Rent Before Revenue Is Killing Indian Startups. There's a Way Out

India PR Distribution
New Delhi [India], June 23: Most Indian startups do not fail because the idea was wrong. They failed because the money ran out. And a large part of that money was gone before the first customer ever paid, locked into office rent and a fat security deposit.
Around 90 per cent of Indian startups shut down within their first five years, and running out of cash is one of the most common reasons behind it. This is not guesswork. Government data placed before the Lok Sabha shows that more than 6,300 startups recognised under the Startup India programme had shut down by October 2025. Maharashtra led with 1,200 closures, followed by Karnataka at 845 and Delhi at 737. Founders plan for 18 to 24 months of runway and then watch the bank balance run dry in 9 to 12.
Office space is one of the first places that money vanishes, and it happens before a single rupee of revenue comes in.
Take a small team in Delhi. Office rent in the city now averages around 110 rupees per square foot a month.
A modest 1,000 square foot space works out to roughly 1.1 lakh rupees every month. Then comes the deposit. Commercial landlords in India usually ask for two to six months of rent upfront, and in metros, that figure has gone as high as ten. At six months, that is 6.6 lakh rupees sitting frozen in a landlord's account.
It earns the founder nothing. It comes back only when the lease ends. For an early-stage business, that one signature can be the difference between a nine-month runway and an eighteen-month one.
A virtual office changes the maths. A founder gets a real, GST-valid business address and access to physical meeting space for a small fraction of that cost, with no deposit of several lakhs freezing capital that should be funding the product, the team, and the months of runway that decide whether a company lives or dies.
"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. Our goal is simple. We want a million Indian founders to keep it there, so they can keep building."
The company sees this as bigger than a single service. The real aim is to change how Indian entrepreneurs think about having an office at all. For a long time a physical office was treated as proof that a business was serious. Address.co is betting the next generation of founders will judge seriousness by how well they use their capital, not by how much they spend on an address.
For founders deciding right now whether to sign that lease, the company's pitch is blunt. Keep the deposit. Build the business.
Address.co will share more on how it plans to reach the 2040 goal in the coming months.
About Address.co
Address.co is one of India's largest virtual office providers, trusted by more than 22,000 businesses to set up a professional, GST-valid business address without paying for physical office space they do not need. Its customers range from first-time founders to well-known names like Swiggy, HTC, and Saregama. Together, these businesses have kept more than ₹650 crore in working capital out of office rent and deposits, money that stayed inside their businesses instead.
Sources:
Startups shutting down (more than 6,300 closed, led by Maharashtra, Karnataka and Delhi): Government of India data, as on 31 October 2025, shared by the Ministry of Commerce in a written reply in the Lok Sabha. The state-wise split sits in Annexure I of the same reply. Original release: Press Information Bureau. State numbers as reported: AngelOne.
Around 90 percent of startups fail, and running out of cash is one of the top reasons: CB Insights study of hundreds of startup post-mortems. CB Insights.
Office deposits of six months of rent, often higher in big cities: The Model Tenancy Act 2021 caps commercial deposits at six months' rent, but metros like Mumbai and Bengaluru still see six to ten months in practice. Business Today.
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