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Opinion: Any one of these 15 money-losing companies could become the stock


David Rush holds a Guinness world record for cramming 100 candles into his mouth and lighting them. Sandeep Singh Kaila spun a basketball on a toothbrush for a record 1 minute and 8.15 seconds. Neville Sharp emitted a 112.4 decibel burp.

If those zany stunts can make it into the Guinness Book of World Records, there should be a category for something really important — the world’s biggest startup company failure. There is certainly no shortage of contenders for this dubious honor.

Before 2015, the biggest bankruptcies (by funding) were Solyndra ($1.2 billion), Abound Solar ($614 million), and Better Place ($675 million). WebVan got a lot of publicity when it received $275 million in venture capital funding and failed in 2001 after three years of operation. More recently, Theranos received $500 million in venture capital funding and was a well-publicized disaster, with CEO Elizabeth Holmes and president Ramesh “Sunny” Balwani both convicted of multiple counts of fraud.

Those failures are large, but the cumulative losses of many startups that have not yet gone bankrupt are orders of magnitude larger. The table below shows the funds raised by the 15 biggest money-losing startups in the U.S. Cumulatively they raised $93.8 billion in startup funds and have lost $135.1 billion.

Only one of these 15 companies has ever had a profitable quarter — Airbnb had a $378 million profit on $2.1 billion in revenue in the second quarter of 2022. All of the other startups in the table have recent losses that exceed 10% of revenue and most exceed 30%.

Any hopeful arguments that profitability is just around the corner ring hollow when every company is at least nine years old and two are more than 20 years old. At some point, investors will say, “Enough is enough” and realize that it is a sunk-cost fallacy to throw good money after bad.

Startups with $3 bllion or more in cumulative losses

Company

Founded

Funds Raised

Cumulative Losses

Uber Technologies
UBER,
+5.52%
2009

$25.2 billion

$31.7 billion

WeWork
WE,
-0.99%
2010

$21.9 billion

$20.7 billion

Teladoc Health
TDOC,
+1.15%
2002

  $0.17 billion

$11.2 billion

Rivian Automotive
RIVN,
+3.46%
2009

$10.7 billion

$11.1 billion

Snap
SNAP,
-2.12%
2011

  $4.9 billion

  $9.1 billion

Lyft
LYFT,
+1.36%
2012

  $4.9 billion

  $8.9 billion

Airbnb
ABNB,
+4.33%
2008

  $6.0…



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