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Mayhem at Arthmate after Vihaan Kumarโ€™s arrest: COO Renu Satti resigns, employees exodus, and more

EntrackrEntrackr ยท 10m ago
Mayhem at Arthmate after Vihaan Kumarโ€™s arrest: COO Renu Satti resigns, employees exodus, and more
Medial

A nearly two-year-long legal tussle with Gameskraft has pushed SaaS-based lending enabler Arthmate into utter chaos, including the arrest of its co-founder and former chief executive officer CEO, a top executiveโ€™s resignation, and employee exodus. Gameskraft co-founder and chief executive officer Ramesh Prabhu lodged a complaint with Gurugram Police (Sector 29) on September 2022, which led to an FIR being registered in March 2023, accusing Arthmate co-founder and former chief executive Vihaan Kumar of financial irregularities and fraudulent activities. 15 months after the FIR, Kumar was arrested by the police and Economic Offences Wing (EoW) on June 10, 2024, according to a court order accessed and reviewed by Entrackr. For the uninitiated, Gameskraft is one of the top profit generating startups from India which reported Rs 1,062 crore profit in FY23 with Rs 2,662 crore revenue. Arthmate is a digital lending platform that deploys credit services across fintechs and SME sectors. The firm recorded Rs 132 crore of revenue with profits of Rs 5.5 crore in FY23. โ€œVihaanโ€™s arrest created a stir at the Gurguram-based firm which saw an exodus of employees including its chief operating officer Renu Satti,โ€ said one of the sources requesting anonymity. Satti, former Paytm Payment Banks CEO, joined the company in February this year. While her LinkedIn profile still shows her as COO at Arthmate Finance, sources confirm that she has resigned (after Vihaanโ€™s arrest). Responding to Entrackr queries, an Arthmate spokesperson said that Kumar has no association with the company. โ€œAs the matter is sub-judice, we cannot comment on it at the moment,โ€ said a Gameskraft spokesperson. Queries sent to Satti on Monday over WhatsApp did not elicit any response. We will update the story in case they respond. The heart of the matter Now coming back to charges leveled by Gameskraftโ€™s Prabhu against Vihaan Kumar: Kumar entered into Gameskraft with the promise of making investments in the company, but slowly gained the confidence of the board intending to control its operations, as per the court order. Vihaan suggested restructuring the board of directors under his so-called investment strategy and also positioned his people as the key members of the Gameskraft board. He also apparently started representing himself as a founder and investor of Gameskraft, holding meetings with third parties, including consulting firms like E&Y and PWC, and government officials, the court order added. Vihaan introduced service providers and contractors like Fly Tech, Ginni Tech, Skytech, Synx, and others to GamesKraft without the consent of the original promoters, said the court order. These firms allegedly burdened Gameskraft with financial losses due to undelivered or over-invoiced services, as per the FIR details. Kumarโ€™s actions had caused a financial loss of approximately Rs 12.15 crore to Gameskraft, including unpaid GST amounts that had already been remitted to the fraudulent service providers. Based on these allegations, the Gurugram police filed an FIR for criminal breach of trust, cheating, forgery, using forged documents, and criminal conspiracy. Vihaan Kumar allegedly used entities including Arthmate Tech P2P Financial Private Limited and Clear Though Advisors for alleged forgery, as per the court order. His close aides Vijay Kumar Dhanuka and Hitesh Bhansali represented Vihaan at Gameskraft. Dhanuka is head of operation and treasury at Arthmate for four years whereas Bhansali worked with the company as its grievance and nodal officer. Kumar also served as a co-Founder at Arthmate Finance, according to sources, but Entrackr could not verify this independently. No relief for Kumar, for now Vihaan Kumar was arrested on June 10, 2024, at his office premises in Gurugram. However, Kumarโ€™s counsel contested that his arrest was illegal and challenged it in the Chandigarh High Court. The court, however, declined to offer any relief and rejected his claims on August 30, 2024. Kumar continues to be in prison until the court grants him a bail. The incident places the spotlight yet again on the impact the actions of a few can have on a firm. In Arthmateโ€™s case, significant size and profitability has not been enough to shrug off the issues created by Kumar, indicating an outsized influence on the firm, for all their protestations to the contrary. A broader employee exodus in particular looks bad, indicating a deeper rot than just an aberration at the top. If the company does manage to arrest and slide and get back on track, one suspects it will still have to contend with the Kumar issue.

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Funding and acquisitions in Indian startup this week [02 - 07 Sep]

EntrackrEntrackr ยท 9m ago
Funding and acquisitions in Indian startup this week [02 - 07 Sep]
Medial

During the week, 26 Indian startups raised around $421.29 million in funding. These deals count 4 growth-stage deals and 16 early-stage deals while 6 startups kept their transaction details undisclosed. During the previous week, 31 early and growth-stage startups cumulatively raised $490.32 million in funding. [Growth-stage deals] Among the growth-stage deals, 4 startups raised $385.61 million in funding this week. Ride-hailing app Rapido spearheaded with a $200 million worth unicorn round. Cross-border trade fintech firm Drip Capital raised $113 million followed by D2C jewellery retailer Bluestone and food delivery and grocery platform Swiggy with $72 million and $0.61 million in funding, respectively. Two growth-stage startups that did not disclose the transaction details are Xolopak and Plan B. [Early-stage deals] Further, 16 early-stage startups secured funding worth $35.68 million during the week. Proptech startup Justo Realfintech led the list followed by D2C retail brand Nutrabay, a platform for booking hostel accommodations The Hosteller, chemical recycling and sustainability startup RecommerceX, and fabless semiconductor design startup BigEndian among others. As many as 4 startups that did not disclose the funding amount raised are; Nautical Wings Aerospace, ReCircle, 0xPPL, and Carrum. For more information, visit TheKredible. [City and segment-wise deals] In terms of the city-wise number of funding deals, Bengaluru-based startups led with 10 deals followed by Mumbai, Delhi-NCR, Chandigarh, Hyderabad, Pune, and Raisen. Segment-wise, E-commerce startups are on the top spot with 6 deals. Cleantech, Fintech, PropTech, SaaS, Automotive Tech, and Aviation startups followed this list among others. [Series-wise deals] During the week, Seed funding deals are on top with 11 deals followed by 5 Series A, 2 pre-Series A, 2 pre-Seed, and 1 Series E deal and more. [Week-on-week funding trend] On a weekly basis, startup funding slipped 14% to $421.29 million as compared to around $490.32 million raised during the previous week. The average funding in the last eight weeks stands at around $332.75 million with 27 deals per week. [Fund launches] VentureSoul Partners has successfully raised Rs 146.5 crore for its debut fund, targeting a total corpus of Rs 600 crore. Additionally, the Indian government has introduced a new fund called AgriSure, which is dedicated to supporting agritech startups with a financial commitment of Rs 750 crore. [Key hirings and departures] Mohit Rajani, formerly with Meta, has joined Meesho as a CPO. Freshworks onboarded former ServiceNow executive Murali Swaminathan as CTO, CoinDCX appointed Prashant Verma as chief growth and marketing officer, Wellbeing Nutrition onboarded Harleen Bhatti as the head of growth, and Nykaa (Kay Beauty) hired Sukhleen Aneja as SVP and Business Head. Meanwhile, Adda247โ€™s Co-founder Chandan Singh and CaratLaneโ€™s MD and CEO Avnish Anand resigned from their respective companies. [Mergers and Acquisitions] Hearing care provider Hearzap has acquired Speech and Hearing Care to expand its market share in Bihar and Jharkhand, while Yatra has acquired Globe Travels to strengthen its position in the corporate travel sector and increase its customer base. [Layoffs] Airmeet, a virtual event startup, laid off around 80% (30 employees) of its tech team and some employees from its product and design teams. Dozee, a healthtech startup, also laid off around 40-50 employees from its on-field, customer success, sales, and marketing teams. Visit TheKredible to see series-wise deals along with amount breakup, complete details of fund launches, and more insights. [New launches and partnerships] Fampay launches UPI app Namaspay for foreign travelers in India Ola Electric to bring three-wheeler to market soon Zepto to launch Buy Now Pay Later service: Zepto Postpaid Mygate launches smart door locks; enters consumer electronics EaseMyTrip ventures into electric bus manufacturing Swiggy follows Zomato, pilots large order fleet in Delhi-NCR Infibeam Avenues launches CCAvenue SoundBox Max [Potential Deals] SarvaGram to raise $50 Mn from Peak XV, others B2B digital lending startup Mintifi in talks to raise $100 Mn Moneyview raising $30 Mn debt via private placement [Financial results this week] Starbucks India posts Rs 1,218 Cr revenue in FY24; losses surge 3.2X BigBasketโ€™s revenue crosses Rs 10,000 Cr in FY24 Porter scales up 56% to Rs 2,734 Cr in FY24; losses dip 45% Swiggy reports Rs 11,247 Cr revenue in FY24; cuts losses by 44% [News flash this week] Mayhem at Arthmate after Vihaan Kumarโ€™s arrest: COO resigns, employees exodus, and more GST Council may impose 18% GST on PAs for Small Transactions Byjuโ€™s auditor resigns over lack of transparency; founder cries foul CLSA raises Zomato price target to Rs 353 post Paytm deal Nykaa accuses former CEO Asthana of breach of confidentiality, misappropriation B2B unicorn OfBusiness eyes IPO in the second half of 2025 Coworking Space Provider IndiQube Plans IPO: Report Zepto eyes $450 Mn IPO by August 2025, initiates talks with bankers Ather Energy targets Rs 4,500 Cr IPO, to file DRHP next week: Report InMobiโ€™s Roposo shifts to the social commerce model PharmEasy valuation slashed to $458 Mn by Janus Henderson Logistics firm Delhivery receives GST demand notice GST troubles continue for Zomato; receives another demand notice PayGlocal gets RBI payment aggregator license [Conclusion] The weekly funding shrank around 14% to $421.29 million this week. Meanwhile, two startup-focused funds launched this week namely AgriSure and VentureSoul Partners. Arthmate, a lending enabler, has been embroiled in a legal dispute with Gameskraft, leading to the arrest of its co-founder and former CEO, Vihaan Kumar. Gameskraft accused Kumar of financial irregularities and fraudulent activities, resulting in an FIR and subsequent arrest. The legal battle has caused significant disruption within Arthmate, with employee departures and a decline in company morale. Kumarโ€™s actions, including alleged forgery and financial losses to Gameskraft, have raised serious concerns about his conduct and the impact it has had on the company. The GST Council is considering imposing an 18% GST on payment aggregators for small-value digital transactions. This move could increase costs for merchants and customers, while also impacting the profitability of fintech startups. The proposed levy could hinder the adoption of digital payments and create a more competitive landscape for payment aggregators. It is essential for the GST Council to carefully evaluate the potential consequences before making a final decision. OfBusiness, a B2B marketplace unicorn, is close to finalizing bankers for its $1 billion IPO in the second half of 2025. Meanwhile, IndiQube, a coworking space provider, is also in talks with merchant bankers to file its DRHP within the next three months. IndiQube aims to raise between $120 and $180 million through its IPO, primarily through a fresh issuance of shares.

Eternalโ€™s Food Delivery COO Rinshul Chandra resigns

EntrackrEntrackr ยท 2m ago
Eternalโ€™s Food Delivery COO Rinshul Chandra resigns
Medial

Eternalโ€™s Food Delivery COO Rinshul Chandra resigns Eternal Limited (Zomato) has announced the resignation of Rinshul Chandra, Chief Operating Officer of its Food Ordering and Delivery business. Chandra, a key member of the companyโ€™s senior management, tendered his resignation on April 5 and will officially step down on April 7. According to the companyโ€™s filing with stock exchanges, Chandra is stepping down to pursue new opportunities and passions aligned with his evolving personal and professional goalsโ€‹. Chandra joined Zomato (now Eternal) in 2018 as Assistant Vice President of Product and steadily rose through the ranks, serving as Vice President, Head of Business, and eventually taking on the role of Chief Operating Officer for the food delivery segment. Eternal Limited has not yet announced a replacement for Chandra. The development comes shortly after mass layoffs at Zomato. According to media reports, the company let go of around 600 customer support associates within a year of hiring them. Over the past year, Zomato has seen several key departures. Hemal Jain, who served as Global Head of Finance and CFO of Hyperpure, stepped down. Akriti Chopra, the companyโ€™s co-founder and Chief People Officer, also left. In October last year, Gunjan Soni resigned from her position as an Independent Director. Zomato recently rebranded itself to Eternal, which will comprise four major businesses: Zomato, Blinkit, District, and Hyperpure.

Indian startups raise $1 Bn in July: Report

EntrackrEntrackr ยท 11m ago
Indian startups raise $1 Bn in July: Report
Medial

After closing the first half year on a promising note, Indian startups managed to cross the $1 billion monthly funding run rate in July too. Startups are also anticipating favorable market conditions with many set for their stock market debut in early August, be it Ola Electric or Infra.Market later in the year. Meanwhile, the Indian government has abolished angel tax which is seen as a positive for the entire ecosystem. As per data compiled by TheKredible, Indian startups raised over $1.03 billion across 126 deals in July. This consisted of 28 growth stage deals amounting to $725 million and 72 early stage deals worth $311.83 million. Meanwhile, there were 26 undisclosed transactions mainly in early-stage deals. [Y-o-Y and M-o-M trend] While the last month saw a sharp decline in funding from $1.93 billion in June, this is the highest funding for July in the past three years. The sudden jump in June was steered by Zeptoโ€™s $665 million megaround followed by Flipkart, PharmEasy and Lenskart. Indian startups have raked in $8 billion in the first seven months of 2024. If the trend continues, the overall funding is comfortably expected to cross the $11 billion milestone of 2023. To recall, Indian startups saw $38 billion and $25 billion funding in 2021 and 2022, respectively. [Top 10 growth stage deals] There were two $100 million plus deals in July with Purplle and Rapido raising $120 million each. Bike taxi firm Rapido also turned unicorn and became the third company to enter the billion dollar valuation club in 2024 so far. Hospitality firm Oyoโ€™s $50 million came in third position followed by home service marketplace Urban Company, fintech company Navi, electric vehicle firm Matter, and wealthtech startup Dezerv, among others. Itโ€™s worth highlighting that Oyo saw a major haircut in its valuation while Urban Company raised the amount in secondary and Navi raised the sum in debt. [Top 10 early stage deals] As many as 72 early-stage startups raised $311.83 million funding last month. Manufacturer of high precision tooling for aero-engines and airframes, Unimech Aerospace led the list with a $30 million fundraise followed by renewable energy services company BluPine, electric vehicle and clean energy startup Simple Energy, gen-Z focused fast fashion D2C brand Newme, and wealthtech startup Stable Money which pocketed $28.8 million, $20 million, $18 million, and $15 million, respectively. Further, artificial intelligence startup UptimeAI, biotech firm Immuneel Therapeutics, community-led mobility app Namma Yatri, wedding service provider Meragi, and NBFC Seeds Fincap also raised funding among others. The list of early-stage startups also includes 26 startups that did not disclose their funding amount. For more information, visit here. [Mergers and Acquisitions] The month witnessed 17 acquisition deals. Gaming company Nazara Technologies acquired an additional 48.42% stake in Paper Boat Apps (PBA) from its promoters Anupam and Anshu Dhanuka for a sum of Rs 300 crore while its gaming arm Next Wave Multimedia acquired the intellectual property rights of Ultimate Teen Patti from Games24X7 for Rs 10 crore. The list further counts acquisition of Excelmax Technologies by IT giant Accenture, OneCare by Acko, Ekagrata by Adda247, Koral by Captain Fresh, Centcart by CASHe, BitOasis by CoinDCX, Galleri5 by Collective Artists Network, SiliConch Systems by L&T, and Munitalks by Melooha, among others. [City and segment-wise deals] City-wise, Bengaluru-based startups maintained the top position with 42 deals, contributing around 37% of the overall funding in July. Delhi-NCR and Mumbai followed with 33 and 24 deals, respectively. The list further counts Ahmedabad, Hyderabad, Jaipur, Chennai, Pune, and Kolkata, among others. Segment-wise, fintech startups led the show followed by e-commerce (including D2C brands) and SaaS with 15 and 10 deals, respectively. Healthtech, AI, and Agritech were next on the list. Visit TheKredible for more details. [Stage-wise deals] Series-wise, equivalent to 36 startups raised funding in the seed round followed by 27 Series A, 15 pre-Series A, 13 pre-Seed, and 4 Angel funding deals. Debt-only funding contributed $160.76 million or 15.5% of the overall venture funding across deals. [ESOP buyback] Adda247 and Swiggy announced ESOP buyback programs this month. Edtech platform Adda247 has initiated its first-ever ESOP buyback benefiting over 130 employees, following its acquisition of Ekagrata Eduserv. Meanwhile, food delivery giant Swiggy has rolled out its fifth ESOP liquidity program worth $65 million, providing an opportunity for employees to monetize their equity. These moves highlight the growing trend of startups rewarding employees through ESOP buybacks. [Layoffs, shutdowns and departures] Edtech major Unacademy laid off 250 employees as part of its cost-cutting measures. Similarly, agriculture supply chain firm Waycool underwent its third round of layoffs, affecting over 200 employees. In the content creation space, Pocket FM laid off nearly 200 contract writers based in the US. The startup ecosystem also saw three shutdowns. Vernacular microblogging platform Koo has ceased operations after failing to secure a buyer or sufficient funding. Apollo Tyres has also reportedly discontinued its doorstep car service, Trumigo, due to a lack of traction. In the edtech space, Bluelearn has shut down and will return a significant portion of its raised capital to investors. Edtech major Unacademy has seen the departure of its COO for offline centers, Jagnoor Singh. Similarly, Simplilearnโ€™s Chief Product Officer, Anand Narayanan, stepped down after an eight-year tenure. Zoomcarโ€™s global president has resigned amidst company restructuring while Medikabazaarโ€™s co-founder Vivek Tiwari stepped down as CEO. Eight Roads Venturesโ€™ Asia managing partner Raj Dugar also stepped down after 17 years with the investor, as per media reports. Visit TheKredible to see series-wise deals along with amount breakup, complete details of fund launches, and more insights. [Trends] Itโ€™s raining startup IPOs: This year quite a few internet companies such as TBO tech, Digit Insurance, Awfis and Ixigo have got listed on the Indian stock exchange, with all delivering spectacular returns post listing as well. Three more companies including Ola Electric, FirstCry and Unicommerce are all set to make their stock market debut. Moreover, Mobikwik, Swiggy and Avanse have been waiting for approval from the market regulator. Wealthtech on the rise: A clutch of wealthtech startups have managed to score decent funding in the ongoing calendar year. In July, Deserv and Stable Money raked in $32 million and $15 million respectively. As per reports, more wealthtech startups are on the verge of raising new rounds. Geographic expansion: Traditionally dominated by metros like Bengaluru, Delhi-NCR, and Mumbai, the landscape is now witnessing a surge in entrepreneurial activity from smaller cities. Startups hailing from Ankleshwar, Bareilly, Bicholim, Nashik, Rupnagar, and Udaipur have recently secured funding, underscoring the growing potential of these regions. Family offices spreading out: Wealthy families are diversifying their portfolios. Traditionally focused on real estate and fixed deposits, theyโ€™re now actively seeking new investment avenues. This shift has led to the creation of separate investment pools and a growing interest in equity markets. In the past month, seven family offices participated in funding rounds. These include the family offices of Sunil Singhania, Jyothi Pradhan (CEO of Kurlon), MS Dhoni, Dr. A Velumani, Vasavi Family Office, Desai Family Office, and a Tamil Nadu-based family office. [Conclusion] As we had predicted in 2023, and earlier this year, the markets are expected to pick up by H2 this year, and here we are. Perhaps the last piece in the puzzle would be an interest rate cut by the Fed, to catalyse a whole chain of events that could lead to a mini-boom yet again. While expecting the highs of 2021 might be too much to hope for ($38 billion), it is not unreasonable to expect the Indian market to attract at least $15 billion in funding in 2025. The strong record of IPOs that is building up will not hurt investor confidence at all. The only thing to watch out for might be a rotation from Fintech and E-commerce to newer and important segments like Healthcare and Climate tech. Both are areas where India has large domestic markets, multiple use cases, and the crying need for solutions that can make a difference. With the kind of huge targets the country has in front, and massive schemes to get close, expect some large deals in the renewables space soon.

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