Controversies That Shook The Startup World

With growth comes change and with change comes a huge responsibility: the responsibility of building a reputation and keeping it clean and untarnished. Like with everything in the world, the startup life is no different. As people keep having new ideas and new thoughts, it seems but natural to have things go more wrong than right. With the increase in the number of startups, the number of people fighting for the same positions also increase. As things progress at an alarmingly fast pace, it comes as no surprise that there are more controversies than positive things in the startup world. To prove just this point, here is looking at some of the highly talked about controversies of the past couple of years.

1. Snapdeal Flipkart Merge Disaster 

Quite possibly one of the most talked about controversy, the Snapdeal Flipkart merger failure was in the headlines for all the wrong reasons. Back in the year 2016, Snapdeal was one of the Indian startups with a really high valuation ($ 6.5 billion.) However, despite reaching the pinnacle of success, the company did not have the capacity to sustain at that level for much longer. With Snapdeal struggling to make its relevance felt, SoftBank proposed a merger between the homegrown e commerce platform, Flipkart. What made this deal hit the headlines was several rumours floating around about Snapdeal firing employees. Furthermore, the Snapdeal founders made multiple public statements about their disapproval of the merger.

Post the breakdown of merger talks, on August 1, it was reported the Kunal Bahl and Rohit Bansal-founded startup was gearing up to dismiss close to 80% of its employees. Durimg the second week of the same month, former and current employees of Snapdeal anonymously sent the founders a letter, addressing it to the PMO, accusing the company of not letting the merger go through for ‘personal motives. With all this going on, Flipkart saw no option but to back off, leaving Snapdeal all by itself in the dust.

2. Ola and Uber sue each other 

The March of 2016 was an interesting year, atleast in relationship to Ola and Uber. The two rivals had just entered the big leagues in the cab sector, with each at the other’s throat for the first place. Uber started off the feud by suing Ola. According to Uber, Ola was using fake accounts and booking rides on Uber, with the sole aim of cancelling them once booked. According to reports, Ola created over 94,000 fake accounts and booked over 4 lakh rides. Not only did this disrupt Uber’s business, it also prevented genuine riders the chance of getting a cab.  Ola replied to Uber’s petition saying the lawsuit was filed in an attempt to bypass the laws of the land by foreign companies who run their operations in this country for profit without due regard for the applicable laws.  Uber retorted though they are established in San Francisco, they have a hyperlocal team solving problems that are locally relevant. “Like our competitors, we received most of our funding from ‘foreign’ investors,” Uber said in response to the accusation! As bystanders, this war was entertaining as hell, with the only drawback being that I did not really get cabs on time!

3. PayTm accused for propagating a political agenda 

When Prime Minister Narendra Modi announced demonetization and the absence of Rs. 500 and Rs. 1000 currency notes, PayTm put out a full page advertisement. The ad thanked Mr. Modi with a message saying the Prime Minister had finally taken a decision in favour of the growth of the country. Post the advert and the announcement, PayTm’s revenue saw a growth of 200% in terms of revenue, with more than triple the number of app downloads. Fintech in India responded strongly to this move, questioning the ethics and moral conduct, with PayTm’s every move put under scrutiny! What made the entire issue all the more controversial was Arvind Kejriwal’s comment about how the country was moving towards the Dark Side of Digitisation. After a lot of frenzy on Twitter and other social media platforms, the issue only quieted down when Vijay Shekhar Sharma (PayTm CEO) put out a public statement saying it was not only PayTm benefiting through the move but the entire country as well! Who knew free speech was only a law in the Constitution and not a civil right?

4. The Qarth and Ola misrepresentation scandal! 

Qarth Technologies, founded by Perit Shrivastava and Aditya Shrivastava, skyrocketed into the headlines for stealing identities through a self developed “Aadhaar e KYC verification” mobile app. While this in itself was a scandal, what made the entire affair all the more interesting was Ola’s involvement in the issue. Founded in the year 2012, Qarth was bought over by the home grown cab aggregator, Ola, in an attempt to increase the efficiency of its mobile wallet.

The moment Qarth’s illegal activities hit the headlines, Ola promptly denied any involvement in the matter, stating they had no hand to play in Qarth’s criminal activities. However, despite the government’s stringent search into Ola’s history with Qarth, no direct link could be found between the two companies and Qarth was left to pick up the pieces on its own.

The startup world is exciting, motivating and invigorating. With growth comes great responsibilities and great expectations. However, when these cannot be met, things fall apart, resulting in chaos. If you think we missed out on some truly shocking controversies in the startup world, feel free to comment and let us know!