After an email he sent to staff members was compromised, Yadav was finally fired. He said in it that he had sent inconsistent responses to different journalists “to have some fun.”The managing director of the largest venture capital firm in the nation, Sequoia Capital, Shailendra Singh, had received an angry and threatening email from Yadav. Yadav, an IIT Bombay dropout who showed no interest in formal education yet was able to teach himself even the most difficult courses, was regarded as a child prodigy.
Rahul Yadav’s life has been a rollercoaster: from being hailed as a kid prodigy to leaving IIT Bombay, transitioning to entrepreneurship, becoming fired, to currently being accused of roughly Rs 280 crore in fraud. An investor in Rahul’s other firm wants to know how he burned through crores of money at Housing.com, the real estate search portal’s co-founder and previous CEO, which was fired in 2015 amid a lot of turmoil.
Several years ago, Yadav reportedly declared, “But now, I will not do such a thing. I will not argue with investors if I start a company once more. You must communicate any issues if there are any. In the event that nothing else works, you part ways peacefully. I will now make a seamless transfer.
But right now, it looks like history is repeating itself.
Charges Leveled Against Rahul Yadav
His investor’s forensic audit of his startup, which looked into financial transactions and related-party activities, may be a sign that he smells trouble in the books. According to rumors, Yadav spends money on pleasures while failing to pay his employees. He reportedly led a lavish lifestyle, including renting a boardroom at the Taj Land’s End for Rs 80,000 per day and driving a Mercedes-Maybach. In less than 18 months, his firm lost more than Rs 276 crore, and more than 150 employees have not received pay since November of last year.
Consumer Internet business InfoEdge has launched a forensic investigation of Rahul Yadav’s 4B Networks due to the company’s failure to provide the investor with information regarding financial transactions and related party activities. InfoEdge disclosed that it hired Deloitte to perform a forensic audit of the property-tech business in a stock exchange filing. In the December 2022 quarter, Info Edge wrote down its Rs 276 crore equity investment in 4B Networks due to “excessive cash burn, ongoing liquidity issues, and significant uncertainty regarding funding options.”
Beginnings Of The Prodigy
Although Yadav, an IIT Bombay dropout, showed little interest in formal schooling, he was regarded as a child genius who could teach himself even the most difficult topics. Yadav, who is from a tiny town in Rajasthan, planned his first business endeavor with a few of his fellow classmates in a dorm room. Although the hostels at IIT are recognized for being the birthplace of brilliant ideas that subsequently become reality, Yadav was so committed to his idea that he left the institute before earning his degree.
Yadav and his friends struggled to find housing in Mumbai, which gave rise to the idea for Housing.com, a website that integrated technology to the house search process. Yadav founded Housing.com in 2012, while he was only 23 years old. After Japan’s SoftBank led an investment of $90 million (Rs 550 crore) in December 2014, valuing it at Rs 1,500 crore, it gained notoriety two years later as one of India’s startup success stories, according to ET.
A few months later, Yadav, who was regarded as a startup whizkid whose middle-class, small-town upbringing and rebellious behavior won him many admirers, encountered a difficult period that cemented his reputation as the bad boy of Indian startups.
When Things Became Bad
After it was discovered that Yadav had sent a furious and threatening email to Shailendra Singh, a managing director of the largest venture capital firm in the nation, along with hundreds of his company’s employees, in the early months of 2015, the startup ecosystem in India was treated to an unprecedented spectacle. Singh was called a “dude” by Yadav, who also charged him with “inhuman and unethical things.”
According to reports, Singh responded in a rare public manner to the email on the question-and-answer website Quora, expressing his “deep hurt.” He said that the employment of a Housing.com employee by Sequoia as an analyst may have been the cause of Yadav’s email to him. “I recently learned that you yourself are completely after Housing’s employees and are brainwashing them to open some ridiculous incubation. In an email to Singh that was forwarded to Housing’s 1,500 staff members, Yadav threatened to leave if Singh did not stop playing around with him, either directly or inadvertently.
Additionally, this heralds Sequoia Cap’s demise in India, he added. Try me:)”
I do not think you guys are intellectually capable enough to have any rational discussion anymore, Yadav wrote in a letter to the board of his company shortly after hearing rumors that the board was considering replacing him. I am not just going to say I believe it; I can see it in your faces. However, Yadav apologized for his “unacceptable comments” a few days later. His apologies was accepted by the board, and he was permitted to remain CEO.
With the excuse that he was “too young to worry about money,” Yadav pulled off another surprise by giving all of the company’s shares, which he said were worth roughly Rs 200 crore, to his staff. He also urged his detractors, such as Deepinder Goyal of Zomato and Bhavish Aggarwal of Ola, to emulate him. Yadav held 4.57% of the company’s shares. SoftBank held 32%, Helion Ventures owned 19%, and Falcon Edge and Nexus Ventures each held around 10%.
Eventually, Yadav was dismissed
After an email he sent to staff members was compromised, Yadav was finally fired. He said that he had supplied conflicting information to different journalists who had called him to inquire about whether Housing.com was being taken over “to have some fun.” His behavior toward investors and the media, according to the Housing.com board, was not “befitting” of a CEO.
The dramatic sequence of events shone a harsh focus on Yadav. There was even talk of his life being documented in an Indian Amazon Prime web series.
Later, Yadav understood where he had gone wrong. Yadav claimed he was “way too young at that time and it was immature behavior” in a 2019 interview with Forbes.
As a co-founder of Housing.com and a leader at college, he claimed to be accustomed to holding the position of exclusive authority. No one was challenging him, even if he was mistaken. In these circumstances, leaders tended to become somewhat irrational and make rash decisions.
