years, like Cruise etc.?
Answer:
Several high-profile U.S. startups have experienced dramatic failures over the past 15 years (2010–2025), often involving massive funding, immense hype, and rapid collapses due to fraud, operational issues, market misfits, or external factors. These “spectacular” cases highlight the risks in venture-backed innovation. Here are some notable examples:
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Theranos (2015–2018 collapse): Founded by Elizabeth Holmes, this blood-testing startup raised over $700 million and reached a $9 billion valuation by promising revolutionary finger-prick tests. It was revealed as fraud—the technology didn’t work, and tests were inaccurate or faked using commercial machines. Holmes and president Sunny Balwani were convicted of fraud.
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Juicero (2017 shutdown): This Silicon Valley startup raised $120 million for a $400 (originally $700) Wi-Fi-connected juicer that pressed proprietary fruit/vegetable packets. It became a symbol of excess when users discovered packets could be squeezed by hand just as effectively. The company shut down after 16 months.
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WeWork (2019 IPO failure, 2023 bankruptcy): The co-working space provider, once valued at $47 billion, saw its IPO collapse due to unsustainable growth, massive losses, and governance issues under founder Adam Neumann. It filed for Chapter 11 bankruptcy in 2023, eliminating $4 billion in debt but emerging much smaller.
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Quibi (2020 shutdown): Backed by $1.75 billion and Hollywood stars, this mobile-only short-form video streaming service launched amid the pandemic. Poor timing (people at home, not “on the go”), competition from free platforms like TikTok/YouTube, and lack of breakout content led to shutdown after just six months.
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Katerra (2021 bankruptcy): SoftBank-backed construction tech startup raised over $2 billion to disrupt building with modular prefabrication. Overexpansion, mismanagement, and inability to scale profitably amid pandemic costs led to Chapter 11 filing and shutdown of U.S. operations.
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FTX (2022 collapse): The cryptocurrency exchange, valued at $32 billion, imploded due to fraud and misuse of customer funds by founder Sam Bankman-Fried (an $8 billion hole exposed). It filed for bankruptcy, triggering crypto market turmoil; Bankman-Fried was convicted.
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Cruise (2023–2024 setbacks, 2024 robotaxi abandonment): GM’s autonomous vehicle unit (acquired/invested over $10 billion) aimed for driverless robotaxis. A 2023 pedestrian-dragging incident in San Francisco led to grounded operations, permit revocations, layoffs, and regulatory scrutiny. In 2024, GM halted robotaxi development, absorbing Cruise into personal vehicle tech.
These failures often stem from overhyping unproven tech, poor market fit, leadership issues, or fraud, despite billions in funding from top VCs.
References:
- https://www.cbinsights.com/research/biggest-startup-failures/
- https://www.failory.com/failures
- https://en.wikipedia.org/wiki/Theranos
- https://en.wikipedia.org/wiki/WeWork
- https://en.wikipedia.org/wiki/Quibi
- https://en.wikipedia.org/wiki/Bankruptcy_of_FTX
- https://en.wikipedia.org/wiki/Cruise_(autonomous_vehicle)
- https://www.theguardian.com/technology/2017/sep/01/juicero-silicon-valley-shutting-down
- https://techcrunch.com/2021/06/01/softbank-backed-construction-giant-katerra-said-to-be-shutting-down-after-raising-billions/
- https://www.cnbc.com/2024/12/15/end-of-gm-cruise-driverless-robotaxi.html