The San Francisco startup ecosystem has claimed another victim, with car rental delivery service Kyte officially shutting down after a challenging few years of economic uncertainty.

Launched in 2019, Kyte positioned itself as a revolutionary alternative to traditional car rental companies by offering doorstep delivery and flexible pickup options. The startup boldly differentiated itself from competitors like Turo and Zipcar by providing convenient, app-based car rentals that could be delivered directly to users.

Despite raising over $300 million in financing and expanding to 14 cities with a fleet of more than 2,000 vehicles, Kyte ultimately couldn’t sustain its ambitious growth strategy. The company’s downfall reflects the broader challenges facing tech startups in a post-pandemic, capital-constrained market.

In a strategic pivot last fall, Kyte dramatically reduced its operational footprint, focusing solely on New York and San Francisco markets. However, this wasn’t enough to prevent its eventual collapse. The startup has now sold its customer list to competitor Turo and entered receivership in California.

Kyte’s CEO Nikolaus Volk had previously considered selling the company when business performance in markets like Boston, Atlanta, and Chicago proved disappointing. The startup’s challenges were likely compounded by pandemic-induced shifts in travel patterns and the subsequent economic tightening.

Unfortunately for customers, many who had pre-booked summer trips are still awaiting refunds, adding another layer of complexity to the startup’s closure.

This latest casualty underscores the volatile nature of the Bay Area’s startup ecosystem, where innovative ideas don’t always translate into sustainable business models. As venture capital becomes more scrutinizing, startups must demonstrate not just creativity, but also a clear path to profitability.