Sequoia Capital India addresses fraud allegations at some startups
Sequoia Capital India has reportedly acknowledged the fraud allegations charged against some of its portfolio startups and committed to taking bold steps to perform more to steer increased compliance.
In a statement, the venture fund stated that it is a work in progress. All players must collectively drive accountability and enhanced performance for the company to untap the complete potential offered by this region.
The statement served as the first official word of the storied venture fund, and it comes on the heels of investigations of three of its portfolio startups:
- Earlier this year, Ashneer Grover, the Former Chief Executive and Co-Founder of BharatPe resigned from the company valued at USD 2.8 billion after an investigation found that Mr. Grover and his wife siphoned money, a claim that has been refuted by Grover.
- Zilingo, the fashion marketplace, suspended its Founder and Chief Executive Ankiti Bose this month following an investigation over account discrepancies. Shailendra Singh, the Head of Sequoia Capital India, has resigned from the board.
- Trell, the live commerce startup, recently investigated allegations that its founders had siphoned money and lied about its growth metrics and usage.
Sequoia, which did not mention any startup by name, stated that it will work on the following things:
- Execution of whistleblower policies
- More autonomous board representation
- Governance training for senior management and founders
- Requesting for further disclosures and rigorous adoption of controls and internal audits
Although the post, written by the team at Sequoia, stated that investors may not perform sufficient due diligence, it also opined that there is hardly any business to diligence during seed investments or ones made later during the early stage. Even investors in the later stage can face negative consequences post the investment if there is illicit intent and fraud.
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