Ashneer Grover is in a soup. Last Sunday, Kotak Mahindra Bank said it was pursuing appropriate legal action against the BharatPe cofounder, who had sent the bank a legal notice on October 30 for failing to provide him financing in Nykaa’s initial public offering earlier that month.
BharatPe cofounder Ashneer Grover
The bank said, “The (legal) notice was received by us and was replied to appropriately at the time, including placing on record our objections to inappropriate language used by Mr. Grover. Appropriate legal action is being pursued.”
“Inappropriate language” was a reference to an audio recording that was shared on Twitter last week in which a man—allegedly Grover—is heard abusing and threatening an employee of the bank over the phone after failing to secure shares in Nykaa’s IPO. Grover initially claimed on Twitter that the recording was fake but later deleted that tweet. Now he’s being sued by the bank.
Today on Unwrapped we look back at three founders whose words and actions came back to haunt them.
Vishal Garg, Better.com
Better.com founder Vishal Garg
Vishal Garg, the Indian-American founder and CEO of mortgage company Better.com, fired 900 employees—about a tenth of the company’s workforce—during a brutal Zoom call in early December 2021. He said market efficiency, performance and productivity were the reasons for the mass sacking.
"This isn't news that you're going to want to hear… If you're on this call, you are part of the unlucky group that is being laid off. Your employment here is terminated effective immediately," Garg, 43, said.
One employee filmed the call and leaked it on social media, sparking a severe backlash.
Rather than apologise, Garg reportedly lashed out at his staff, calling them lazy and unproductive in an anonymous blog post on the network Blind.
"You guys know that at least 250 of the people terminated were working an average of 2 hours a day while clocking 8 hours+ a day in the payroll system? They were stealing from you and stealing from our customers that pay our bills,” read the post by a user called “uneducated”, which Garg later confirmed was him.
On December 11, he said he was taking time off with immediate effect.
Michael Lofthouse, Solid8
Solid8 founder Michael Lofthouse
Michael Lofthouse, the founder and CEO of cloud computing consultancy Solid8, was forced to resign in mid-2020 after his racist rant at an upscale California restaurant was caught on video.
He was filmed making slurs against Jordan Chan and her family, who were celebrating her aunt's birthday on July 4, 2020. Chan said Lofthouse insulted and harassed her family with racist language before a waitress told him to leave.
The video she posted to social media shows Lofthouse cursing and gesturing with his middle finger at the family. He also said, "Trump's gonna f— you… you f—— need to leave! You f—— Asian piece of s—!" It’s worth noting here that Lofthouse himself is originally from England and only moved to the US in 2010.
A server told him to leave, saying, "No, you do not talk to our guests like that. Get out of here."
Just over a week later, Lofthouse stepped down as CEO of Solid8. He confirmed to the San Francisco Chronicle that he’d left the company and severed his relationship with it as a result of the viral video.
“I will make it my duty to ensure my personal actions do not continue to have a detrimental impact on those people closest to me,” he said in a statement to the newspaper.
Rahul Yadav, Housing.com
Housing.com cofounder Rahul Yadav
In July 2015, Housing.com fired its young cofounder and CEO Rahul Yadav after a string of controversies.
In March, he got into a public spat with Shailendra Singh, managing director at Sequoia Capital India, after addressing him as “dude” in an email and asking him to "stop messing around". Yadav had accused Singh of trying to poach some of Housing.com’s employees.
Following rumours that the board was thinking of replacing him, Yadav sent a letter to his company’s board in which he wrote: "I don't think you guys are intellectually capable enough to have any sensible discussion anymore. This is something which I not just believe but can prove on your faces also!"
A few days later Yadav apologised for his “unacceptable comments”. The board accepted his apology, allowing him to continue as CEO.
Soon after, Yadav gifted all his shares in the company, worth about Rs 200 crore, to his employees, saying he was "too young to worry about money". He also challenged his critics, including Zomato’s Deepinder Goyal and Ola’s Bhavish Aggarwal, to follow his lead.
Garg was finally sacked after an email he sent to employees was leaked. In it, he wrote that “to have some fun”, he had given contradictory answers to various journalists who had called him to find out whether Housing.com was being taken over.
TOP STORIES BY OUR REPORTERS
Edtech set for (self) regulation
Top edtech startups such as Byju’s, Unacademy and upGrad, are joining forces to implement a self-regulatory code on how they do business in India. While their founders have discussed the regulatory landscape for the long-term in India in private, this is the first time they are working on it seriously, and with the knowledge of the government.
BigBasket tests grocery group buying in Tier-IV India
BigBasket has started testing a group buying model for delivering groceries in Tier IV towns, people briefed on the matter told us. The move comes amid growing competition in the category. Flipkart, Meesho, DealShare and Udaan have all been making aggressive moves in this space as they look to widen their customer base and cater to value-conscious users.
Tata Digital sets up financial marketplace entity
Tata Digital has set up a new financial marketplace entity called Tata Fintech to help the conglomerate compete with heavyweight rivals Amazon and Reliance.
The fintech vertical is a natural extension of the group’s broader ecommerce business, a source told us. “There are a lot of integrations being planned in terms of offering ‘buy now pay later’ solutions and other financing options,” the person said. “These are being worked out through the fintech unit.”
Exclusive: Thrasio to invest $500 million in India, says CEO
Thrasio CEO Carlos Cashman
Thrasio, the US company that pioneered the model of acquiring private brands on Amazon and scaling them, plans to invest $500 million in India, which it sees as an important market in the long term, CEO Carlos Cashman told ET in an exclusive interview.
Thrasio has made its first acquisition in India, that of consumer durables brand Lifelong. We had in October first reported that the company was in talks to acquire Lifelong.
Latest on startup IPOs
■ Delhivery’s Rs 7,460-crore IPO gets Sebi nod: This makes the Gurugram-based new-age logistics startup the first unicorn this year to have obtained the capital market regulator’s nod to list on domestic bourses. (read more)
■ Pine Labs to seek $500 million in US IPO: The fintech startup, which is expected to debut on the US exchanges later this year, may look to seek a valuation of $6-7 billion, sources said. (read more)
■ Pepperfry will be ready to file for IPO in six months: The online furniture retailer, which reported a 10% drop in revenue in FY21 due to the Covid-19 pandemic, has seen good recovery in sales and is expected to close the current fiscal with a 40-45% growth in revenue. (read more)
■ CEO Sharma says global market conditions impacted Paytm's IPO: Paytm went public at a time when the market was spooked by various factors, and that affected pricing, founder Vijay Shekhar Sharma said during an event—one of his first public appearances since his company's disastrous debut. (read more)
India's Big 4 IT firms post strong Q3 numbers
Marking an industry first, India's three largest IT services firms announced their December quarter results on the same day.
- Infosys outperformed peers TCS and Wipro in terms of sequential growth and said its revenue will grow by 19.5-20% in the fiscal ended March 31, buoyed by sustained expansion in global technology spending amid the ongoing pandemic.
Discounts dry up on Swiggy, Zomato as orders surge
Discounts have dried up on Swiggy and Zomato amid a steep surge in demand for food deliveries across states even as stringent curbs to contain the third wave of the Covid-19 pandemic have forced many restaurants to down shutters.
This latest round of restrictions comes after months of shutdown during the first and second waves, followed by operations being allowed at 50% capacity.
ETtech Deals Digest
Lead School turns unicorn after $100 million funding: The edtech startup has raised $100 million from investors led by GSV Ventures and WestBridge Capital, doubling its valuation in less than a year to $1.1 billion. (read more)
Curefoods gets $62 million funding for multi-brand play: The financing is likely to have valued Curefoods at about $280 million, a source familiar with the matter said. The company is in talks to raise another $50-75 million which may close in the next few months, as it looks to bolster its brand portfolio. (read more)
Refyne raises $82 million from Tiger Global, others: Founded by Chitresh Sharma and Apoorv Kumar, Refyne operates in a business-to-business-to-consumer model. It has partnered with 150 organisations, including Practo, TeamLease, Cars24 and Cafe Coffee Day, to give their employees an option to access their salaries before payday. (read more)
Also Read: Early-stage dealmaking hits a crescendo as investors flock to India
Tech hiring remains buoyant despite Omicron
Hiring in India’s tech sector remains buoyant, undeterred by the steep rise in Covid cases.
- In the first week of 2022, the sector put out more than 70,000 active job openings, according to data from LinkedIn put together for ET by staffing firm Xpheno.
Similarly, Indian unicorns—especially newly minted ones— are set to continue their hiring spree in 2022 as the third wave of Covid-19 is unlikely to affect their recruitment plans.
MeitY preparing cabinet note on Data Protection Bill
The Ministry of Electronics and IT is preparing a formal note for the Union Cabinet on the proposed Data Protection Bill, officials aware of the matter told us.
- “The cabinet will decide on the final provisions,” said a senior official, adding that MeitY will work on drafting the final language of the bill once it receives cabinet approval.
Online canvassing: More cons than pros?
The Election Commission’s mandate permitting virtual campaigning in the upcoming state elections opens up significant opportunities for social media platforms, according to political analysts who also fear that monitoring the heightened activity could pose a huge challenge for the polling authority.
While the EC’s move offers more voters a chance to interact with political leaders without risking their health amid a raging pandemic, privacy experts are questioning whether it can provide a level-playing field for all parties in a technology-led arena.
That’s all from us this week. Stay safe and get that jab.