DailyPost 2607
STARTUPS – DELIBERATE FINANCIAL MESS?
As in the case of cyclical AI, we are in the best inflection point the world has ever witnessed. It seems it is there to stay, to an extent that people have announced the next phase of industrial revolution as the AI age. In China there are 50 plus AI start-ups transforming their nation. With all the noise of Start-ups and they being the bandwagon to growth and that they would facilitate India’s entry into the super tech club, but it is difficult to decipher that sort of a trajectory, even if we try our best. The start-ups seem to hitting one bottleneck after the other.
The liberal funding of the Covid day seems to have evaporated. The birth of unicorns even on false valuation, does not seem to be happening now. The name of game was to exploit the ecosystem and the favorable business climate and make hay as long as the sun shines and lots have been successful in achieving it. Who was interested in organic growth, creating expertise and create companies, which have been built last? After all the is the bee all and end all of all businesses for generations has been the creation of enduring business entities. If all the corporate governance and financial dealings are put under scrutiny, a whole lot of start-ups would find themselves on the other side of law.
Crash commercialization in every aspect of their existence was the name of the game, even before the business could stand on its own feet and the brand could speak of itself with confidence. From serious accounts and audit issues to criminality emanating out of suspect financial transactions are aplenty. Take the case of BharatPe, siphoning off funds seems to pretty evident from EOW investigation. The company seems to be enmeshed in it and not one odd employees indulging in a malpractice. Recruitment firms linked BharatPe founder Ashneer Grover / family used backdated invoices to siphon off funds. They were paid for work they had never done for the fintech unicorn. Economic Offences Wing, EOW of the Delhi Police has come to this conclusion, based on documentary evidence.
What is even more intriguing is the fact that the probe agency could not trace many of the firms to which pay BharatPe had made vendor payments. Eight human resources (HR) firms hired by the company “shared the same registered address with the accused family members and relatives.”* Of the eight five submitted invoices mentioning account numbers that were not open at that time. This makes it crystal clear that the invoices at a later late. When fence starts eating the crop, what does the crop do? I just hope this is not the true manifestation of the start-up ecosystem as it exists today.
WHERE DID THE LIBERAL FUNDING FOR STARTUPS GO WRONG?
Sanjay Sahay
Have a nice evening.