Zombie Startups:
Koo, the Indian social media platform that aimed to rival Twitter has shut down.This has brought the topic of zombie startups into limelight once again.
- Tech startups once blessed with huge fundings are transforming into “zombies”.
- Startups that raised a huge amount of money over the boom cycle but aren’t producing nearly enough revenue to justify the valuation are called ‘Zombie startups’.
- Zombie startups, also known as “walking dead” companies, are businesses that continue to operate despite being unprofitable or stagnant. A company might turn into a zombie because of multiple reasons:
- Zombie startups may have received initial funding but failed to secure follow-up investments.
- As a result, they struggle to grow and remain in a state of limbo.
- Some startups have flawed business models that prevent them from achieving sustainable growth.
- They may not address market needs or fail to adapt to changing conditions.
- Poor leadership, mismanagement, or lack of strategic vision can turn a promising startup into a zombie.
- Without effective decision-making, they drift without purpose.
- Economic downturns or industry-specific challenges can contribute to a startup’s zombification.
- When external factors hinder growth, companies may become zombies.
