In a startling turn of events, design startup InVision, once valued at an impressive $2 billion, has announced its impending shutdown at the end of this year, as revealed in a company blog post on Thursday. 

The news follows a period of decline, during which the business experienced a significant drop in revenue and ultimately sold its core business line to competitor Miro last fall.

Once celebrated as a market leader in collaborative design software, InVision struggled to maintain its foothold after Figma, a rival firm, gained widespread popularity, successfully diverting its customer base. Previous reports highlight InVision’s challenges, noting a 50% reduction in revenue to $50 million in 2022.

The startup, backed by substantial investments totaling more than $350 million from notable contributors like Goldman Sachs and Spark Capital, now finds itself in the company of other failed ventures that faltered when investors hesitated to inject additional funds.

Read: Conversational AI Startup Coqui Shuts Down

Convoy, Veev, and OliveAI, despite collectively raising around $2.5 billion from venture investors, also succumbed to the difficulties of sustaining their operations.

The demise of InVision reflects the harsh reality faced by startups in the current economic landscape. As borrowing costs rise, cash reserves dwindle, and venture capitalists grow more cautious, companies like InVision find themselves with fewer opportunities for financial recovery.

The downfall of InVision can be traced back to a pivotal moment when its founder and former CEO, Clark Valberg, recognised the rising threat from competitors. Despite early success and rapid growth, InVision faced a formidable challenge from Figma, a startup that ultimately eclipsed its market share.

Valberg’s attempts to salvage the situation, including an unsuccessful attempt to sell the company, highlight the difficulties startups encounter in securing second or third chances in an increasingly competitive and unforgiving business environment.

InVision, once boasting a valuation of $2 billion and support from prominent investors, now stands as a cautionary tale in an era where market dynamics can swiftly shift, leaving even well-established startups vulnerable to the forces of change.