The Indian startup world is witnessing a fresh controversy after Amrendra Sahu, the co-founder of home rental platform Nestaway, filed an FIR against the company’s investors, including Tiger Global, Goldman Sachs, Chiratae Ventures, and co-founders Jitendra Jagadev and Smriti Parida. The case has shed light on disturbing financial and governance issues, including the dramatic decline of Nestaway’s valuation from Rs 1,800 crore to Rs 90 crore.
From Rs 1800 Crore To Rs 90 Crore
In 2020, Nestaway was valued at Rs 1,800 crore and had raised Rs 700 crore in funding. However, the company was sold for a meager Rs 90 crore, a significant loss for investors. The pandemic-induced challenges saw the exit of all co-founders except Sahu, but Nestaway survived by selling non-core assets and securing cash reserves. Despite a Rs 50 crore investment offer from Gruhas, Tiger Global allegedly pushed for a distress sale, resulting in an 80% loss.
Investor Actions and Allegations of Conspiracy
The forced sale has sparked allegations of conspiracy, with minority shareholders questioning the reasoning behind the drastic valuation cut. Jitendra Jagadev, a board member with access to sensitive information, is accused of negotiating the deal, creating a potential conflict of interest ignored by the investors.
Forgery and Governance Failures
Post-Sahu’s resignation, investors allegedly forged his signature to finalize the sale, violating the Share Purchase Agreement (SPA) and shareholder agreements. Goldman Sachs also delayed payments to Sahu and left the former CFO, Sandeep Daga, without his dues.
Legal Battle and Implications
The case has now gone to court, with the Odisha High Court scheduled to review the matter on January 9. The case could set a precedent for corporate governance and investor-founder dynamics in India’s startup ecosystem, highlighting the importance of transparency and ethical practices in business transactions.
