Startups in 2025: Fewer closures but big names stumble — BluSmart, Dunzo & others exit

Despite a difficult funding climate, this year emerged as a comparatively stable year for India’s startup ecosystem, with shutdowns falling sharply from last year’s highs. Around 730 startups ended operations in 2025, a major decline from the 3,903 closures recorded in 2024. According to the department for the promotion of industry and internal trade (DPIIT), India, at present, has over 2.06 lakh registered startups. Though the number of closures was lower, it included several prominent names, spanning electric mobility, hyperlocal delivery, consumer internet and ecommerce. Here are some of the startups that said good byes in 2025:BluSmartElectric ride-hailing startup BluSmart was among the most notable exits. Launched in 2019, the company offered fully electric vehicles, assured rides and salaried drivers. The firm had gained roughly 9% market share in Delhi. Soon the ride company expanded its fleet to more than 8,000 electric vehicles across the country and raised around $168 million from investors, including BP Ventures and celebrity backers. However, according to ET, operations were suspended in April after Sebi detected large-scale financial misconduct at Gensol Engineering, a listed solar EPC firm promoted by BluSmart’s founders, the Jaggi brothers. While Gensol did not hold equity in BluSmart, it owned a substantial share of the startup’s EV fleet, resulting in close financial ties. Sebi said the promoters had siphoned off at least Rs. 262 crore from EV loans, forged lender documents, manipulated share prices, misled investors through false disclosures, and diverted funds towards stock trading and personal luxury purchases. Following the revelations, BluSmart faced internal disruptions, including delayed salary payments, declining ride volumes and leadership exits, before suspending services and transferring its fleet to Uber.Dunzo Hyperlocal delivery platform Dunzo also shut down after years of financial strain. Once a pioneer in the category, the startup drew widespread attention in 2022 when it secured $240 million from Reliance Retail. However, the platform struggled to compete with fast-scaling quick-commerce rivals such as Zepto, Swiggy Instamart and BlinkIt. The company failed to raise additional capital to support operations and expansion, while expenses, including those linked to its IPL sponsorship, added to financial stress. By September, Dunzo’s sole remaining co-founder, Kabeer Biswas, exited to build Flipkart’s quick-commerce arm Minutes, bringing the company’s prolonged downturn to a close.Hike Messaging app Hike, founded in 2012 by Kavin Mittal, was once viewed as India’s answer to global platforms such as WhatsApp and Telegram. Backed by investors including Tiger Global, SoftBank and Tencent, the company raised over $250 million within four years, with Mittal asserting, ‘we’re here to stay.’ At its peak, Hike had more than 100 million registered users and handled over 40 billion messages each month. However, the platform began winding down in 2021, when it shut its core messaging service, citing the challenge of competing with global network effects, ET reported. Hike later pivoted to Rush, a real-money gaming platform, following earlier attempts to reposition its messaging product, including its 2019 rebrand as Hike Sticker Chat. The company’s remaining operations ended in September after the Promotion and Regulation of Online Gaming Act imposed a blanket ban on real-money gaming apps.Good Glamm Group The Good Glamm Group, once valued close to unicorn status, also scaled back significantly. With a portfolio of over a dozen brands, the company aimed to replicate the roll-up ecommerce model by acquiring and integrating digital-first consumer brands. Over time, weaknesses in this approach became apparent. Heavy acquisition-related debt, slowing growth and limited access to fresh funding weighed on the business. Several acquired brands, including Sirona and The Mom’s Co, were wound down as anticipated efficiencies from shared marketing and supply chains failed to materialise. The group’s troubles reflected the broader challenges facing roll-up ecommerce models in India.Otipy Grocery delivery startup Otipy, launched during the pandemic by former Blinkit CTO Varun Khurana, also shut operations this year. The NCR-based B2B2C firm differentiated itself through a subscription-led, farm-to-fork model, connecting consumers with farmers via community resellers handling last-mile delivery in Mumbai and Delhi-NCR. The startup raised $44.2 million during its early years but struggled as ultra-fast delivery became the industry standard. Financial pressures mounted, leading to delayed salary payments and pending vendor dues. In May, the Crofarm India subsidiary ceased operations, affecting around 300 employees and delivery partners. Industry-wide data reflects a broader easing in shutdowns. Tracxn data cited by ET shows that startup closures fell nearly 80% this year, compared with the peak period of 2021–22, when more than 11,000 startups wound down. Over the past five years, enterprise applications have accounted for the largest share of closures, followed by retail and edtech, with healthtech, entertainment and media also seeing significant exits. Maharashtra and Karnataka have recorded the highest number of shutdowns among states during this period.