From #RejectZomato To MobiKwik Data Leak: 11 Controversies That Shook The Indian Startup Ecosystem In 2021

At the beginning of the year 2021, Burger King UK was grilled for its tweet saying, “Women belong to the kitchen”. While the tweet wanted to point out the fact that there are fewer female chefs compared to male chefs in the industry, it did not sit well with social media users.

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Back at home, India’s Zomato has been mired in controversies since its launch and 2021 was no exception. But when netizens were adamant to ‘Reject Zomato’ on the basis of one of its employees calling Hindi as the national language, CEO and cofounder Deepinder Goyal’s tweet resonated with the theme with which yours truly is penning down this article.

Well, this is not the first time an Indian startup has been in controversy for what they have said or done, or unknowingly ‘supported’. Further, Indians are increasingly upping the cancel culture game, where “Ban ABC”, “Uninstall XYZ”, “Reject QWE” has become a recurring trend.

For example, a couple of months ago, netizens lashed out at FabIndia over its traditional wear collection titled ‘Jashn-e-Riwaaz’, alleging the de-Hinduisation of the festival Diwali. Another incident with Manyaavar recently, featuring Alia Bhatt, faced a boycott over its ad based on the Hindu tradition ‘Kanyadaan’. 

In the past, jewellery brand Tanishq was also trolled for its advertisement on inter-faith marriages. Netizens also wanted to ‘Ban Fortune Oil’ after legendary cricketer Saurav Ganguly, who used to endorse the brand, had experienced cardiac arrest. Other cancel culture instances include Dabur’s ad portraying a same-sex couple celebrating Karwa Chauth, Sabyasachi’s sultry portrayal of Mangalsutra on a model, among others.

The Indian startup ecosystem was not left behind, and here are those that were a part of controversies, facing social media trials and the brunt of angry netizens looking to cancel them.

11 Controversies That Shook The Indian Startup Ecosystem In 2021

Zomato | The Portrayal Of A Hero, An Assault & Language Support Gone Wrong

The year has been a turbulent one for Zomato. While 2020 ended with Fairwork India Ratings 2020 report rating Zomato, among other Indian startups, as the worst place to work for gig economy workers, 2021 began when a woman alleged one of Zomato’s delivery executives of assault.

Bengaluru-based model Hitesha Chandranee accused a Zomato delivery person named Kamaraj of assaulting and punching her as she refused to pay money for the food he delivered because it arrived late. According to Chandranee, the delivery executive hit her on the nose and escaped, while after Kamraj was arrested, he alleged that Chandranee assaulted him.

Zomato temporarily suspended Kamraj, paid for Hitesha’s treatment and legal charges for Kamraj and tweeted that while the case was left for the police to work on, it presented Kamraj’s track record of 5K+ and a rating of 4.75/5. Later, Chandranee was booked as many came forward not only in support of Kamraj, but some acquaintances claiming that Chandranee had a habit of seeking free food over late deliveries. The case has been dropped from both ends due to insufficient evidence.

For Zomato, the next controversy in 2021 came in the form of two of its advertisements with celebrities Hrithik Roshan and Katrina Kaif in August. In the ad, a delivery partner from Zomato delivers food to Hrithik Roshan’s house who calls him jadoo – an alien character associated with one of Roshan’s movies – for delivering the order on time even in the pouring rain. 

He then asks the star-struck delivery partner to take a selfie with him and rushes in to get his phone; in a parallel ad, Katrina rushes in to share her cake with the delivery partner. Meanwhile, the delivery partner gets a notification to pick and drop another order so he rushes out without waiting to take the selfie/having the cake. A voiceover states that whether Hrithik/Katrina or not, every customer is a ‘star’ for the delivery partner who will deliver orders even in rain.

While the ad attempts to thank the delivery personnel, portraying them as heroes who even work during unfavourable weather conditions, netizens voiced that this was an ‘inhuman’ way to treat workers. Calling the ads tone-deaf, others opined that it was immoral to not pay fair wages to delivery executives while paying hefty amounts to celebrities.

This also backfired as Zomato has previously been rated badly for poor working conditions. Later, Zomato also created social media buzz when people started questioning its commitment towards the non-Hindi speaking region and its alleged ‘preference’ for people who speak Hindi. A customer care executive’s comment to a Tamilian consumer that “Hindi is a national language” led to the “Reject Zomato” trend on Twitter, over the insensitivity of one of Zomato employees.

Swiggy | On The Wrong Side Of The Controversy

While last year, Swiggy was caught up in social media banters frequently, in 2021, it luckily managed to stay far from speaking, supporting or facing anything that would erupt into a second ‘BoycottSwiggy’ trend. 

All except one controversy. But the startup was still not in the wrong on this one. In September 2021, in a gruesome incident, a restaurant owner in Greater Noida was shot dead. Sunil Agarwal, the deceased, ran a kitchen in Mitra Society and took food orders online via Zomato and Swiggy. 

According to the police, several delivery executives were waiting to pick their orders, and one of those, was a suspect since he got into an altercation with the restaurant. Many delivery executives fled the site after the shooting incident, so there were no eye-witnesses. The very next day, Noida cops arrested three youngsters related to the case, and none of the accused was a Swiggy delivery executive, removing Swiggy’s name from the controversy.

But did it really trivialise the controversy? Several media reports in the past have highlighted how customers had gotten violent with delivery agents for delivery delays. Other incidents of adulteration, food theft, and other crimes such as assaulting customers to theft involving delivery partners have also come into the limelight, raising concerns regarding the safety of users, restaurant partners and even delivery executives of the foodtech giants in India.

MobiKwik Data Leak | Not Alone, But Tone-Deaf

IPO-bound MobiKwik was involved in a massive data leak earlier this year. Although Mobikwik denied claims about a data breach impacting 100 Mn users, according to independent cybersecurity researcher Rajshekhar Rajaharia, the database that got leaked in January 2021, contains user records for 11 Cr Mobikwik users with a whopping 8.2 TB of data.

In what many are calling the biggest data leak from an Indian tech company, the leaked data is said to impact Mobikwik’s individual customers as well as the merchants that have procured loans from the company.

Later, the company subtly gaslighted users for the data breach, claiming that it would take legal action against the researcher that exposed the leak. This tone-deaf response from an IPO-ready startup was not digested by many social media users. They criticised the startup, and the founders, following which the CEO then proceeded to block several critics, including prominent tech industry personalities, who had replied to the tweet, questioning the claims.

MobiKwik is not alone in the list of data breaches. Around 1.29 Mn customer records of the ecommerce platform LimeRoad were posted on the dark web for sale in July last year. The data of 20 Mn BigBasket users was also on the dark web in November 2020. In February 2021, Zee5 suffered a data breach that left the sensitive data of 9 Mn users exposed. 

In January 2021, we reported that over 20 Lakh credit score records with Delhi-NCR-based fintech startup Chqbook were leaked on the dark web. In April, data related to over 18 Cr orders from pizza chain Domino’s India appeared on the dark web. At the same time, B2B packaging marketplace Bizongo suffered a data leak exposing 2.5 Mn files pertaining to its customers. 

In March, Network18-owned finance portal MoneyControl also suffered an alleged data breach, one that supposedly affected 7 lakh users. Days later, online discount broking platform Upstox suffered a data breach that allegedly affected 2.5 Mn users.

What stood out in the case of MobiKwik, was not only the tone-deaf response, but also how the startup and its founders handled criticism.

Paytm | From Much-Hyped IPO To Meme Fest On Social Media

Paytm grabbed the limelight in 2021 with its $2.4 Bn IPO (at $20 Bn valuation) but its less-than-stellar listing performance and the volatility in the company’s share price didn’t work well with investors. According to pre-IPO reports, Paytm was initially targeting a valuation of $35 Bn, but then brought down its target valuation to $20 Bn for the IPO.

After the hype around India’s biggest IPO, Paytm couldn’t last one full trading session on its market debut. On the day of listing, as the stock hit the lower circuit, it was pulled off the trading floor.

So what went wrong with the Paytm IPO? 

While the issue of overvaluation of Paytm has been a major point of contention for analysts, the company’s heavy loss-making invited critical comments from netizens as well. Analysts had cautioned about investing in the stock, fearing a discount on listing day as Paytm is only likely to generate positive free cash flow by FY30. The company’s business model has been called out for lacking focus and guidance and having no competitive edge. 

Over social media, the IPO turned into a meme fest, as users lost almost 30% of their capital post the listing.

Unacademy | A Tale Of Communal Controversies

Last year, Rourkela’s Soyeb Aftab was in the limelight for topping the NEET 2020 exams. A year later in 2021, the MBBS student from AIIMS-Delhi was again famous, but for all wrong reasons — hosting a skit that mocked a famous religious epic. For ‘light fun and jest’, as the students’ body put it, the students insulted the Hindu religion in their attempt to be humorous. 

Unacademy, where Aftab is a content affiliate, drew flak on social media for ‘supporting the mockery of Sanatana Dharma’ by putting up the video on its platform. The video in question was claimed to be created for and in affiliation with the Unacademy Vlog. While it was uploaded on Aftab’s personal YouTube channel AIIMS Insider, the video reportedly ended with a logo of Unacademy Vlogs. Reports also suggest that the startup tweeted the video but later took it down. Inc42 could not independently verify the allegation.

This created a row on social media with people questioning Unacademy’s commitment towards the religious sentiments of its users and the public at large. It led to the “#ShameOnUncademy” trend on Twitter. Post this incident, Gaurav Munjal, cofounder, Unacademy, took to social media to address the issue, adducing that the startup has a massive scale but will launch a grievance redressal platform.

This is not the first time Unacademy has fallen prey to communal controversies. Previously, Unacademy was rebuked for a question in its mock CSE papers inciting hatred between two Indian communities. In May 2021, one of Unacademy’s mock papers asked a question to the tune of enmity between two communities in India, where people alleged that it put Hindus in the light as oppressors and aggressors. 

CoinDCX | Of Crypto Ads & The Treacherous Safety They Promise

October 2021 was abuzz with crypto campaigns. While CoinSwitch Kuber brought Bollywood star Ranveer Singh as its brand ambassador, CoinDCX roped in Ayushmann Khurrana and legendary actor Amitabh Bachchan. Bitbns onboarded Biswapati Sarkar of TVF fame, veteran actors Alok Nath, Archana Puran Singh, and even popular religious singer Anup Jalota.

While CoinSwitch Kuber’s ambassador stated that it was safe and simple to invest in cryptocurrencies, CoinDCX’s Ayushmann Khurrana was branding crypto investments as the future of investment tech. Others claimed that crypto would turn around the lives of the investor within a few months, while some launched campaigns aimed at investor education. 

In July this year advocates Aayush Shukla and Vikas Kumar filed a petition in Delhi High Court. They sought SEBI guidelines for crypto ads, asking them to have a mutual fund-like ad mandate, instead of what the previously mentioned blockchain startups mentioned. When the advertisement world was again bombarded with crypto ads with unadvised taglines, they were quick to invite criticism from netizens who had taken the matters into their own hands.

Calling the ads non-transparent, netizens and later concerned officials argued that unregulated crypto markets cannot be allowed to become avenues for money laundering and terror financing.

Amid the advertisement blitz, and later the criticism that came with it, large crypto players surrendered their witty guns, claiming to launch no new ads on print, TV or radio, and putting the existing ones on hold until the advertising council decided on the regulations.

iD Fresh Foods | A Battle Of Batters & Communal Angles

A viral WhatsApp message had alleged that iD Fresh Foods, an idli-dosa batter maker and supplier across the country, uses cow bones and calf rennet to increase the volume of its batter. Refuting the rumours, iD Fresh Foods in a statement said that the message was misleading, false and baseless. “Since the intensity of misinformation being spread is high this time around, we thought we should issue an official statement,” it said. The startup also filed a grievance with WhatsApp and a legal suit against a Twitter account furthering the agenda.

The issue further took a communal angle when a Twitter user claimed that the company ‘only hires Muslims’ and is ‘halal-certified’. Accompanied by its fundraising news from 2014, the Twitter user also said that the company claimed to be ‘the only company adhering to strict Sharia Islamic Law’. The company, however, did not comment on the allegation.

While this was a tense controversy, on a lighter note, iD Fresh Foods was most recently competitor MTR Foods’ target, when the latter released a print ad stating “Idli and dosa are not the same. Why is your batter the same?” 

MTR, which operates in the ready-to-cook mix category, recently launched three new idli-dosa batters, on top of its existing mixes. People got pretty stirred up, stating that historically, kitchens have been using the same batter for idli and dosas. Since the Battle of Batters is pretty recent, we still await a witty response from iD Fresh’s end.

OATS For Breakfast | A Dig At Indian Startups In The EV Space

Coming to lighter controversies now, Bajaj Auto’s MD Rajiv Bajaj recently threw jibes at the new crop of electric two-wheeler startups as the competition between legacy automakers and startups EV manufacturers heat up. 

He warned startups not to take the legacy players lightly and spoke of Bajaj’s 75-year history and success in global markets. When asked, “Who are you going to bet on?” Bajaj implored the audience, asking them whether they would bet on the legacy players or the startups.

“I would bet on BET. BET means Bajaj, Royal (E)nfield and TVS,” he quipped. But Bajaj’s clever acronyms didn’t end there, “Champions eat oats for breakfast. Do you know OATS? OATS — Ola, Ather, Torq, SmartE,” he continued. 

After Bajaj’s comment, presumably in jest, EV startups Ola and Ather were quick to make comebacks. Taking a swipe at the legacy automobile companies, Ather Energy made a witty riposte, sharing a picture of a packet of OATS that mentions – “For when you need that instant pick-up” referring to Ather’s instant acceleration offering against the competitors. Ola founder Bhavish Aggarwal, on the other hand, retweeted a post of a user mocking Bajaj, with the fire emoji.

Another EV startup Simple Energy also shared that Bajaj’s comment meant that he was taking the EV startup ecosystem seriously, and considering them as a competitor (albeit, in mockery).

Myntra’s Suggestive Logo & The Aftermath

Fashion brand Myntra earlier this year fell into the trap of controversies with their logo changes. After a petition filed by activists, who raged about its ‘obscene’ logo alleging that it ‘depicts a woman’s vagina’, the logo was changed across the app, website and packaging material. 

While the brand had no such intentions or thoughts before they had presented to the world with a new logo, the new one looked worse than the previous one. After this interesting event, netizens took turns showcasing the apparently suggestive logos of other companies including Doordarshan, Tesla, Gmail, Airbnb, among others.

Behind Ola’s Rides Cancellations And Bhavish’s “So-Helpful” Solution

Most of the time when I have booked a ride through Ola, Uber or any of the other cab-aggregating platforms, the driver calls up and asks two questions — the pickup and drop destination and the payment mode. Upon hearing the details, they would decide whether to cancel my ride or not.

It is highly unlikely that you have not faced an Ola or Uber driver cancelling your ride. Personally, I have even faced repetitive ride cancellations from drivers, sometimes being asked to pay in cash, minus the cancellation charges that I would pay during my next ride. 

The problem was mimicked over social media, and in a first, Ola founder Bhavish Aggarwal stated that the company will introduce a feature where Ola drivers will now be able to see the drop location of the customers and the mode of payment before accepting the ride. He stated that with the transparency in place, it might lead to fewer cancellations and quicker ride access.

The move is a plausible one, yet a few questions still loom. Wouldn’t drivers now cancel rides without asking the riders, leading to more drops than before? Why are online payments a problem with Ola drivers? Why are drivers asking riders to cancel rides and they would take them to the location at the same cost? 

According to reports, Ola drivers pay commissions as high as 35%. Cancellation costs them less than the commission they have to pay. As for online modes, the drivers have alleged a monthly/weekly settlement, whereas autos and cab drivers live life like daily wage earners.

With multiple online payments, they are cash strapped for the day, not only to fend for their families but also to carry out basic refuelling expenses. Social media users, both for and against the cab drivers, have pointed out their woes over the years, and how best Ola’s solution works (and how soon uber implements it), is a story for after a few weeks of trial.

How To Retain Hires – The BharatPe Way | Exorbitant And Unheard Gifting Ideas

Until now, the higher the CTC a startup was willing to offer, the higher were the chances to attract potential talent. However, now the metrics have changed and included ESOPs, but that was not what BharatPe had in mind. BharatPe made news in the year 2021 for reasons no one saw coming!

The loss-making company, that took a dig at Paytm’s losses, in June 2021 made the announcement of perks for fresh hires — BMW superbikes, the latest cutting-edge gadgets and lifestyle products and trips to Dubai for the T20 Cricket World Cup in November alongside an early appraisal.

While employees of Indian startups made $335 Mn+ through ESOPs in 2021, BharatPe’s perks set off a barrage of opinions from sexism to unfair job expectations and BharatPe getting roasted on social media.

Explore Inc42's 2021 In Review