A day after ShopClues founder and former CEO Sandeep Aggarwal accused his wife, co-founder & Chief Business Officer Radhika Aggarwal of taking away his voting rights at the company and having illicit relationship with the other co-founder and CEO Sanjay Sethi, through a series of Facebook posts, its investors came out in support of the current leadership.
In a statement, the ShopClues Board — which comprises Anup Gupta of Nexus Venture Partners, Sanjeev Aggarwal of Helion Ventures and representatives of Tiger Global and GIC, besides Radhika and Sanjay — rejected Sandeep’s claims, saying he is “now engaged in personal vendetta on a public forum”.
“We are proud of the fantastic progress made by the ShopClues team under the leadership of Radhika and Sanjay. The company’s differentiated business model and capital-efficient approach have enabled it to become a market leader and grow 30 times under this management,” the statement said.
“It is very disappointing to see a former founder, who disassociated from the company for his criminal wrongdoings, is now engaged in a personal vendetta on a public forum. Our goal is to create value for all stakeholders and we remain focused on working closely with Radhika and Sanjay and the management team to continue to scale the company as it captures the massive opportunity which lies ahead of us,” it added.
The problem between Sandeep and the current leadership started when Sandeep, a former equity analyst at US-based financial services firm Collins Stewart, was arrested in 2013 by the FBI over insider trading charges. According to the investigation agency, Sandeep tipped off Richard Lee, a portfolio manager at hedge fund SAC Capital about a pending deal between Microsoft and Yahoo.
Sandeep was consequently banned by the US Security and Exchange Commission (SEC) from trading after he pleaded guilty. He was later released on a US$500,000 bond until trial.
After a few months, he came back to India. Upon his return, he says in the Facebook posts, he found something wrong in the company and that his wife deliberately avoided him. He grew suspicious about her behaviour, as she appeared more close to Sethi. When he came back to India in August 2014, he also found that ShopClues changed Sandeep’s right to nominate a board member way back in April 2014 and he was kept in dark by the two.
However, the statement from the company’s Board rejected his claims. “Sandeep and ShopClued got into an agreement where besides other things it was agreed that in an event Sandeep pled guilty or is otherwise convicted or found guilty for the alleged crimes, he will cease to be a consultant, will have no operating role in the company and will relinquish the right to be a board director or have any active ability to elect or remove any non-CEO board directors,” it reads.
ShopClues was founded in 2011 by Sandeep. Unlike other marketplaces, which tend to focus on mobile, electronics, computers and branded fashion, ShopClues mainly focusses on unstructured categories. As of January last year, the company shipped out over 3.5 million items on a monthly basis, attracting a traffic of more than 100 million visits a month. It had 350,000 registered SMB merchants selling on its platform. The firm launched multiple new services for seller marketing last year, including working capital loans, ShopClues Connect (chat services), Neighbourhood Market (hyperlocal discovery platform), logistics & payment services, and domain services.
In January last year, ShopClues raised an undisclosed amount in Series E round of funding led by Singapore’s sovereign wealth fund GIC, with participation from existing investors, including Tiger Global and Nexus Venture Partners. With this, it joined the billion dollar club with a US$1.1 billion valuation.
This funding came exactly a year after it received over US$100 million in Series D funding led by Tiger Global.