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Six Instances When Startups Became Infamous In 2020 While 9 Indian startups became Unicorns, there were multiple incidents when startups landed up in controversies

By Debarghya Sil

You're reading Entrepreneur India, an international franchise of Entrepreneur Media.


Humans will try to forget 2020 because of countless reasons that stems from an unprecedented and once in a lifetime pandemic. The outbreak of COVID-19 from the end of last year brought the world to an absolute standstill for the better half of this year. Soaring active cases, stressed healthcare systems, rising unemployment, debilitating economy and businesses shutting down. It feels that 2020 was an absolute nightmare. However, even during this year, startups which are often known to run with a tight budget have made our life better and convenient. Even in this pandemic year, as of today nine startups have entered the prestigious Unicorn club with a valuation of $1 billion or more in India, one more than last year.

With that being said, the year also saw some startups making into the headlines for infamous reasons.

Khatabook Vs Growthpond Technologies

If COVID has taught us one thing apart from washing hands multiple times a day is that either it be a small business or large one, everyone has to go online. This small grocery store in every locality was understood during the lockdown and thus the term "Dukaantech' became quite popular in the startup world.

Since August two companies, Khatabook and Growthpond Technologies, have been involved in a legal battle over plagiarism and IP theft. The incident first came to light in August when Growthpond Technologies, which owns Dukaan—a digital storefront for small merchants—served legal notice to Sequoia-backed Khatabook and its parent company for plagiarising its app's logo and interface.

Later, Khatabook responded by accusing Growthpond of stealing intellectual property and proprietary ideas. Khatabook then said it has outsourced the development of the app to Growthpond Technology Private Limited & Risemetrics Inc. The company further accused the Growthpond's team in the name of testing the app published on Playstore with Khatabook's proprietary data.

During the legal battle, the Karnataka high court restrained Growthpond from running and operating "Dukaan' application in any and all online platforms including but not limited to the Google Playstore till the next date of hearing. Google later delisted the app from its Playstore. During the course, muds were slinged at both sides countless times.

However, last month the dispute ended between the two companies with Khatabook going to acquire nominal equity in Growthpond's Dukaan and the latter will now be allowed to list its Dukaan app on the playstore.

WhiteHat jr Controversy

WhiteHat jr, a code learning platform for the K12 segment, has been in the news from the time it was acquired by the most valued edtech startup in the world Byju's at a $300 million cash deal in early August this year.

However, the 18-month old startup founded by Karan Bajaj soon found it mired in controversy and became a source for memes over the course of time.

It all began when Pradeep Poonia, an ex-CISCO employee, and Aniruddha Malpani, an angel investor, became critical of the much talked-about edtech startup on its false advertisement, curbing freedom of speech and underhand practices.

Poonia, who is also an UPSC aspirant, found out that the startup is selling courses that are available on the Internet for free. After probing further, he noticed that on Google Playstore the app either received 1 star or 5 stars and most of the reviews had the exact same words in it. He even got access to the company's internal communication platform and made few of the chats public. He even dissed the infamous "Wolf Gupta' ad which portrayed kids of age 12-13 after learning coding can land up a job in top tech companies such as Google, or SpaceX, thus earning in crores of rupees. He spoke about all these at lengths on his YouTube channels, Twitter, Quora and Reddit. To his surprise all his content criticising the company were taken down hours after posting it. In total two YouTube channels, a Quora account, a Twitter account, two Linkedin accounts, and three Linkedin articles have been taken down.

Last month, WhiteHat jr and its founder Bajaj filed a defamation suite of $2.6 million. The court while listening to the case has asked Poonia to take down specific tweets regarding the numbers of teachers, alleging WhiteHat Jr. to be a "ponzi' scheme, and few other tweets according to Live Law.

The court had also restrained Poonia from hacking into the firm's communication platform and barred him from sharing the chats on YouTube channel.

The company had also filed a defamation lawsuit against angel Investor Malpani worth INR 14 crore who had also been a staunch critic of the startup on various social media platforms. While listening to the case, the Delhi HC had ordered Malpani to delete some of its tweets that were derogatory and deprecatory against the company.

Both the cases will be heard in January next year.

Google Drops Paytm From Playstore

We are all aware of Vijay Shekhar Sharma's fintech startup, a Unicorn which first came into limelight during the demonteization in 2016. Since then, there has been no stopping for Paytm as it expanded its services riding on the need for digitization. However, for a few hours, in September, its flagship app Paytm was taken down from Google's Playstore, instilling fear among millions of its users. Google also took down PaytmFirstGames from the app store. The company has recently roped in Sachin Tendulkar as its ambassador.

However, other Paytm apps such as Paytm For Business, Paytm Money and Paytm Mall were still available on the Playstore.

The company to allay fears soon tweeted saying, "All your money is completely safe, and you can continue to enjoy your Paytm app as normal."

Later in a blog clearing the doubt the company wrote: "We recently launched the "Paytm Cricket League' on our consumer app for users to engage in their passion of cricket and get cashback. The game allows users to get player stickers after each transaction, collect them and receive Paytm Cashback.

Today afternoon, we received communication from Google that they are suspending our app because they believe this to be a violation of their Play Store policies on gambling. The Paytm Android app has thus been unlisted from Google's Play Store and is temporarily unavailable to users for new downloads or updates."

The company had said that it has temporarily removed the cashback component in an effort to meet the Play Store policy requirements.

Since then the company has been trying to end the monopoly orchestrated by Google by launching its own "Mini App Store'.

Tiktok & PUBG Banned

Both Tiktok, a short video platform, and PUBG, a multiplayer action shooting game, has been all over the news since the time they hit the market in different parts of the world because of its popularity. However, when it landed in India, both the platforms have been mired up in a lot of controversies with Tiktok being criticised for its lack of monitored content and is accused of transferring data of Indian users to China. PUBG, at the same time, was in the debate for most of the time parents complaining about their child's long play hours and violent graphics. The game was also under scrutiny for transferring player's information to China.

The government of India banned both these apps along with other 200 Chinese apps as it said that these apps are engaged in activities which is prejudicial to sovereignty and integrity of India, defence of India, security of state and public order".

Since then, both the apps which enjoyed a massive popularity in the country are trying to make a comeback, but haven't succeeded yet.

Mitron's Origin

Soon after the Tiktok was outlawed in the country, many Indian apps stole the limelight to continue entertaining the most young populous country in the world while providing a platform for content creatures who were looking for alternatives. Several apps such as Chingari, Trell, Mitron shot to fame overnight as their download numbers went north. Of these Mitron, an app by Shivank Agarwal and Anish Khandelwal, was in the news as the app's origin was under scrutiny. The founders have said that their source code for the app was bought legally from Australia's EnvatoMarket. After purchasing the code, they had to remove the bug and scale it to give shape to Mitron.

However, Irfan Sheikh, the chief executive officer and co-founder of Pakistan-based software firm, claimed that the concerned source code was for TicTac app which later they had put up for sale and the source code later purchased by Agarwal and Khandelwal. However, the founders have rubbished such claims. According to a report by NDTV, Khandewal has said, "Our focus was on the suitability of the initial template we purchased and the origin of the developer was neither displayed nor relevant."

"The codebase of Mitron is proprietary and we are the legal owners of the codebase. Any claim by any party claiming that it is a repackaged app is false, malicious and libellous," he further said in the interview.

BigBasket Data Breach

BigBasket, an online grocery delivery platform founded in 2011 and turned Unicorn last year, faced a data breach resulting in personal information of over 20 million customers being allegedly sold on the dark Web. The startup which shined during the lockdown as it delivered essential items to households later confirmed the breach and acknowledged that personal information such as phone numbers, and addresses were exposed. However, it claimed that the company doesn't store any financial data such as credit card numbers and they are confident that this financial data is secure.

Cyble, a cyber-security firm reported the breach on October 31 and claimed that information such as full names, email IDs, password hashes , pin, mobile/phone numbers, addresses, date of birth, location, and IP addresses from where the apps was logged in were put up for sale on the dark web for $40,000.

Debarghya Sil

Entrepreneur Staff

Former Correspondent

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