In another stunning case of business failure, the lead investor in Rahul Yadav’s new startup saw Rs 280 crore “vanish”. Rahul Yadav, the Indian startup industry’s ex-poster boy, first grabbed headlines with his meteoric rise and fall with Housing.com. He is now accused of splurging on luxuries instead of paying his employees.
Yadav’s 4B Networks, which operates Broker Network, is on the verge of an exceptional collapse. As per lead investor InfoEdge, the company has burnt more than Rs 280 crore in less than 18 months. However, over 150 employees have not received their salaries since November 2022.
On the other hand, founder Rahul Yadav reportedly moved around in a Mercedes-Maybach and rented a boardroom at Mumbai 5-Star Taj Land’s End for Rs 80,000 per day. He is also accused of borrowing personal loans from long-time employees. Rahul Yadav faces a criminal case filed by one such colleague from whom he borrowed Rs 50 lakh, it was reported.
Some employees were also reportedly asked to take “advance salary” loans and then transfer the money to Yadav. Yadav maintained a lavish lifestyle through this financial struggle at the company, employees have alleged.
"Yadav told us luxuries such as his Maybach came from his earnings at Anarock," and he was "also looking to buy a Bentley," an employee was quoted as saying. Yadav has denied all allegations related to any wrongdoing at the company, it was reported.
Lead investor Info Edge has now initiated a forensic audit into Yadav’s firm, as he “repeatedly failed to provide the information”. Info Edge has invested Rs 276 crore in 4B Networks alongwith debt financing of Rs 12 crore via its wholly-owned subsidiary Allcheckdeals India Private Limited (AIPL).
Rahul Yadav founded 4B Networks in 2020 and last raised funds to the tune of Rs 90 crore in September 2022 at a valuation of $185 million (Rs 1462 crore).
(Inputs from IANS)
