Indian start-up co-founder gives away $25m of shares

A week after slamming his Housing.com investors as "intellectually incapable" in a hastily withdrawn resignation letter, Rahul Yadav, the controversial Indian entrepreneur, said he would give his entire shareholding in the online property site that he co-founded to its employees.

"I'm just 26 and it's too early in life to get serious about money, etc," said Mr Yadav in a statement released by the company, adding that "every employee of Housing.com is now a company shareholder!"

The flamboyant chief executive, who has a history of spats with other senior figures in the India tech scene, revealed his decision at a packed employee meeting at the Renaissance hotel in Mumbai.

Mr Yadav was only persuaded to stay at the start-up last Tuesday following "frank and healthy discussions" at a hastily convened board meeting led by Japan's SoftBank, Housing.com's largest investor that led a $90m funding round for the company in December.

Following the board meeting, the outspoken entrepreneur backtracked on his previous comments that there were not enough hours in his life "to waste with you guys". He then apologised for his "unacceptable comments" and pledging "full harmony" with investors.

On Wednesday evening, Mr Yadav pledged to gift his own 4.5 per cent stake, valued by the company at almost $25m, to Housing.com's 2,251 employees at the property portal's first town hall meeting since that narrowly avoided implosion.

However, it remains unclear if Mr Yadav's gift has the backing of the board or how it will affect the long-term health of the company. SoftBank declined to comment.

"I think it's an impulsive decision by an immature person," said Mohandas Pai, an investor and entrepreneur based in Bangalore.

The latest move by Mr Yadav will again underline the potential for discord in India's exuberant start-up scene, as aggressive funders come to terms with the inexperienced owners of India's nascent tech companies.

Record funds have been flowing into the sector, leaving a plethora of recent Indian start-ups with valuations above $1bn and raising the spectre of India's own dotcom boom and bust.

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While Morgan Stanley has estimated that the Indian ecommerce market will grow from $3bn last year to $102bn in 2020, it is clear that Mr Yadav has his mind set on loftier goals than valuations alone.

When explaining his decision to give away the shares the man described as a "cult hero" in India's start-up world by sections of the Indian press said that Housing.com was started for two, overlapping, reasons: to solve the house hunting problem globally and to "create a global giant for real estate".

"Other than these two, there is no other factor at play here, including money!" he added.

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