One glorified startup in India’s sizzling e-commerce scene, Housing.com, is providing a much-needed reality check to the sector along with an unintended dose of mirth.
Earlier this week, the CEO of the SoftBank-backed startup, Rahul Yadav, resigned after a public statement to the board that, “I don’t think you guys are intellectually capable enough to have any sensible discussion anymore.” Sure enough, he backtracked a day later and announced in an email to co-workers that it was just another day at Housing. “I am still your CEO, have fun” he said and appended that with a smiley emoticon.
Housing.com is an innovative real estate portal that is in line to be India’s next $1 billion startup by valuation.
Several questions have come up after the incident pertaining to India’s startup ecosystem. Whether founders, the ones with bright ideas and no prior experience, are mature enough to handle the day-to-day pains of running a business is the topmost. With investors chasing promising startups and then demanding outcomes, whether inexperienced founders cut out for the long haul is another.
Yadav and his co-founders are from the country’s pedigreed engineering school chain, the Indian Institute of Technology. After a series of very public spats, reports suggest that financial decision making has been taken away from 26-year-old Yadav by Housing.com’s board of directors. SoftBank owns a third of the stake in Housing after pumping in $90 million last year and has a seat on the board.
Housing’s challenges began when Yadav’s email to Shailendra Singh, the head of VC firm Sequoia Capital in India -- in which he accused Singh of unethically poaching Housing.com employees and warned him to “stop messing around with me” -- went public on Quora. He then sparred with the influential media firm, the Times of India Group, accusing them in an internal email of targeting him to jack up the valuation of their own real estate portal, magicbricks.com. The Times of India Group said it would sue Housing.com for $16 million in damages.
Before that, Housing.com ran up a reported bill of over $4 million after a series of full-page newspaper ads and billboards with the tag line “Look Up”. The ads were criticized by some as a wasteful and failed exercise in branding.
In a completely unrelated incident, Housing.com had suffered a setback a few months ago when two of its employees died in a car crash. The startup is being sued for negligence as the car was being driven by another co-founder, Advitiya Sharma.
The unabated drama involving Housing.com have put not just the housing portal but India's entire horde of startups on investor watch.
