Without naming portfolio startups, Sequoia says will drive governance

While Sequoia Capital India did not name any startup individually, its comments come when at least three of its portfolio firms — BharatPe, Trell and Zilingo — have been hit with corporate governance issues, including potential instances of fraud.

BharatPe co-founder Ashneer Grover (File Photo)

Finally breaking its silence after some of its portfolio startups were caught in corporate governance issues, Sequoia Capital India has said that it would take “proactive steps” to drive corporate governance at startups it invests in and would ask for more disclosures and rigorously adopt internal audits and controls.

While Sequoia Capital India did not name any startup individually, its comments come when at least three of its portfolio firms — BharatPe, Trell and Zilingo — have been hit with corporate governance issues, including potential instances of fraud. “Recently some portfolio founders have been under investigation for potential fraudulent practices or poor governance. These allegations are deeply disturbing,” the venture fund said in a blog post without specifically naming any of the startups.

BharatPe’s co-founder Ashneer Grover has left the company after an investigation within the company allegedly found his wife Madhuri Jain and his relatives syphoned money from the firm. Live commerce firm Trell’s founders too have been accused of misappropriating the startup’s funds and misrepresenting its growth metrics. Singapore-based Zilingo has suspended its chief executive Ankiti Bose over accounting issues. Sequoia Capital India’s head Shailendra Singh has left Zilingo’s board post the allegations.

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The venture fund said it would place special emphasis on complaints raised by whistleblowers and would conduct governance training for founders and senior management, implement whistleblower policies, and focus on a more independent board representation, among other things. “When whistleblowers call us to report on issues, we always take them seriously. We know in some cases they may turn out to be baseless – but we still have to look into them as it is a board member’s fiduciary duty…We won’t hesitate to act to protect the interest of the company and employees, even if it costs us financially,” the investment firm said.

In 2021, it invested more than $4 billion in over 70 startups, including the likes of WakeFit and Nykaa-rival Purplle, among others. It is also an investor in both the top edtech firms in the country in Byju’s and Unacademy. The investment firm was also an early investor in Zomato which hit the bourses last year, and another of its portfolio companies, MobiKwik has filed its draft prospectus with market regulator Sebi for a Rs 1,900 crore initial public offering.

Soumyarendra Barik

Soumyarendra Barik is Special Correspondent with The Indian Express and reports on the intersection of technology, policy and society. With over five years of newsroom experience, he has reported on issues of gig workers’ rights, privacy, India’s prevalent digital divide and a range of other policy interventions that impact big tech companies. He once also tailed a food delivery worker for over 12 hours to quantify the amount of money they make, and the pain they go through while doing so. In his free time, he likes to nerd about watches, Formula 1 and football. ... Read More

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