From Hope to Dispute: The NestAway Home Rental Platform Journey

Bhubaneswar, Jan 3 (NationPress) After Amarendra Sahu, Co-founder of the home rental platform NestAway, filed an FIR against the company’s investors, which include Tiger Global, Goldman Sachs, and Chirate Ventures, along with fellow co-founders Jitendra Jagadev and Smruti Parida, another domestic startup has sparked a major controversy.

IANS has gained exclusive insights from industry insiders and sources associated with the NestAway deal, revealing the legal and financial upheaval that has shaken the Indian startup ecosystem.

A company that was valued at Rs 1,800 crore in 2020 was sold for merely Rs 90 crore in cash, despite having raised Rs 700 crore in funding, indicating a dramatic drop in valuation.

During the pandemic, all co-founders except Sahu departed from the company, leaving it in a vulnerable position.

Despite these difficulties, the company managed to navigate through the pandemic by selling non-core assets and accumulating enough cash reserves to support growth for at least two more years.

Even after receiving a Rs 50 crore investment offer from Gruhas (the investment arm of Nikhil Kamath), existing investor Tiger Global allegedly opted to advocate for a sale at a significantly reduced Rs 129 crore rather than back new fundraising efforts, according to sources.

Investors suffered an astonishing 80 percent loss on their Rs 700 crore investment, prompting inquiries into the reasoning behind the sale, as per sources familiar with the situation.

The choice to sell the company for Rs 120 crore occurred despite having a two-year cash runway and new funding prospects, marking it as one of the most perplexing and inadequately justified sales.

With minority shareholders unlikely to accept such a drastic loss, allegations of an investor conspiracy to enforce the sale have surfaced.

Board member Jitendra Jagdev, who had access to sensitive company information, reportedly negotiated the deal on behalf of the buyer while the investors ignored this glaring conflict of interest.

After Sahu resigned in protest, investors allegedly forged his signature to finalize the sale, a move that undermines corporate governance standards.

Investors transferred their shares to the buyer even prior to finalizing the share purchase agreement, violating both the SPA and shareholding conditions.

Goldman Sachs, one of the investors, allegedly delayed Amarendra Sahu’s payout through a one-sided SPA extension. Meanwhile, former CFO Sandeep Daga remains unpaid according to the SPA terms even a year after investors received their payments. Repeated requests for resolution have gone unanswered, showcasing a lack of accountability.

IANS attempted to reach out to Kailash Nath and Sudhir Sethi of Chiratae Ventures through direct calls and messages, but neither responded by the publication of this story.

The NestAway case highlights the legal and ethical challenges affecting India’s startup environment. With the Orissa High Court scheduled to review the case on January 9, the outcome could have significant implications for the dynamics between investors and founders, as well as the wider entrepreneurial landscape.