In a series of tweets, Manish Maheshwari has finally announced plan to step down from CEO of Invact Metaversity
Sources told Inc42 that out of $5 Mn in Seed Funding, one leading investor hasn’t yet funded $2.5 Mn as committed
Another cofounder Tanay Pratap in April meeting had also offered to leave the company citing differences with Maheshwari
Amid rising pressure from investors, former Twitter India CEO and Invact Metaversity cofounder Manish Maheshwari has now announced plans to leave the company, after weeks of uncertainty over the startup’s future and direction.
“I am moving out of Invact to first take a break for a few months and then pursue new opportunities. It is heartbreaking for a founder to leave the startup, like a mother leaving her baby. I am going through the same emotion,” Invact’s Manish Maheshwari tweeted earlier today (May 27, 2022), adding that cofounder Tanay Pratap would be leading the company.
“I have full trust in @tanaypratap. I will be cheering from the sidelines for Invact to become the next unicorn and ultimately go for an IPO under his leadership,” he added.
The past few weeks have brought up plenty of questions around Invact Metaversity’s future. As per sources, Maheshwari wanted to run the startup, the way CEOs run large companies. However, given that Invact was a budding startup, it needed a shared vision. It couldn’t be run unilaterally.
The majority of employees, and the investors had greater faith and trust in Pratap’s ability to take Invact forward, while Maheshwari felt sidelined.
“Maheshwari felt like he was being arm-twisted,” said one of the sources who worked closely with both founders.
Inc42 has covered the rise and fall of the much-hyped edtech and metaverse startup in great detail — from its business model and plan, to its funding round as well as the clash of vision between the two founders.
However, the story of Metaversity continues to present more twists with each passing day. Investors in the company have also publicly spoken out against the misalignment between the founders. And given that it comes amid a funding winter, it also represents a great lesson for the early-stage startup community at large.
Various sources close to Invact Metaversity have told Inc42 that the startup is yet to receive half of the $5 Mn it had announced raising from over 70 investors. One of the VCs in Invact is yet to send the tranche of the $2.5 Mn committed during the fundraise.
“Given that one VC’s money never came in, this is where first differences started to show up between Pratap and Maheshwari,” said one source close to both.
When Cofounder Pratap Wanted To Quit
The differences between the two turned into a public dispute in April, when in a company-wide meeting the cofounders had an altercation in the presence of the entire leadership team, which included the heads of design, engineering, strategy and product. The dispute was over the company’s vision, planning and execution.
As Aanchal Arora, who worked as an advisory consultant with Invact Metaversity, tweeted, “They were still figuring out the vision. Is Invact a tech company (Tanay) or a content company (Manish)? I ended up asking this question company-wide on slack channels in Feb. “We’re both, like Netflix” is the answer that was given. Netflix has great content and great tech.”
Amid the clashes, cofounder Pratap offered to leave the company, while Maheshwari and the others in the team were said to be aware of the fact that without Pratap, the product could not be realised. And, plus, Maheshwari was not ready to leave the company.
As seen in the company’s emails, which Inc42 has reviewed, shortly after this clash in the office, the duo sought to meet and sort out the differences. Unfortunately, this meeting did not resolve the differences.
Manish Broke His Promises, Alleges Investor
Amsterdam-based investor Gergely Orosz has gone public in his fight with Invact CEO Manish Maheshwari. While he tweeted about the state of affairs of the company on May 23, 2022, he soon deleted the tweet.
Explaining why he took down the tweet, Orosz later clarified “I deleted the tweet after coming to an agreement with @manishm (Maheshwari) on how he will step down from the company and what terms he asks for. I kept my side of the agreement. He got his terms. Manish did not keep the agreement. He lied to me. I am so done with unethical founders.”
Having demanded Maheshwari leave the company, Orosz further accused the CEO of unethical practices, “If I invest in a company, and a cofounder unethically holds that company hostage, looking at their sole selfish interest: I will do what is best for the employees, the customers and the investors. If the only way to do this is in public: I do it in public.”
He also indicated that the investors and founders had indeed arrived at an agreement. However, that didn’t work out. “I am doing this in public because weeks of doing in private did not lead anywhere. And because I told @manishm exactly this will happen if he acts unethical.”
MetaMBA Course Was On Track: Employees
“As we started testing the early version of the Metaversity platform with students, we realised that the immersive classroom and the community experience were not getting delivered at a level that we had envisaged. We also ran into technology and ecosystem challenges as we solved accessibility on devices currently used by students,” – Manish Maheshwari
While Maheshwari had expressed that the technology at Invact wasn’t market-ready, at least 5-6 employees as well as investors told Inc42 this was not true.
“This was honestly a lie. Everybody knows it right now, including Manish. Manish was actually the biggest supporter of the product. So, suddenly turning around and saying it is not ready in public was, in fact, very dishonest,” one source said.
For users facing tech challenges, the team had even prepared a backup plan with the ‘Lite’ version. Speaking about the problems on the course front, the source added that the first month’s program for the four-month MetaMBA was almost ready. The plan was to prepare the second month’s program by the end of May.
One of the problems was that since some of Metaversity’s mentors were working on their content independently, it was not possible to prepare the entire course curriculum by the startup’s team.
Can Metaversity Resurrect Itself?
For the last four weeks, there has been a constant fight between the cofounders over the company’s vision, planning and execution.
While most of the investors and employees agree that the entire blame can’t be tied to only one founder, they had also sided with the arguments asking for Maheshwari’s exit as the only possible way to move forward.
It is worth noting that the company at this point was unsalable and talks with Unacademy and other companies for acquisitions reportedly fell through.
With Manish Maheshwari gone, can Invact 2.0 relaunch the courses as promised? Can the company recover from the bad blood and rebuild its image? These are some of the big questions in the wake of the CEO’s exit.
Plus, Metaversity also has to convince investors that have backed the startup that this is not vaporware and indeed can be a promising product with good monetisation. However, for at least the next few months, the focus will be on how the startup overcomes these initial hiccups and the teething issues.
While the ball was so far in Maheshwari’s court, going forward, it will be the other cofounder Tanay Pratap who will be under the limelight given the acrimonious exit of the former.
