The carcasses of hundreds of Indian start-ups are floating belly-up in the ‘deadpool’ of failed enterprise, as the bubble in the sector threatens to pop any time, in an eerie echo of the dot-com bust of 2000.

That’s the chilling finding of start-up research firm Tracxn, which has drawn up a list of 763 start-ups in India that have downed shutters in the past 18 months due to lack of funds, or the inability to run a venture profitably.

Abhishek Goyal, founder of Tracxn, said the idea to compile what’s called the ‘Deadpool’ list came after a series of requests from corporate firms and venture capital firms who intended to ‘acqui-hire’ the talent in these struggling firms or help them build products similar to the ones they were already working on. Tracxn has tracked companies that were founded post 2011, when the funding activity had just begun.

Goyal said the failure rates among start-ups is usually in the range of 20-30 per cent, but it stood much higher in 2015, after investor fund-flows dwindled. Several reasons are being citedfor the problems plaguing the sector, including rampant discounts, high digital marketing expenses, low-ticket revenues per transaction, standardisation issues, low margins, and cut-throat competition across cities.

“The later-stage investment, especially Series B and C, has come down drastically; however, angel funding is at an all-time high. But ‘angel’ is a low-ticket size funding..and we can see the average ticket-size of funding come down this year,” Goyal said.

According to the Tracxn, e-commerce, food-tech and mobile software top the Deadpool list. Even though start-up funding hit an all-time high in 2014-15, a large number of companies went bust during the period.

While VC funding in India peaked at $8.9 billion in 2015, investment fell to $2.7 billion during the first two quarters combined in 2016, according to London-based Preqin.

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