Housing calls Sequoia ‘inhuman and unethical,’ VC tells the Indian startup to grow up

A couple of days back a curious cat leaked an email sent by Rahul Yadav, CEO and co-founder of Housing, one of the hottest Indian startups, to Shailendra J Singh, managing director of Sequoia Capital in India. The content of the email was explosive. It accused Sequoia Capital of “inhuman and unethical things,” threatened retaliation in kind, and ended on an ominous note.

The context of the furious accusations was missing in the email, but it appeared to be a rant against poaching. ”I just came to know you personally are completely after Housing’s employees and are brainwashing them to open some stupid incubation. If you don’t stop messing around with me, directly or even indirectly, I will vacate the best of your firm. Try me,” says Rahul Gupta’s email to Shailendra Singh, which got out on the question-and-answer website Quora. Without going into details, the email also accused Sequoia of “messing with” with other startups like Flipkart, Ola, TaxiForSure, and Dexetra.

The leaked email was out for all to see on Quora, where the Indian startup community is active. A lot of puzzled people immediately demanded answers from both parties. Some chose the opportunity to spill more vitriol anonymously.

Sequoia Capital is not an investor in Housing, which is backed by Helion Venture Partners, Qualcomm Ventures, Nexus Venture Partners, and SoftBank.

The same day, we reached out to both Housing and Sequoia Capital to find out what this was all about. Housing refused to comment further on it, but didn’t deny the content of the leaked email. Sequoia Capital gave Tech in Asia its version of the story off the record, because the VC firm preferred not to respond.

Trolls force a response

But today, probably prompted by all the unwanted attention it was drawing on the public forum, Sequoia decided to break its silence. Shailendra Singh sent a detailed response to the Rahul Gupta email, saying that he was deeply hurt and surprised. His “best guess” was that the mail was “triggered by an offer that we [Sequoia] made to one of the Housing employes to join us as an analyst.”

He went on to provide context by pointing out that more than 100 candidates had been evaluated from several companies, as Sequoia felt a need to hire younger analysts with startup experience. “I personally met about a dozen of them, including two Housing employees, whom I spent an hour each with. We made an offer to one of them, and he decided to join us,” says Singh.

He went on to talk of the “larger picture” of a maturing startup ecosystem in India with an increasingly large pool of stake-holders. “During my career in [Silicon Valley], what stood out is a feeling of community – amongst entrepreneurs, employees, and investors – and a sense of professionalism, not personalizing the competition between funds or individuals, and having a drink together in the evening. For us, that means not being vindictive and petty and instead being collaborative with the ecosystem – to focus on what matters in the long term,” says Singh.

Despite this response, Yadav was unrelenting in his attack. Commenting on the Quora thread, he says: “You clearly know what shit you’ve done with multiple entrepreneurs and startups in India with your cheap and dirty tactics. This time I know what you have done is a very small thing. But with whatever history we have had in the past, even the smallest act by you pinches a lot. And unlike being fake like you, I’ll be true here – I do not wish good for you or your firm until [sic] you’re at the helm.”

It appears from this comment that there is more to it than the hiring fracas, but Yadav does not elaborate.

Housing is the biggest success story among campus startups in India. A bunch of students from the Indian Institute of Technology (IIT) Bombay founded it in 2012. It has raised US$109 million in funding so far, the latest round of US$90 million led by Japan’s SoftBank.

Shortly before this email controversy, Housing was in the news again, though for a tragic reason. Four key members of the Housing team, including co-founders Advitya Sharma and Kamlesh Mohpal, were involved in a late-night car crash. Nilesh Wani and Siddarth Bhandari died in the accident.