Why Betafi Shut Down: The Rise and Fall of a Promising UX Research Startup

Ever wondered what happened to Betafi—the startup that once promised to revolutionize user interviews and UX research workflows? If you were a startup founder, product designer, or a researcher around 2022 or 2023, there’s a good chance you tried Betafi or at least heard of it. Seamlessly integrated with Zoom, Meet, Miro, and Figma, Betafi had the potential to become the go-to research toolkit for building better products.

And yet, by late 2024, the same company had pulled the plug. With funding, buzz, and strong early traction, why didn’t Betafi survive?

📉 The short answer: Betafi failed to scale revenue in a hyper-competitive market, burning through funding faster than it could monetize its niche product.

But as you’ll see, the long answer includes a complex cocktail of tough competition, timing challenges, and limited product-market fit. Let’s dive in.

What Was Betafi?

Betafi was a Singapore-based startup founded in 2021 that aimed to simplify user research for product teams and early-stage founders. Its core offering? A unified platform for conducting moderated UX research with built-in features like:

• Real-time interview recording and notetaking
• Automatic transcription
• Seamless integrations with Zoom, Google Meet, Miro, Figma, and more
• Prototype testing and sharing within one platform

The idea was elegant: streamline everything product teams need for discovery interviews and usability testing, all in one place.

By November 2022, Betafi had raised $1.3 million in a pre-seed round from notable investors like Together Fund, Entrepreneur First, and Titan Capital. Media outlets like Tech in Asia and e27 heralded it as a game changer for lean teams conducting research.

That initial traction showed real promise—but the follow-through proved more difficult.

Why Did Betafi Fail?

Short Answer:

Betafi failed because it couldn't gain sustainable revenue or carve out enough market share in an increasingly saturated and competitive UX research space.

Long Answer:

Let’s unpack the key reasons behind Betafi’s closure.

1. Low Revenue and Unsustainable Burn Rate

Despite raising $1.3M in pre-seed funding, Betafi’s revenue as of late 2023 was just $8.88K annually. That’s a glaring mismatch in terms of ROI. Even with a loyal early user base, the company failed to monetize at a scale that justified ongoing operations or future funding rounds.

They targeted small teams and early-stage founders with pricing as low as $20 for 10 interview hours. While accessible, this low-ticket model couldn't support the infrastructure or team needed to build, iterate, and market a complex SaaS product.

2. Fierce Competition from Big-Name Players

Betafi entered a crowded market dominated by deep-pocketed incumbents like:

• UserTesting
• FullStory
• User Interviews
• Lookback

These companies had years of traction, enterprise-level integrations, advanced analytics, and robust recruiting pipelines. For Betafi, differentiating itself was hard—and growth was expensive.

According to Tracxn, over 500 startups were playing in the user research space, piling pressure onto any newcomer trying to stand out.

3. Market Fit: Love From a Niche, But Not the Masses

Betafi built something a subset of UX researchers genuinely loved—but it didn’t extend broadly to enterprise teams or non-tech verticals. The product resonated with indie makers and startup founders, but never fully crossed over to larger markets where higher-ticket clients might support meaningful revenue growth.

There was initial enthusiasm on platforms like Product Hunt and Medium—even a tearful goodbye post from a loyal user—but the love wasn’t wide enough to keep the lights on.

4. Product Complexity and Limited Differentiation

Betafi offered a streamlined research workflow, but by packaging existing tools together rather than inventing a brand-new experience, it risked being seen as a “nice-to-have” rather than a “must-have.”

Larger companies either stitched their own stacks together or went with mature vendors that handled recruitment, analytics, and feedback loops far beyond what Betafi could offer at the time.

5. Limited Runway and No Follow-On Funding

Their initial funding in 2022 was impressive, but there is no evidence Betafi raised additional rounds afterward. With rising infrastructure costs, a small team, and a critical need for marketing spend, they likely ran out of cash runway without achieving investor milestones—especially hard during the post-2022 tech funding crunch.

In a market where team size, cash burn, and pace of iteration dictate survival, Betafi lacked the reserves to “buy time” and iterate on its offering.

What Competitors Did Differently?

To understand Betafi’s shutdown better, let’s contrast it with a thriving peer like UserTesting.

Here’s what UserTesting got right:

• Funding Scale: Raised over $100M, which enabled scaling of recruitment networks, testing tools, and integrations rapidly.
• Enterprise GTM Strategy: They focused on large customers with repeat usage, maximizing return per customer.
• Recruitment Network: Offered built-in participant recruitment, a key pain point Betafi didn’t solve.
• Established Market Position: Being earlier to market helped build trust in industries like fintech, healthcare, and e-commerce.

Betafi, by comparison, built for smaller teams with leaner budgets. While visionary, it limited the potential for ARR (annual recurring revenue) and upmarket expansion.

Final Takeaway: A Great Idea Isn’t Enough

Betafi wasn’t a bad product—in fact, by all available reviews, it was a great one. But great products don’t survive without a viable business model, a path to scale, and room to breathe among competitors.

Its story is a cautionary tale in modern SaaS: even with strong early funding, a thoughtful product, and a real market need, startups fail if they can’t find scalable revenue or stay ahead of competitors.

In the end, Betafi made user research easier for many—but couldn't do it profitably enough to stay in business.

FAQs About Betafi

Who founded Betafi?
Betafi was founded by Arjun Arora and Ethan Sherbondy in 2021.

When did Betafi launch?
Betafi began operations in 2021 and publicly launched its main product shortly after its pre-seed funding in late 2022.

When did Betafi shut down?
Betafi announced the sunsetting of its web platform and services on October 1, 2024. As of February 2025, it is no longer operational.

How much funding did Betafi raise?
Betafi raised $1.3 million in pre-seed funding in November 2022.

Why did Betafi fail?
The primary reason appears to be low revenue ($8.88K annually) versus high operational costs, coupled with fierce competition and limited market adoption.

What happened after Betafi shut down?
There is no public information on asset sales, team transitions, or acquisitions. Their LinkedIn remains active, but with no updates about the company’s future.

Even the best tools can disappear if the market won’t pay for them. Betafi’s brief but bright presence left a mark on those who used it—but it also left a lesson for builders everywhere: in a crowded space, product love must meet financial traction.