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All eyes are on the startup ecosystem in India, as it is one of the fastest-growing markets in the world. The first half of 2016 had many incidents that shook the industry. Here are some

 

All publicity is good publicity — even if it’s negative. It seems this notion has gripped the startup industry in India as well.

These days startups don’t mind picking fights with their competitors or hurling abuse against rivals, just to stay in the media glare. The media also falls into this trap, intentionally or unintentionally, because they know negative stories get more attention than a simple product launch or fund-raising article.

Just half-way through 2016, the Indian startup industry has received more attention than what it had achieved in the whole of last year. Ola, Uber, Housing, Grofers, Foodpanda and Zomato — all had their share of negative coverage in the first half of the current year, while some others like Byju’s etc shot to fame with large fundraising stories.

Here we list 10 startup-related incidents in India that dominated the Indian newsroom in 2016:

Ola’s continuous war with Uber

Home-grown major Ola has been fighting an intense battle with Uber ever since its expansion into India. The companies together command the largest chunk of the market, so it is quite natural to pick fights with each other to show their might.

In March this year, Uber filed a lawsuit with the Delhi High Court against Ola over allegations of using dirty tactics to hurt its business. Uber accused Ola of creating 93,000 fake accounts to book rides and then cancel them. Uber claimed over 400,000 bookings were made and cancelled by Ola employees across the country, with about 50,000 such incidents in Delhi alone from last August till March.

This angered Ola, which sought every available opportunity to drag Uber into the court. In July, when Uber launched bike-taxi services in Bangalore, Ola cried foul saying it was illegal to operate bike taxi in the city. Eventually Uber had to withdraw.

Then came the ‘nationality’ debate. In Uber’s view, Ola is not an Indian company as a majority of its shareholders are foreign. This angered Ola and its COO Pranay Jivrajka said that “it was a shame that its competition had to fan a debate of nationalism to hide their identity of being a multi-national, with serial violations of law as a business strategy, not just in India, but globally.”

PepperTap’s untimely death

 

PepperTap is a classic example of a company’s ‘fall from grace’. None of PepperTap’s stakeholders, or even naysayers, would have predicted a sad demise for this two-year-old startup, which counted among its backers biggies such as SAIF Partners, Sequoia Capital and Snapdeal.

Also Read: 5 high-profile Indian startups that kicked the bucket in 2016

Founded by Navneet Singh and Milind Sharma, this hyperlocal startup raised a total of US$50 million across three rounds, with the first round of US$10 million coming in April 2015. The second round of financing of US$36 million came in September last year. On the way, it became the third most-heavily funded grocery delivery company after BigBasket and Grofers in India.

The funding helped it go all over the country. From just one city in 2014, it grew to almost 17 by October 2015. At its peak, the company acquired Bangalore-based grocery delivery startup Jiffstore for an undisclosed sum when it was in talks to raise another US$11 million. As per reports, PepperTap averaged 20,000 orders delivered daily. It was improving sales by an average of 30-40 per cent and with its mobile-first approach, geographic expansion was fairly easy for the startup.

All of the sudden, the company took a downward trend. It scaled down as fast as it scaled up to the peak. The huge pessimistic funding environment globally and huge customer acquisition cost it dearly.

Jugnoo drags Ola into the court

This was yet another high-profile fight in the cab-booking industry. Less than 48 hours after Uber filed a lawsuit with the Delhi High Court against Ola in March, Chandigarh-based auto rickshaw aggregator Jugnoo threatened to take legal action against Ola for “employing unethical practices to sabotage their business”. Jugnoo accused Ola of employing unethical practices to sabotage its business and aggravate the drivers who are trying to earn a decent living by plying auto rickshaws.

Jugnoo said Ola employees had created fake accounts to book and make cancellations on Jugnoo’s app, leading not only to the loss of revenue but affecting the auto-rickshaw drivers’ income and bonus on a daily basis.

According to Jugnoo, about 20,000 cancellations through 800 fake accounts had been reported to occur during this period. These accounts were being used to book a Jugnoo ride and then cancel it after some time, sometimes switching off the phone after booking the ride. This was keeping the drivers engaged unnecessarily, wasting their time and not letting the genuine customers book their ride, eventually causing a massive driver grievance.

Flipkart devaluation

This came as a shocker to the startup industry in India. At a time when the industry is staring at an e-commerce bubble burst, a leading mutual fund marked down e-commerce giant Flipkart’s valuation.

The cut-down came in February this year. A mutual fund operated by Morgan Stanley marked down Flipkart’s valuation by 27 per cent, as global investors believed the firm was overvalued. As a result, the company’s valuation came down to US$11 billion from US$15.2 billion.

Started in 2008, Flipkart is the largest e-commerce company, which mainly competes with Snapdeal, Amazon and Paytm. The Bangalore-headquartered firm has raised over US$3 billion in investment through multiple rounds from domestic as well as international investors, including Tiger Global Management, Naspers, GIC, DST Global and Accel Partners.

Foodpanda boy seeks sex from woman customer

Last year, there were several allegations of cab drivers sexually harassing women passengers on board. The most shocking among was that of a woman who alleged that a driver contracted to Ola’s subsidiary TaxiForSure masturbated when she was onboard.

Also Read: From masturbation to threats, cabbies in India drive Ola and Uber crazy

The latest incident happened in the food-tech space. A Foodpanda delivery boy was arrested in Bangalore for allegedly seeking sex from a woman over the phone. This was apparently done to teach the customer a lesson for refusing the delivery. The delivery boy later shared her number in a WhatsApp group that resulted in her receiving hundreds of calls overnight from different people.

Foodpanda, however,  denied that its staff was involved in the scandal, saying the delivery was fulfilled by a third-party. This incident has, however, seriously damaged Foodpanda’s reputation at a time when it is working hard to rebuild its lost image following several news reports that said the company was facing corporate governance issues and employed unethical practices.

The post Fightings, shut-downs and scandals— these startups-related incidents dominated Indian newsrooms in first half of 2016 appeared first on e27.

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