By: FPJ Web Desk | May 31, 2023
Edtech startup Educomp has been caught inflating revenues to fool investors by hiding pending payments and propping up a subsidiary as a client, to divert money from loans to bulk up its balance sheet.
Before Educomp, garage chain and app Go Mechanic, backed by Sequoia, was caught overstating its income by auditing firm Ernst & Young, in an audit for another big investor SoftBank. At least 60 out of its 1,000 garages and those favoured by it were showing disproportionately high revenues.
Led by founder Ankiti Bose known for speaking at events and splurging on new initiatives to get attention of investors, the Singapore-based fashion startup Zilingo finally asked her to resign in 2022, after accusing her of inflating revenues. As Bose fought back, the Sequoia-backed firm started to crumble.
Founded in 2006 in Chicago by Rishi Shah and Shradha Agarwal, Outcome Health allowed clients to advertise their products in clinics and hospitals. But they siphoned off $1 billion by charging money from clients despite under-delivering on ad campaigns.
The World Startup Convention is to the startup ecosystem what the Fyre Festival was to music fans. The convention sold passes to aspiring startup founders by using Elon Musk and Sundar Pichai among others as attractions. But when they reached the venue, the "notable invitees" were nowhere to be seen.