Can Kejriwal’s Political Startup Make a Comeback After Delhi Defeat?

Arvind Kejriwal’s Aam Aadmi Party (AAP) has suffered a major setback in the 2025 Delhi Assembly Elections, losing to the Bharatiya Janata Party (BJP) led by Narendra Modi. After ruling Delhi for over a decade, Kejriwal and his key leaders lost their seats, leaving AAP with just 22 seats, while the BJP secured 48, marking its return to power in the national capital after 27 years.

AAP's Top Leadership Collapse

The election results underscored a leadership crisis within AAP. Several top leaders, including Arvind Kejriwal, suffered major defeats. Kejriwal, the party’s national convener, lost to BJP’s Parvesh Verma in New Delhi by 4,089 votes. Former Deputy CM Manish Sisodia lost in Jangpura by just 675 votes. Ministers Saurabh Bharadwaj, Durgesh Pathak, and Somnath Bharti also faced defeats, while Satyendra Jain suffered the biggest loss with a 21,000-vote margin. These losses, coupled with corruption allegations and legal troubles, have severely dented AAP’s credibility.

AAP’s Political Startup: Rise, Fall, and the Future 

Despite its current struggles, AAP's journey has been nothing short of revolutionary. Kejriwal’s approach resembled that of a startup entrepreneur—identifying a gap in the political system, offering an innovative solution, and initially disrupting the market. He launched AAP through crowdfunding, attracting young professionals and idealists, similar to a startup securing early investors and top talent. In 2013, when AAP first contested Delhi Assembly Elections on the promise of clean politics and governance, it was seen as India’s biggest political startup. By 2022, the party had become a political unicorn, securing a massive 79% majority (117 seats) in the Punjab Assembly Elections. However, like many unicorn startups that struggle with scaling, governance, and financial management, AAP is now facing turbulence. 

AAP’s Political Startup: From Disruption to Decline

AAP’s trajectory bears similarities to Byju’s, the edtech giant whose valuation plummeted from $22 billion to under $1 billion due to financial mismanagement, legal troubles, and cash flow issues. Likewise, AAP has encountered several critical challenges:

1. Financial Mismanagement – AAP’s ambitious welfare schemes strained government resources, leading to allegations of budget misallocation and corruption.
2. Legal Troubles – Corruption cases against Kejriwal and his key ministers have tainted the party’s image.
3. High Marketing Burn Rate – Heavy spending on advertisements and promotions drained resources without yielding proportional political returns and failing to deliver on key promisses. 

Yet, despite its setbacks, AAP retains political capital. It remains a recognized national party, akin to a startup still listed on the stock exchange despite facing downturns. With a 44% vote share in Delhi, a government in Punjab, and 13 Members of Parliament, AAP still holds relevance in the political landscape.

Why AAP Lost Its Way: A Lesson in Governance and Strategy

AAP’s downfall can be attributed to several factors:

1. Inability to Work as a Team – Kejriwal’s autocratic leadership led to the exit of key figures like Anna Hazare, Prashant Bhushan, and Kumar Vishwas, turning AAP into a one-man show.
2. No Party Building – AAP failed to develop a robust organizational structure, centralizing power around Kejriwal.
3. Policy Bankruptcy – Lacking a clear ideological framework, AAP engaged in opportunistic alliances without consistent policy direction.
4. Governance Failures – Initiatives like mohalla clinics and model schools failed to meet expectations, marred by mismanagement and inflated records.
5. Lack of Long-Term Vision – In Punjab, AAP struggled with governance, particularly in addressing issues like the drug abuse crisis.
6. Failure to Offer Alternative Politics – Initially promising a new political approach, AAP succumbed to conventional power struggles.
7. Damage to Grassroots Movements – Kejriwal’s approach discredited the credibility of social movements, unlike other activists-turned-politicians who adapted and evolved.

Delhi Rejects AAP: What’s Next for Kejriwal and AAP?

Following the 2025 defeat, the biggest question is whether AAP can reclaim its lost ground. While the party still holds significant goodwill among non-BJP and non-Congress voters, Kejriwal must adopt a founder’s mindset and return to basics:

1. Rebuilding Leadership – Engaging with old colleagues and party veterans could bring experience back into the fold, though this may challenge Kejriwal’s control.
2. Strengthening Governance – Focusing on efficient policy implementation and transparent governance is crucial.
3. Rebranding and Retargeting – Like a startup pivoting after setbacks, AAP must redefine its core messagearound social development, corruption-free governance, and effective administration.
4. Internal Cleanup – Addressing corruption allegations and improving internal party discipline will be essential for regaining credibility.

AAP’s Political Shark Tank Moment: Can Kejriwal Rebuild?

Like BharatPe, a fintech startup that restructured its senior management and resolved leadership disputes, AAP must undergo a strategic overhaul. The party's journey has been a classic startup saga—a bold disruption, meteoric rise, and now a crisis demanding reinvention. Whether Kejriwal can revive his political brand hinges on his ability to acknowledge past mistakes, recalibrate his strategy, and implement a structured turnaround. Just as struggling unicorn startups sometimes stage remarkable comebacks, AAP’s survival depends on decisive action, internal restructuring, and a renewed commitment to its founding ideals.