Cause of Failure

Despite having 80 clients, most of them had limited budgets which made it difficult for Utrip to gain traction and be profitable. The costs associated with sales, marketing and keeping the recommendation engine alive was too much for them since their expenses were higher than their revenue at one point. The investors wanted to see growth and there was no way they could show traction without spending more. They were caught in a vortex they had little control over as only an external push could save them.



For Utrip to survive, they either had to find investors or be acquired. The founders turned to their biggest clients to see if they would be willing to invest in Utrip. Many of them balked at the idea because they were worried that they would be investing in a product that its competitors would use.



Another aspect of its failure was that the founder himself admitted that they spent more on their technology and concentrated less on sales and marketing. B2C travel startups have a tough time driving traffic as the biggies like TripAdvisor and Expedia could easily outdo them with their marketing.



There was also a lot of banter about how the investors were not properly communicated with during the fag end of the company. While there is no way to ascertain that, we can safely say that things weren’t okay between the founders and the investors. Media company Skift says that trip-planning startups have failed more than other companies in the travel space.



A buyer was interested in Utrip, a 94-page acquisition document was prepared and just three days before the signing, the deal was called off. The lawyers of the buyer unearthed a patent by a rival company called WayBlazer that had a direct conflict with Utrip’s technology. Attempts to buy the patent from the company failed. Seven weeks after this incident, Utrip shut down.

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