“He didn’t even spare his co-founder. Everyone saw her mental and physical ordeal on her last day in November 2021 at the Vikhroli office.”
“Wanting to prove himself like Elon Musk, X Founder buys 35% stake in a startup destined to become India’s Theranos.”
“The founder has sold all startup assets to a company owned by his relatives and friends.”
The combined public valuation of the three startups mentioned above is over $10 billion. These shocking revelations have reemerged in my inbox, marking the return of startup whistleblowers after a quiet few years. Once again, anonymous insiders are pulling the curtain on the dark corners of India’s startup scene, where the pressure to succeed justifies all means.
One claims a founder is artificially inflating revenue numbers and ruthlessly slashing jobs. Another accuses a unicorn founder of backing corrupt startups created by his ex-employees.
While I’m still bewildered by these accusations, their specificity suggests they’re not just baseless rants, but potentially true claims from insiders. These are supported by regulatory filings, public and private conversations, screenshots, etc. There are audio recordings, too.
A Second Coming?
A few years ago, Twitter (now X) was the battleground where handles like ‘Unicon Baba’ and ‘Corporate Kumar’ dropped bombshells about the dark underbelly of India’s startup scene. They gave us an unfiltered peek into the chaos behind the curtains – financial missteps, harassment, and the kind of corporate governance that would make any investor squirm. Despite their trolling and the toxicity they brought along, these whistleblowers highlighted genuine concerns that, sometimes, were alarmingly true.
Then suddenly, around the time COVID hit, most of these Twitter (now X) whistleblower accounts vanished. I still vividly remember how some of the revelations about BharatPe founder Ashneer Grover created a storm in the ecosystem.
Now, as we enter another funding freeze and navigate the uncertainties of AI, these new accounts offer a grim look at how some founders are playing fast and loose, not just with finances but with human dignity.
For many heavily funded startups, there’s a “valley of death” ahead. Their paths to profitability are now a wishful dream, and the monthly cash burns are reducing their chances of survival. Some founders are resorting to questionable tactics, including mass layoffs, siphoning off funds, and finding an escape for themselves.
A Lot Is At Stake
It seems employees are taking the reins into their own hands, bypassing manipulated Glassdoor reviews to share real stories of fraud and governance failures. But it’s not just their companies that pay the price – these claims send shockwaves through the entire ecosystem. Investors start pulling back, spooked by one bad apple and worried about the whole barrel. This means less money for all startups, not just the ones caught in the act, which can choke off innovation.
These scandals can also damage India’s reputation as a startup hub. And it’s not just about money and reputation. When startups cut corners, jobs are on the line. Talented folks might think twice about joining a startup, leading to a brain drain.
Why is this resurgence of whistleblowers important? Because startups have become adept at gaming systems, be it investor perceptions or employee reviews. However, as financial pressures mount, the veneer cracks and those inside the system are often the first to call it out.
As we sift through these allegations and stories, it’s crucial to remember these whistleblowers’ role in shaping India’s startup ecosystem. They are the necessary disruptors we need in order to face the uncomfortable truths about the startup darlings.
The return of whistleblowers is a healthy cleanse for an ecosystem fraught with unchecked ambitions.
Welcome back, whistleblowers. Let’s keep the truth coming.
(Pankaj Mishra has been a journalist for over two decades and is the co-founder of FactorDaily.)
Disclaimer: These are the personal opinions of the author