ShopClues' Business Feud: Sandeep Strikes Again with Incorporation Documents
ShopClues re-affirms the company has always had four co-founders – Sandeep Aggarwal, Sanjay Sethi, Radhika Ghai and Sudhir Ghai but Sandeep is in attempting to prove otherwise after producing incorporation documents.
Some smoke has been coming out of the house of ‘ShopClues’, one of India’s top listed unicorn companies. While Sandeep is more often quoted in the media, saying he alone started the company; ShopClues re-affirms the company has always had four co-founders – Sandeep Aggarwal, Sanjay Sethi, Radhika Ghai and Sudhir Ghai.
Sequence of Events: (as told by Shopclues Board to BW)
• ShopClues started commercial operations in Jan 2012. In Feb, 2012, Nexus led Series A in the company.
• In Jan 2013, the company raised Series B from Helion, Nexus and other investors.
• On July 29th, 2013, Sandeep Aggarwal was arrested by FBI in San Jose, California, USA for the following crimes committed against the United States of America:-
- Conspiracy to Commit Securities Fraud
- Conspiracy to Commit Wire Fraud
• On July 30, 2013, Securities and Exchange Commission (SEC) filed a complaint against Sandeep Aggarwal for insider trading.
• Sandeep was released on bail on July 30th 2013.
• In Oct 2013 in order to take company forward the company took the following key steps:
- Sanjay became CEO, Radhika joined the board while Sandeep resigned as CEO and director to become a consultant to the company.
• On 12th March 2017, Sandeep posted some extraordinary rants on his Facebook timeline.
In reaction to which Shopclues gave out a statement to BW Businessworld via an e-mail,“We are proud of the fantastic progress made by the ShopClues team under Radhika & Sanjay’s leadership. The company’s differentiated business model and capital efficient approach has enabled it to become a market leader and has grown 30 times under this management. It is very disappointing to see an ex-founder, who disassociated from the company for his criminal wrong doings, is now engaged in a personal vendetta on a public forum. Our goal is to create value for all stakeholders and we remain focused on working closely with Radhika & Sanjay and the management team to continue to scale the company as it captures the massive opportunity which lies ahead of us.”
Sandeep Aggarwal on the other hand has filed a case of criminal defamation against the other co-founders on the account that he has been wronged on multiple counts; Sanjay Sethi and estranged wife Radhika Aggarwal,; down-playing his role in the creation of the online marketplace.
The statement has been issued a day after a series of Facebook posts were put across alleging wife Radhika of multiple things.
Apologizing for the emotional outbursts, Sandeep’s press team, issued a statement saying, “Sandeep has been wronged by many people he trusted the most. He is deeply hurt and while he stands by every word of, he regrets having an emotional outburst and using public media to express it.”
Sandeep has also filed an adultery case in the district court of Gurgaon against Sanjay Sethi in Dec 2016. Besides an adultery case, Economic offense and criminal defamation against Radhika and Sanjay, the co-founders are also battling for Sandeep and Radhika’s kids in a custody case.
According to Sandeep, He insinuates, while he did most of the work at ShopClues, his wife took all the credit, and now controls the company.
Over the years, Sandeep moved towards another online marketplace called Droom and has distanced himself from ShopClues. But now it seems that he might have been ousted from the company he founded.
Is Sandeep stating facts or exaggerating things; is something to be discussed separately but he seems to be bitter over something recent. While Sandeep is still a force to be reckoned with, it won't be entirely fair to say he built the e-commerce company on his own back.
Radhika, who then assumed an elevated position of chief business officer has worked with the other cofounders to bring ShopClues from a gross merchandise value (GMV) of 38.6 million dollars in 2013, to 1.2 billion dollars in 2016. The company is targeting 2 billion dollars in GMV for 2017 and eyeing for a potential IPO in 2018.
Last but not the least, Sandeep has posted pictures the certificate of incorporation of Shopclues on his Facebook timeline a few minutes before filing of this story, he said:
"I never realized that you need to carry the birth certificate of your baby to prove that you gave birth to a baby. Here you go...ShopClues got incorporated by me as the single officer company in Delaware, USA in June 2011, eight months after I had been developing the vision, idea, funding it from my own savings, and lining up the first round of capital from 15 of my friends. I started working on ShopClues on 10/10/2010. The first employee beyond me was hired in August 2011 and I launched the company under closed beta as the 35th entrant into Indian Ecommerce on 21st Nov 2011, the very same day 3 yrs prior to Droom.
ShopClues at the launch was the first marketplace in India based on my passion, vision and obsessions and within first 6-8 months we became the 4th largest E-commerce company in India.
By June 2013, ShopClues was a growth juggernaut, highly scalable business and best in breed seller platform. Way ahead of its time. The cost advantage and unit economics that I built for the company from day one ( primarily driven by my training as an analyst and frugal nature) are something no body could ever match or believe. Proud to be the founder of ShopClues. Rest is all history"With new developments in this story further we promise to keep you updated.
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