NestAway Co-founder files FIR against investors and fellow founders
Bhubaneswar (The Uttam Hindu): The home rental platform NestAway is embroiled in a legal and financial controversy after its co-founder Amarendra Sahu filed an FIR against the company’s investors including Tiger Global, Goldman Sachs, Chiratae Ventures and fellow co-founders Jitendra Jagadev and Smruti Parida. This incident has thrown another domestic startup into turmoil shedding light on the deepening challenges within India’s startup ecosystem. Once valued at Rs 1,800 crore in 2020 NestAway was sold for a mere Rs 90 crore in cash despite raising Rs 700 crore in funding—marking a significant drop in its valuation. The company faced further strain during the pandemic when all co-founders except for Sahu parted ways leaving the business in a vulnerable state. Despite these setbacks the company managed to stay afloat by selling non-core assets and building cash reserves, ensuring two years of growth. However when offered a Rs 50 crore investment from Gruhas the investment arm of Nikhil Kamath existing investor Tiger Global allegedly pushed for a sale at Rs 129 crore causing an 80% loss on their Rs 700 crore investment. This decision raised concerns about the rationale behind such a steep discount particularly when fresh funding opportunities were on the table.
The sale of NestAway, which occurred at a price far below its potential, has led to accusations of investor conspiracy. There are allegations that the investors forced the sale despite the company’s positive cash flow and upcoming funding opportunities with minority shareholders likely to oppose such a massive loss. Further complicating matters Jitendra Jagadev a board member is accused of negotiating the deal on behalf of the buyer presenting a clear conflict of interest. After Sahu’s resignation in protest investors allegedly forged his signature to finalize the sale raising serious concerns about corporate governance. In addition to these claims investors transferred shares to the buyer before finalizing the share purchase agreement breaching both the SPA and shareholding terms. Goldman Sachs allegedly delayed Sahu’s payout by extending the SPA unilaterally. Even more troubling the company’s former CFO, Sandeep Daga, remains unpaid, despite the investors having received their dues over a year ago. With the Orissa High Court scheduled to review the case on January 9, the outcome of this legal battle could significantly impact the dynamics between investors and founders in India’s startup ecosystem.
