Over 6,300 startups recognised under India's Startup India programme had shut down by October 2025, according to government data presented in the Lok Sabha. Maharashtra led with 1,200 closures, followed by Karnataka at 845 and Delhi at 737. The primary cause? Running out of cash, often before generating any revenue.
Office Rent Drains Startup Capital
A major culprit is office rent. For a modest 1,000-square-foot space in Delhi, rent averages ₹1.1 lakh per month, plus a security deposit of two to ten months' rent—often six months or more, locking away ₹6.6 lakh or more. This capital could otherwise fund product development, team salaries, and extend runway from 9–12 months to 18–24 months.
“We kept meeting founders who had done everything right and still ran out of road,” said Ankur Goel, Founder at Address.co. “When we looked closely, a painful amount of their money was just sitting in a deposit, or going out as rent every month for an office that stayed half empty. That capital belongs in the business.”
Virtual Offices as a Solution
Virtual offices offer a way out: a GST-valid business address and access to meeting spaces for a fraction of the cost, with no large deposit. Address.co, one of India's largest virtual office providers, serves over 22,000 businesses, including Swiggy, HTC, and Saregama. Together, these businesses have retained more than ₹650 crore in working capital that would otherwise be tied up in rent and deposits.
The company aims to change the mindset that a physical office equates to seriousness. “Our goal is simple. We want a million Indian founders to keep that capital in their business, so they can keep building,” Goel added.
Impact on Startup Survival
Around 90% of Indian startups fail within five years, and running out of cash is among the top reasons, per a CB Insights study. By eliminating upfront rent and deposits, virtual offices can significantly extend runway, giving startups more time to achieve product-market fit and revenue.
For founders considering a lease, the pitch is blunt: keep the deposit, build the business. Address.co plans to share more on its 2040 goal in the coming months.
