Elevation Capital-Backed AI Startup Alle Shuts Shop

Elevation Capital-backed AI fashion stylist platform Alle has officially shut its operations.  In a LinkedIn post, cofounder Prateek Agarwal said that the decision to shutter shop was taken in October 2025 after six failed pivot attempts. 

As per the cofounder, the startup failed to find appropriate product-market fit as well as a viable business model. 

For context, Alle offered users a personal “AI stylist”, helping them find new outfit ideas. Based on a conversation with its chatbot, users could explore fashion offerings from over 1,000 brands curated on a single platform. 

Alle’s mobile app was removed from marketplaces Google Play Store and Apple’s App Store a few months ago. The startup claimed to serve over 1.5 Mn Gen Z shoppers and command a fast-growing base of active users. It had also partnered with warehouse management SaaS company EASYECOM to scale up its B2B business. 

“Over the 2.5 years we spent building Alle, we pivoted six times, each time believing we were getting closer to a large enough opportunity. Eventually, we had to accept that the opportunity cost of everyone’s time outweighed another uncertain pivot,” Agarwal said. 

The startup was founded by ex-Meesho executives Agarwal, Harshit Madan and Pavan Patil in January 2023. Madan and Patil exited the venture in October 2025, consequent to which Patil rejoined Meesho as a director of engineering in November. 

Months after incorporation, the Bengaluru-based startup had raised $3 Mn in its seed funding round from Elevation Capital, Bharat Founders Fund and The Singhal Children. It is yet to be discerned if the startup returned back any capital to its investors.

With this, Alle became the first startup to announce shutdown in 2026. However, it is not the first AI-based startup to wind up operations due to lack of PMF and an unsustainable business model. AI application layer startups subtl.ai, CodeParrot and Astra shut down operations for these reasons in 2025, as well as a failure to raise further capital. 

AI startups lacking a clear distinguishing factor are expected to face trouble in 2026. As per a recent Inc42 survey, investors are likely to begin discounting “AI-on-top” business models that rely heavily on third-party infrastructure without a meaningful differentiation. 

In the survey of 100+ Indian startup investors, 44% of respondents flagged lack of moat as the biggest AI investment risk. Besides, 20% investors flagged unclear unit economics as a major concern in backing AI-first startups. 

Despite this, AI funding is expected to continue to flow in 2026 but will be more concentrated into companies with clear IP ownership, proprietary data, or infrastructure leverage.