Shifting Landscape: Nearly 20 Indian Startup CEOs Step Down from Roles in 2023
The year 2022 indeed marked a notable period for CEO exits in the Indian startup landscape, with key departures from prominent companies like BharatPe, Zilingo, Sportskeeda, Zebpay, and Ola Cars. The departure of top leadership from these companies was often linked to various reasons, ranging from financial irregularities to strategic changes and shifts in company priorities.
The trend of CEO exits seems to have continued into 2023, with the first eight months witnessing around 20 startup CEOs stepping down or moving to new roles within their companies. This upswing in CEO attrition could be attributed to a combination of factors, including the ongoing challenges faced by startups due to the funding crunch, increased scrutiny on corporate governance and financial practices, and the evolving dynamics of the startup ecosystem.
The departure of CEOs, especially those holding critical leadership positions, can have a significant impact on a startup’s operations, strategic direction, and investor confidence. As the Indian startup landscape navigates these changes, it will be important for companies to focus on maintaining stability, ensuring effective leadership transitions, and demonstrating transparent and ethical practices to regain investor trust and maintain growth trajectories.
The trend of CEO exits in the Indian startup ecosystem has impacted a range of industries, with some of the prominent names experiencing leadership changes. Notable companies like DealShare, BharatPe, upGrad, boAt, Flipkart Health+, ZestMoney, Cuemath, and Porter have all seen their CEOs leave their roles within the first eight months of 2023.
Among the industries affected, edtech leads the way with the highest number of CEO exits, reflecting the intense competition and evolving dynamics in the education technology sector. Fintech and healthcare follow closely, with significant changes in leadership positions. E-commerce and co-working spaces have also witnessed CEO exits, highlighting the challenges and changes faced by companies in these sectors.
CEOs who quit or joined a new firm
The CEO shuffle continues with significant changes in various sectors. BharatPe, embroiled in controversy, witnessed the departure of its Chief Executive Officer Suhail Sameer. The fintech company faced challenges and even underwent layoffs before Sameer’s exit. Despite an interim Chief Executive Officer, the company is yet to appoint a permanent successor, highlighting the ongoing search for strong leadership.
DealShare, another player in the fintech arena, faced a similar situation with the departure of Chief Executive Officer Vineet Rao. Following Rao’s exit, the company hasn’t announced his successor, emphasizing the importance of a smooth leadership transition during such critical times.
In the edtech realm, upGrad saw the departure of its CEO Arjun Mohan, who led the company for nearly three years. Mohan’s move to join Byju’s to head its international operations showcases the competitive landscape and demand for experienced leaders in the edtech sector.
Additionally, the healthcare sector experienced changes, as Flipkart Health+’s Chief Executive Officer Prashant Jhaveri stepped down after more than a year at the company. These leadership transitions reflect the dynamic nature of the startup ecosystem, where attracting and retaining top talent remains crucial for sustained growth and success.
CEOs who took up a new role within the company
The startup landscape has seen a mix of voluntary Chief Executive Officer changes and elevations to new roles within companies. Co-working provider 91Springboard made a transition by appointing Anshu Sarin as CEO in place of Anand Vemuri. Vemuri, with his 11 years of service at the firm, will take on the role of executive chairman, showcasing the company’s strategy to retain experienced leaders in strategic roles.
Logistics company Porter also saw a change in leadership, with CEO Pranav Goel being promoted to executive vice chairman. Similarly, consumer electronics brand boAt, higher education edtech platform DataTrained, and skincare brand SkinQ elevated their Chief Executive Officer to new roles within their respective companies.
Manan Khurma was re-appointed as CEO, resulting in the departure of 100 employees. This highlights how leadership transitions can be accompanied by organizational adjustments to align with new strategies.
CEOs who left after shutdown or acquisition
The list of departing CEOs also encompasses startups that either underwent acquisitions or ceased operations this year. Car servicing startup GoMechanic, for instance, was acquired by Servizzy, a consortium led by the Lifelong Group. The acquisition followed GoMechanic’s decision to lay off 70% of its workforce due to identified lapses in financial reporting. Subsequently, all co-founders, have parted ways from the company.
Similarly, vernacular content platform Bluepad shut down its operations earlier this year. The CEO, Sanjyot Bhosale, later took on the role of product manager at Koo. Additionally, co-working platform Friyey and healthcare company ConnectedH also decided to shut down their operations. While these are some of the instances, there could be more startups silently closing down or facing challenges amidst the ongoing funding difficulties.
CEOs caught in legal tangle
Notably, several startup CEOs are currently facing legal challenges that could potentially lead to the shutdown of their operations. For instance, Srinivas Kalyan, the CEO of GeekLurn, was arrested in June on charges of defrauding thousands of students. Healthtech startup Mojocare is also facing the possibility of shutting down as investors don’t see viable options for selling the company.
Additionally, investors of Mojocare are considering legal action against both co-founders. Meanwhile, the Mumbai Police’s Economic Offences Wing (EOW) has initiated legal proceedings against the co-founders of 4B Networks, Rahul Yadav and Sanjay Saini. Recently, Info Edge, an investor, stated that its investment in Yadav’s new startup was a mistake, leading to the entire investment being written off.
Leading a startup as it has never been an easy task, both globally and particularly in India where unique challenges abound. While leadership changes can often be driven by various factors such as IPO plans, acquisitions, or the need for fresh leadership, it becomes a matter of concern if such changes are prompted by governance lapses and related issues.
While the current sample size is small and many issues are still under legal consideration, there’s a pressing need for startups to revisit their internal controls and governance practices. This should be done without compromising the entrepreneurial spirit that is the driving force behind these companies.
https://entrackr.com/2023/08/nearly-20-indian-startup-ceos-quit-their-posts-in-2023-so-far/
