Innovative UK startups that have gone into administration since COVID

Despite a meteoric rise that saw them raise millions in funding, these fast-growth startups couldn’t survive today’s harsh trading landscape.

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Written and reviewed by:
Helena Young
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The past few years have been disastrous for UK startups. In quick succession, we’ve had a recession, a pandemic, a Brexit, a cost of living crisis, and a number of global conflicts – all of which have left little breathing room for new businesses.

The worst, economists say, is behind us. In May, the UK exited a recession with its fastest growth in two years. Still, that’s little comfort to those that didn’t make it. For many firms, it was a case of ‘wrong place, wrong time’, creating a surge in business failures last year.

That includes some of the UK’s most innovative new companies. Below, we list the leading startups that once boasted million-pound valuations, and yet sadly fell into liquidation post-COVID. We’ll ask what went wrong, and surface the learnings from their insolvencies.



Used car dealer, Cazoo first sped onto the startup scene four years ago, when we named it in the Startups 100 Index as a ‘one to watch’. Having been founded in 2018, it was the brainchild of serial entrepreneur, Alex Chesterman OBE. Immediately, the brand went into overdrive.

Cazoo’s easy, 3-day delivery of a second-hand car revolutionised the automotive sector. In just two years, it became the fastest British business to achieve unicorn status ever.

However, rumours that the startup was in trouble began brewing last year. The brand confirmed it was looking for a buyer amid cash flow problems in early May, and it finally collapsed into administration just a couple of weeks later.

What can startups learn from Cazoo’s collapse?

Largely, Cazoo’s financial woes were due to sector-based issues that were out of its control. Reduced production of new cars caused a shortage of used cars entering the market, while tight consumer budgets clashed with rising used car prices, further impacting sales.

Owning/leasing large showrooms added further financial burdens. But Cazoo kept targeting expansion, investing in marketing and high sales figures despite the challenging market.

Ignore the numbers at your peril. Cazoo’s collapse is a classic example of the dangers of not considering sustainable growth. The company has now slammed on the brakes, and is planning to pivot online to scale-down its overheads and service offering.


There’s not many electric vehicle (EV) companies that consumers have heard of, but Arrival is probably one of them. Founded by Deni Sverdlov, a Russian billionaire, in 2015, the group reached a top valuation of £9bn in 2021, and was listed on the Nasdaq stock exchange.

With two factories in Oxfordshire, the company wanted to become one of the biggest automated manufacturers of EVs in the world, made entirely with sustainable materials. After eight years, however, Arrival’s EV creations had not left the design stage. An estimated £1.5bn had been invested in R&D, with no production beginning on any of its products.

Despite concerted efforts to reduce costs, including layoffs and searching for a potential buyer, EY was appointed as administrator in February 2024.

An EY report reveals the full, bleak picture of Arrival’s financial situation. Arrival UK lost £669.3m in revenues over 2022 and 2023. It owed £87.3m to secured creditors, £1bn to shareholders, and £1.6m to HMRC.

What can startups learn from Arrival’s collapse?

Having a clear roadmap to profitability is fundamental when launching a startup. Arrival ran out of road, as its ambitious business objectives outpaced its ability to execute.

Concentrating on smaller milestones, spread over a realistic timeline, could have helped the transition from design to production, soothing creditor doubts. Arrival realised this too late.

In 2022, it paused its side projects and focused resources purely on producing 600 of its vans. Even this proved undoable. When the first van finally rolled off the assembly line in Autumn 2022, it was made entirely by hand, not automated.


When Britishvolt first launched back in 2019, it sent shockwaves through the manufacturing industry. The company’s mission statement was bold and brilliant; it planned to transform UK car production by making batteries for electric vehicles and employing tens of thousands.

Hailed by Boris Johnson as a leader of the UK’s green industrial revolution, Britishvolt charged towards a valuation of over £800m. The government promised £100m to support the project, and Britishvolt shared plans to build a ‘gigafactory’ in Blyth, Northumberland.

Then, a period of excessive spending began. Executives travelled on a private jet, while a £2.8m mansion was rented out for the summer party. Hiring went haywire, as the business aimed to recruit 3,000 skilled workers in two years. Unsurprisingly, Britishvolt ran out of cash.

In early 2023, Britishvolt flatlined. Nearly all of its 300 employees were made redundant, and the firm appointed accountancy firm EY as administrators. A rescue deal faltered, and the Blyth site was sold for redevelopment in April 2024.

What can startups learn from Britishvolt’s collapse?

Setting ambitious goals is important, but they need to be grounded in a realistic understanding of the resources required.

Britishvolt’s ambitions were always heady. Yet, perhaps buoyed by its unicorn status, shareholders did not anticipate the huge amount of R&D spending required to reach its goal.

Startups need to be able to balance R&D investment with cost-effectiveness. Had the business instead focused on meeting its delivery targets, the promised government funding might have been enough to sustain its future growth plans.


Manchester-based flexible working startup Orka first launched back in 2016. Its innovative products included Orka Pay, a tool for workers to access wages early, and Orka Works, a management platform for gig economy workers and employers to manage and plan shifts.

It should have been a monumental rise through the charts for Orka. The temping sector has become hugely popular post-COVID, as more companies lean on flexible and short-term workers to plug labour shortfalls.

Orka did manage to garner some impressive backers, including the Northern Powerhouse Investment Fund. It also earned a £29m mixture of debt financing from Sonovate and equity funding involving the British Business Bank Future Fund.

However, as the economy took a turn for the worse, Orka struggled to take on high-paying, large business clients. Like many tech firms, Orka also struggled to raise money, as investment dried up, and founder Tom Pickersgill called in the administrators in April 2024.

What can startups learn from Orka’s collapse?

You can have a brilliant idea, but you’ll need a stable financial foundation to make it work. Orka’s struggle to raise additional funds in a difficult economic climate highlights the importance of building a strong network and securing funding when possible.

Pickersgill told The Business Desk, “It’s been a tough 12 months. Orka was a fantastic business with plenty of potential. We did everything we possibly could, we made some really tough calls. But it’s hell out there at the moment trying to raise money for a tech business.”

Babylon Health

It was once a staple on tube adverts. Babylon Health, the London-based healthtech company, gained immediate popularity when it launched in 2013. Amid growing NHS waitlists, the chatbot offered instant access to GP services, and served over 115,000 Brits.

Babylon Health quickly launched in the US, and listed on the New York Stock Exchange (NYSE) in 2021, valued at over $4bn.

Patients might have been satisfied, but clinicians were less happy. Doctors reported issues with the ‘intelligent’ AI Babylon software that was causing them to miss symptoms during patient check-ins. Yet despite these concerns, Babylon partnered with three NHS trusts.

Eventually, the complaints became too loud, and regulator MHRA stepped in. Partner confidence wobbled, and Babylon began losing major contracts in the UK. It sought to acquire rival tech to boost its balance sheets, but the deals fell through.

In 2023, the company delisted from the NYSE and appointed administrators in the UK. Babylon’s assets were sold to eMed Healthcare UK for just $630,000.

What can startups learn from Babylon Health’s collapse?

Balancing innovation with regulation is difficult. It has thrown many startups, and Babylon is not the first AI healthtech to fall victim. Likely, with proper development, its tech could have worked. Plenty of startups are working on the mission of automating clinical assessments.

Don’t be afraid to move slowly and fix things. Where Babylon specifically went wrong is that it failed to stop, consider, and redesign when those first red flags came in from medical professionals, and a meteoric rise led to a suitably massive fall in revenue and user trust.


“Circular economy” fintech, Twig entered administration just four years after it launched back in 2020. The company managed to raise £32m in funding, but declared itself insolvent at the start of January, citing a challenging fundraising environment for its downfall.

Twig’s trade-in business model allowed customers to send in used gadgets and other high-ticket items to the company, in return for payment. Its innovative in-app payments account, where users could receive funds, allowed it to market itself as a fintech.

Founded by entrepreneur Geri Cupi, the brand also offered a carbon offsetting subscription service, and had also toyed with rolling out “web 3.0 infrastructure” for cryptocurrencies.

However, Twig’s worsening financial situation put a stop to the company’s growth plans. When it folded, Companies House filings show it owed £15.4 million to creditors.

What can startups learn from Twig’s collapse?

Twig is just one case study in an extraordinary funding crisis that has gripped the UK fintech sector. Despite previously being one of the most lucrative industries for investment, the money has dried up for fintechs, causing a 37% decline in funding in the first half of 2023.

Other fintech prodigies which have collapsed into administration in the past 12 months include SME banking company, Silverbird; business cash management app, Paysme; and opening banking player, Kikapay.

Twig’s collapse demonstrates the end of the previous, experimental era of financial services. Today’s investors want debt-free, steady-growth companies, which is why firms need to prioritise strong cash flow over product diversity and expansion efforts.

Thankfully, Cupi appears to have taken the setback well. The young entrepreneur has already launched a new circular economy fintech called Wingpay, months after Twig shut down. Let’s hope he has a better funding source lined up for this next venture.


It’s another EV startup. Electric-car subscription firm Onto entered administration at the end of last year, after failing to obtain a rescue deal from its lead investor, Legal & General.

Founded in 2017, Onto’s monthly all-inclusive subscriptions were designed to give consumers easy-access to expensive electric vehicles. According to Coverager, Onto has a 7,000-strong EV fleet, and has serviced around 20,000 customers since 2018.

Investors had pumped plenty of money into Onto’s engine. It raised $60m in a Series C round led by Legal & General in 2022, and planned to use the money to expand operations.

Onto’s USP became its downfall, however, when the residual value (the estimated value of a fixed asset at the end of its lease term) of EVs dropped substantially in 2023.

Since its borrowings were secured against its fleet, the company’s valuation fell while debt levels rose, and the owners were forced to call in administrators in September.

What can startups learn from Onto’s collapse?

Administrators offered a concise analysis for their reasoning of why Onto collapsed. “Onto suffered from the steep fall in electric vehicle residual value in the first half of 2023, rising interest rates and the squeeze on disposable income, and was unable to secure additional funding from its shareholders,” said Gavin Maher, joint administrator.

Hype does not necessarily translate into sales. While electric vehicles are almost certainly the future of the automotive industry, the cost of living crisis means that commercial interest for Onto unfortunately did not keep pace with its own appetite for R&D spending.

Until the market generates a viable level of consumer demand (and overcomes its supply issues), firms need to be realistic about when they will turn a profit.


AI startups were on every investor’s lips last year. Research shows that AI firms received 66% more funding, on average, last year. Rumours of an investment bubble began to grow.

One of the high-profile startups to pop is Cervest, which entered administration in June 2023. The company, which uses AI to predict clients’ climate risk, was described by the government as one of the most “exciting” AI firms three months prior.

Cervest launched back in 2016. It raised $30m (£23.4m) in Series A funding in 2021, and featured prominently at London Tech Week last year, months after announcing partnerships with big-name companies such as Wickes.

However, despite assuring the Cervest workforce that it had enough money to stay afloat, a report by the Evening Standard found that the brand was struggling.

Directors attempted a sale of the business, but were unable to find a buyer. Administrators were appointed, and they managed to cover Cervest’s debts by selling its Intellectual Property to a rival brand. At this point, Cervest had not paid its employees for three months.

What can startups learn from Cervest’s collapse?

Cervest’s sudden downfall from government starkid, to insolvent, seems to be due to mismanagement at the top. Founder and CEO Iggy Bassi was firmly in denial that the company was burning through cash at an unsustainable rate.

The company went on a hiring spree in September 2022, certain that its financial situation would even out eventually. Even when he was unable to pay staff, Bassi told the Standard Cervest he had been confident more funding was imminent.

Failure is painful, but denying you are in trouble makes the situation far worse. Effective, and cautious, cash flow forecasting can help you to plan ahead for the next year to ascertain if your company really can survive the next 12 months, so your employees don’t end up reaping the consequences of the company’s mistakes.


Founded in 2015, Bink immediately won over investors with its revolutionary Payment Linked Loyalty (PLL) technology. This allowed customers to pair their debit cards with brands’ loyalty programs, ensuring they could access deals and organisations could easily reward regular purchasing. Two years later, it was valued at an impressive £100m.

In 2019, Bink received a hefty investment from Lloyds Bank, which bought a minority stake in the startup as part of a £10m funding round. But then, disaster. Despite extending its partnernships to include Barclays Bank, Bink lost £11.8m in the year to August 2022 according Companies House filings. At this point, the firm desperately needed money. Accumulated losses reportedly stood at £67.5m.

Bink then went onto raise an additional £9m in 2023, and it looked as though the startup might weather the storm of the fintech funding drought. Still, layoffs quickly followed, as Bink’s 85-strong person team in 2023 fell to 46 members of staff.

These cost-saving measures weren’t enough to keep Bink afloat, however, and the firm announced it had appointed liquidators on 29 May 2024. Speaking to FinTech Futures, the appointed advisory firm, FRP Advisory says Bink had “suffered significant losses for a number of years and recent efforts to secure additional funding had proved unsuccessful”.

What can startups learn from Bink’s collapse?

There is no doubting the innovation behind Bink’s product. Promising to offer savings and discounts to customers seemed like an easy win. In a kinder trading environment, Bink might have managed to find new funding and plug its debt.

Yet, the downfall for startup is a common one for tech businesses: education. Analysts reckon that the Bink product was too far out of reach for customers, who had to trawl through an app menu to find it. Even then, Bink’s USP made it difficult to understand how the software worked.

Particularly when you’re bringing a brand new product to market, new businesses need to invest in a significant marketing push to ensure their audience (in Bink’s case, UK cardholders), not just investors, will buy into the idea.

It’s not just the newbies which are struggling. Read our guide to the top high street brands that have gone into administration post-COVID.

Written by:
Helena Young
Helena is Lead Writer at Startups. As resident people and premises expert, she's an authority on topics such as business energy, office and coworking spaces, and project management software. With a background in PR and marketing, Helena also manages the Startups 100 Index and is passionate about giving early-stage startups a platform to boost their brands. From interviewing Wetherspoon's boss Tim Martin to spotting data-led working from home trends, her insight has been featured by major trade publications including the ICAEW, and news outlets like the BBC, ITV News, Daily Express, and HuffPost UK.

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