10 fintechs that failed (and why)

By   |   Verified by Nikita Sheth   |   Updated 1st April 2021

Failed fintechs
  • Fintech startups are disrupting traditional banking in markets across the world.
  • These businesses operate in a competitive market, requiring financial backers with deep pockets.
  • Many of them fail, often suddenly and without warning. These are some of the best examples.

Fintech is a challenging industry to crack. Most companies entering the market find the barriers-to-entry are low, but competition is fierce.

As tech integrates itself further into our lives, more fintech companies are popping up, offering innovative solutions that add convenience and value to our daily lives. Unfortunately, many of them end up failing.

Reasons why fintechs fail?

Before we list our ten fintech failures, let's unpack some common reasons why these ventures end up closing their doors.


A lack of funding or underfunding is the top reason for failure cited by most companies. Many fintech companies find themselves already in hot water by the time they realize they need additional funding rounds.

Management might not realize there's a lag to procuring funding, which places pressure on cash flow and dramatically shortens their runway. In the bridge between securing additional rounds of funding, many startups end up running out of money, forcing the company's closure.

Choosing the wrong investment partners

Fintechs typically receive funding from venture capital (VC) partners. However, many companies are so grateful to find an investment partner that they fail to vet the investment and management teams.

VCs typically want a controlling stake in the firm and may make demands that many fintechs may struggle to meet. As a result, funding is withdrawn and the fintech is closed.

Compliance problems

Fintechs must comply with all regulations, financial laws, and operational requirements. Unfortunately, many companies hire compliance officers very late in the startup process. As a result, they end up in violation of compliance, resulting in regulatory authorities shutting them down.

Competitive marketplace

Although the fintech industry is easy to enter, it can be challenging to establish a foothold. Many companies end up competing with innovations offered by larger, more established firms. As an example, Apple Pay, Google Pay, and AliPay make successful entry into the payments space extremely challenging.

Economic downturn

Most fintechs are reliant on large amounts of external capital to secure the runway they need to break through in the market. During economic downturns, however, investors may pull their funding. Given difficult market conditions, the fintech company may be unable to secure additional capital in a timely manner, leaving them without any runway to continue operations.

Failed fintechs


  • Founder: Eric Wilson
  • Founded: 2017
  • Headquarters: Sydney, Australia
  • Total funding disclosed: $100.6MM

What did Xinja do?

Xinja was a "neobank" for consumers, offering money transfers, deposit accounts, bill payments, debit cards, and more. The company offered an app available on iOS & Android devices. Xinja also launched the Stash platform for alternative consumer savings accounts.

Why did Xinja fail?

“After a year marked by Covid-19 and an increasingly difficult capital-raising environment, and following a review of the market in Australia, Xinja has decided to withdraw the bank account and Stash (savings) account and cease being a bank. This was an incredibly hard decision”, Xinja said in a statement [1].


  • Founders: Errol Damelin, Jonty Hurwitz
  • Founded: 2006
  • Headquarters: London, UK
  • Total funding disclosed: $158MM

What did Wonga do?

Wonga provided short-term online cash loans for British consumers. Wonga relied on decision technology and risk-modeling to automate its lending business.

Why did Wonga fail?

Unfortunately, the company's AI was lending out funds to people that couldn't afford to repay the loans. As a result, the company ended up writing off loans for 330,000 clients. The company also waived fees and interest payments for another 45,000 clients. After a scandal involving sending fake letters of demand to customers in arrears, the FCA demanded Wonga pay £2.6 million in compensation. Wonga officially closed in 2018.


  • Founder: Frank Stevenaar, Ivonne Bojoh, Marnix Zwart
  • Founded: 2014
  • Headquarters: Singapore
  • Total funding disclosed: $97MM

What did GoBear do?

GoBear had aspirations to become "Asia's only impartial and unbiased metasearch engine for insurance and financial products."

Why did GoBear fail?

GoBear ceased operations due to its inability to raise funds due to the global coronavirus crisis. According to CEO Adrian Chng, "GoBear has made the difficult decision to close the business. Our purpose has been to improve the financial health of people across Asia, and I'm proud and grateful for the contributions that all our employees and partners have made towards that mission" [2].


  • Founder: Kurt Rathmann
  • Founded: 2013
  • Headquarters: Austin, TX
  • Total disclosed funding: $108MM

What did ScaleFactor do?

ScaleFactor provided software for automating and streamlining back-office tasks such as bookkeeping and payroll for small to medium-sized companies.

Why did ScaleFactor fail?

The Covid-19 pandemic wiped out demand for its services as businesses closed across the US. In an interview with Forbes, Kurt Rathmann said, "It's not the outcome we wanted, but it's the fiscally responsible CEO thing to do" [3].

Clarity Money

  • Founder: Adam Dell
  • Founded: 2016
  • Headquarters: New York, NY
  • Total disclosed funding: $14.5MM, acquired by Goldman Sachs for $100MM

What did Clarity Money do?

Clarity Money was an expense-tracking and bill negotiation app.

Why did Clarity Money fail?

"Clarity Money, the personal finance technology service acquired in 2018 by Goldman Sachs, is closing its doors early next month" [4]. Goldman Sachs decided to integrate Clarity’s best features into Marcus Insights, part of Goldman Sachs’ Marcus app.


  • Founders: Alex Payne, Joshua Reich, Shamir Karkal
  • Founded: 2012
  • Headquarters: Portland, OR
  • Total disclosed funding: $15.3MM, acquired by BBVA for $117MM

What did Simple do?

Simple was a "neobank" platform for online banking and lending.

Why did Simple fail?

In a message to customers, Simple says BBVA has made the "strategic decision" to close the digital bank, with accounts moved to the parent firm.


  • Founder: Dave Lyon
  • Founded: 2014
  • Headquarters: Chicago, IL
  • Total disclosed funding: Privately funded by Dave Lyon (undisclosed)

What did Oranj do?

Oranj offered adviser tech products, including its Advisor Dashboard, portfolio management, client portal, rebalancing, and financial trading.

Why did Oranj fail?

Oranj closed without much explanation. It gave advisors just 6 weeks to find replacement technology.


  • Founder: Subsidiary of Alphabet (Google)
  • Founded: 2011
  • Headquarters: Oakland, CA
  • Total funding disclosed: $125MM

What did Loon do?

Loon was Google's attempt to deliver internet access to remote areas, with balloons containing solar-powered networking gear floating on the edge of space.

Why did Loon fail?

Alphabet Inc shut down Loon after concluding the business was not commercially viable. 'While we've found a number of willing partners along the way, we haven't found a way to get the costs low enough to build a long-term, sustainable business,' said Loon CEO Alastair Westgarth [5].


  • Founder: Jeffrey Katzenberg
  • Founded: 2018
  • Headquarters: Los Angeles, CA
  • Total funding disclosed: $1.75BN

What did Quibi do?

Quibi was a streaming service aiming to revolutionize how people consume entertainment.

Why did Quibi fail?

Quibi closed after failing to meet subscriber projections. “Our failure was not for lack of trying," founder Jeffrey Katzenberg and Chief Executive Meg Whitman said in an open letter to employees and investors. "We've considered and exhausted every option available to us" [6].


  • Founders: Hosain Rahman, Alexander Asseily
  • Founded: 1997
  • Headquarters: San Francisco, CA
  • Total funding disclosed: $984MM

What did Jawbone do?

Jawbone was a manufacturer of fitness trackers, headsets, and wireless speakers.

Why did Jawbone close?

The rise of other fitness trackers like Fitbit and Whoop saw the company rapidly lose market share. "With its demise, Jawbone become [sic] the second-costliest VC-backed startup failure of all time" [7].

Article sources

[1] Financial Standard. "Xinja ceases banking, https://www.financialstandard.com.au/news/xinja-ceases-banking-177085451" December 16, 2020.

[2] The Business Times. "Singapore financial services fintech GoBear folds business, https://www.businesstimes.com.sg/garage/singapore-financial-services-fintech-gobear-folds-business" January 5, 2021.

[3] PYMNTS. "SMB Accounting Automation Firm ScaleFactor To Close, https://www.pymnts.com/news/b2b-payments/2020/smb-accounting-automation-firm-scalefactor-close/" June 24, 2020.

[4] Business Insider. "Goldman shuts down Clarity Money app to unify its PFM play under Marcus, https://www.businessinsider.com/goldman-sachs-shutters-clarity-money-doubling-down-on-marcus-2021-2" February 2, 2021.

[5] CNBC. "Alphabet cancels Loon, project to beam internet to earth from balloons, https://www.cnbc.com/2021/01/21/alphabet-cancels-loon-project-to-beam-internet-to-earth-from-balloons.html" January 21, 2021.

[6] The Wall Street Journal. "Quibi Is Shutting Down Barely Six Months After Going Live, https://www.wsj.com/articles/quibi-weighs-shutting-down-as-problems-mount-11603301946" October 22, 2020.

[7] CBINSIGHTS. "208 Of The Biggest, Costliest Startup Failures Of All Time, https://www.cbinsights.com/research/biggest-startup-failures/" February 10, 2021