Financial Irregularities Hit Medikabazaar, Zopper Trims 100 Jobs & More

Now, Financial Misconduct Hits Medikabazaar

Just days after the Gensol saga got added to the Indian startups ecosystem’s wall of shame, Medikabazaar, which was pegged at $650 Mn just three years ago, has now ousted its founder, Vivek Tiwari, from the company’s board over allegations of serious financial misconduct.

What’s The Matter? An investigation conducted by Uniqus India, Alvarez & Marsal, and Rashmikant & Partners has found Tiwari guilty of misusing company funds and overstating revenue by over 50% in FY23. 

A similar concern was raised by PwC earlier that the B2B platform inflated its revenues by at least 60% in FY23, mainly by selling the same products multiple times via different entities. Notably, Medikabazaar reported a nearly 2X YoY surge in revenues to $181 Mn (INR 1,545 Cr) in FY23.

The Damage Control: The B2B supply chain startup’s Series C investors, including Creagis, British International Investment, HealthQuad, and Ackermans & van Haaren, have filed an indemnity claim totalling INR 278.7 Cr for financial misreporting. However, Medikabazaar’s legal team believes the claims can be easily contested.

More Red Flags: The company’s auditors have also expressed reservations about Medikabazaar’s financial statements due to missing records for assets and inventories worth over INR 80 Cr. They found internal financial controls to be poor and flagged risks of further errors or fraud.

The Misgovernance Rabbit Hole: Be it GoMechanic founders’ “errors in judgment”, SustainKart cooking its books, or BharatPe founder Ashneer Grover’s kin allegedly forging invoices, there seems to be no end in sight for corporate misgovernance at Indian startups.

This prompts us to ask — What’s corrupting India’s founders? But, more than that, what makes a founder falter on the governance front like Gensol, GoMechanic, or Reshamandi? For now, here’s why founder Vivek Tiwari was ousted from the Medikabazaar board.

From The Editor’s Desk

Zopper Fires 100 Employees: The insurance-focussed SaaS startup has laid off around 100 employees since the start of this year. The retrenchment impacted its tech and product teams. Zopper provides APIs for insurance distribution.   

JFS’s Q4 Profit Stays Flat: The Reliance-backed financial services giant’s net profit grew a mere 1.7% to INR 316.11 Cr for Q4 FY25 from INR 310.63 Cr in the year-ago quarter. However, the company’s operating revenue grew 17.9% YoY to INR 493.24 Cr. 

Razorpay Gears Up For IPO: The fintech major’s board has given its nod to change its name to ‘Razorpay Software Limited’ from ‘Razorpay Software Private Limited’ previously. The Bengaluru-based startup plans to get listed on the Indian bourses in the next couple of years. 

Varthana Bags INR 75 Cr Debt: The education-focussed NBFC has raised the funds in a debt round co-led by OfBusiness and its financial services arm Oxyzo. Founded in 2013, the startup offers collateral-free loans to private schools and students.

HUL Bends To Honasa Terms: Following the lawsuit filed by the D2C unicorn, the FMCG major has agreed to withdraw its Lakme sunscreen advertisement campaign. Honasa had alleged that the ad disparaged its brand The Derma Co.’s product.

Gensol’s Independent Director Quits: The BluSmart-linked company’s independent director Arun Menon has resigned, citing concerns over the debt position of the company. This follows SEBI’s probe into Gensol for stock price manipulation and debt defaults.

RCB Drags Uber To Court: The IPL franchisee has sued the ride-hailing giant for using RCB’s trademark in a YouTube ad for commercial gain without consent. The Uber Moto ad, which features Travis Head, shows the SRH cricketer pulling off pranks on rival teams.

IPEC Nets $3 Mn: The Bengaluru-based EV charging solutions startup has raised the capital from Zerodha cofounder Nikhil Kamath’s VC firm Gruhas. IPEC sells an array of EV charging products, EV connectors and vehicle charging inlets.

Google Suspends 2.9 Mn Indian Ad Accounts: The big tech giant blocked 247.4 Mn ads and suspended nearly 2.9 Mn advertiser accounts in India last year for violating its policies. The violations included airing ads related to financial services, and trademark misuse.

Inc42 Startup Spotlight

How FluxGen Is Leveraging Tech To Solve India’s Water Management Crisis

As businesses increasingly strive for ESG compliance, many are recognising the critical role of water management and conservation — and that’s exactly where FluxGen steps in to help.

FluxGen’s Disruption Stack: Founded in 2021 by Ganesh Shankar and Emanuel Deepak, FluxGen is a SaaS-based climate tech startup that leverages smart AI analytics to help businesses optimise water usage. 

While its water intelligence suite, AquaGen, helps enterprises track water flow and water levels on a real-time basis, GenAI-powered tool, Aqua GPT, helps companies identify inefficiencies such as leaks, wastage, and excessive usage. 

The $10 Mn Revenue Aspiration: The startup, which operates on an annual subscription model, clocked $500K in revenues in FY24 and is eyeing $1 Mn in top line in the recently concluded fiscal. FluxGen wants to achieve the $11.6 Mn revenue milestone in the next three years.

This growth has come on the back of its long list of clients, including Amazon, Ashok Leyland, ITC and the Tata Group.   

Market Opportunity: The startup competes with the likes of homegrown players such as Swajal, Uravu Labs and DigitalPaani in the water management space, which is projected to become a $43.52 Bn global opportunity by 2032.

Flush with its recent $3.3 Mn Pre-Series A fundraise, can FluxGen become the go-to player for industrial water management?