In March, hundreds of budding entrepreneurs descended on Noida, a suburb of India’s capital Delhi, to attend a three-day convention that had dubbed itself the “world’s biggest funding festival”.
Eager start-up founders looked forward to rubbing shoulders with business leaders at the World Startup Convention (WSC), hoping that their 15-minute pitches would transpire into funding.
In 2021 and much of 2022, India’s start-up ecosystem was flush with funds as companies raised record amounts, birthing unicorns and making overnight millionaires of several entrepreneurs. But global headwinds had made investors more cautious, drying up liquidity.
That’s why expectations were high from the WSC. But within hours of the event kickstarting on 24 March, things plunged into chaos. Many participants and some sponsors have alleged that they were lured with false promises and cheated; the organisers deny this, accusing some of the entrepreneurs of disrupting the convention.
On Day 1 of the event, Sachin Chauhan and his team arrived at the venue raring to go. An entrepreneur from the northern state of Haryana, Mr Chauhan had bought passes for the event after seeing advertisements for WSC all over social media in February.
According to WSC’s website, top Indian politicians including federal transport minister Nitin Gadkari and health minister Mansukh Mandaviya were among the chief guests. Other guests included state chief ministers and ministers, all from the governing Bharatiya Janata Party (BJP). Mr Gadkari’s Twitter and Instagram pages had posted about his planned speech at the event.
Short promo videos featured popular influencers such as Ankur Warikoo, Prafull Billore, Raj Shamani and best-selling author Chetan Bhagat. The publicity material said that 1,500 venture capitalists, 9,000 angel investors and 75,000 start-ups were expected to participate. It was billed as a platform to meet potential customers, network and pitch directly to investors.
Mr Chauhan, co-founder of the bike servicing and repair app Apna Mechanic, spent 20,000 rupees ($244.4, £196.3) to buy tickets for himself and four colleagues.
They arrived with a presentation for potential investors. Their excitement, however, didn’t last long.
“Hours went by and we barely saw any investors,” he told the BBC.
Bherav Jain, founder of the start-up Reproc, had travelled thousands of kilometres from the southern Indian state of Tamil Nadu.
“The crowd was full of start-up founders,” Mr Jain said. “I don’t think there was a single person [there] who was an investor.”
By 1.30pm, a scheduled virtual address by Mr Gadkari had been cancelled and a rumble of discontent was spreading among participants.
Many began gathering around the stage, demanding an explanation.
“People started asking questions about where the investors were,” Mr Chauhan says. “And it [soon] became chaotic because the founders didn’t have answers.”
By the end of the day, a group of 19 entrepreneurs – including Mr Chauhan and Mr Jain – had filed a police complaint, accusing the organisers of cheating and breach of trust.
Luke Talwar and Arjun Chaudhary, co-founders of Qofunder Pvt Ltd which organised WSC, denied all the allegations. They told the BBC that a group of “disruptors” with “an anti-BJP agenda” had ruined the event, forcing them to call the police.
The ministers and the BJP have not issued any statements about this.
Mr Chaudhary says Mr Gadkari’s address was cancelled because of the commotion caused by the group, adding that the rest of the convention took place as planned with police providing security.
“[Investors] may have been less in number but they were there,” he added.
According to him, among those present were India’s largest private sector bank ICICI Bank, investment firm Unicorn India Ventures, financial services company Bajaj Finserv, and Premji Invest, a private equity fund owned by software tycoon Azim Premji.
But Mr Chauhan says the event mostly consisted of start-up founders going on stage to pitch themselves to an audience of other start-up founders. “What’s the point of that?”
Disgruntled participants have written scathing posts about their experiences at the WSC on social media and left negative Google reviews online.
Several companies have also said they were misled into sponsoring the event. Mr Warikoo and Mr Shamani, who have millions of followers on social media, allege WSC used their videos for promotion without permission, which the organisers deny.
Police say they are investigating the case. No one has been arrested or detained yet.
The disappointment is particularly acute for Bambrew, a Bangalore-based sustainable packaging brand, whose founder says it spent $45,000 to sponsor the event.
“We fell into the trap and invested heavily in not only being the sponsor but also in making a setup and samples to be distributed among people,” says founder Vaibhav Anant.
Software development platform Builder.ai, another sponsor, says it was “extremely disappointed” with the events at WSC.
“We reached out to the organisers for an explanation, as well as a request for a refund, and to request the removal of our name and brand from this event and their channels,” a spokesperson for the company said, adding that they did not get a reply.
Builder.ai’s name and logo continue to be featured prominently on WSC’s website.
Other sponsors have tweeted along the same lines.
The organisers, however, blamed the protesting entrepreneurs for the backlash from sponsors and influencers.
The widespread media coverage has “destroyed our lives”, Mr Chaudhary says.
Some of the sponsors and participants said that they were under the impression that big names such as Indian Prime Minister Narendra Modi, Alphabet CEO Sundar Pichai and Twitter chief Elon Musk would be attending. But organisers said their images had been used for an earlier event planned for January which fell through.
Raghumanyu Taneja, a lawyer who was at WSC hoping to network and is now representing the group that filed the police complaint, says their faith in the event was driven by the involvement of influencers such as Mr Warikoo. They could now face fines under endorsement rules in India, he told the BBC.
Mr Warikoo, however, refutes this. “I am responding personally to all those who are writing in and sharing my formal response with the media,” he said in a text message.
The police complaint filed by the entrepreneurs accuses the organisers of perpetrating a $12m scam – the group arrived at this ballpark figure based on the number of people and start-ups they saw at the event.
But Mr Chaudhary says the WSC’s total revenue from the event was a fraction of this amount.
“If it was truly a scam, why would we even hold an event where people find out about it in a few hours? Shouldn’t I just have run away with the money?” he asks.
The event eventually had 4,000 participants, according to Mr Talwar. The WSC has shared endorsements from start-ups on its website and with the BBC. None of these, however, mentioned the amount of funds they were able to raise.
The complainants say they are planning their next moves on a WhatsApp group, while WSC organisers say they plan to pursue legal action against them.
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6 March 2022
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