PNN
New Delhi [India], November 19: SustainKart started as an eCommerce marketplace for sustainable products across all lifestyle categories. The company was bootstrapped and cofounded by Shilpa Reddy and Kanthi Dutt in 2021 during Covid. Within few months of launch, the idea received a lot of appreciation and attention. India Accelerator from Delhi has approached the start-up within few months of launch, to accelerate it.
In SustainKart's journey, IA was not just an accelerator; they played the role of a co-founder. The first ESOPS agreement was signed with them for mentorship on startup ecosystem, fundraise, legal advice, etc. "We raised approx $500k as a pre-seed (Angel) round in Jan 2022 which had nothing to do with revenues or projections. It was purely based on the idea (at that time in 2022, post Covid, sustainability was booming and gaining attention)", said Kanthi Dutt.
After the fundraise activity, the company went ahead with rapid expansion plans as discussed with the accelerator ; building house of brands (private labels), acquiring sustainable D2C brands and retail/off-line expansion, that led to a quick burn of the fund. While India Accelerator kept assuring the start-up of a follow-on round targeting $1.5-2M, within 6 months from the pre-seed, they took forever (18 months) and finally could raise only $220k. Only founders would know how many sleepless, anxious nights we've spent during such a phase. Usually all financials presented to the investors were by accelerators.
During this dry phase, the founders have also invested/loaned money to the company via personal savings and hand loans from friends and family. Founders also approached a lot of VCs and other investors outside IA during this dry phase who denied to invest and said Sustainability eCommerce business model is too early for Indian market. A few including InfoEdge, Kalaari, Accel personally prompted that SustainKart is a model that will take longer than what we can expect to even find PMF. Meanwhile the company ran into a stage of deep liability.
"As a founder the one thing I couldn't learn/adapt from the accelerator was Pump & Dump, probably why they decided to de-accelerate the start-up and my career (trying to make me a scapegoat). We were all in this one together. Crying foul on social media, trying to damage the reputation of the founders on public platforms is definitely not expected from IA, who was our mentor, guide, coach etc. We definitely need stricter laws to protect random public bullying and personal/professional character assassination", says Kanthi Dutt.
The founder is glad that he followed a wise man's suggestion: "Pull the plug before it's too late (too much of a waste)". Today he does not have to repent about raising 10s millions of dollars in the name of sustainability. Shilpa Reddy exited the company few months prior to the shut down of the company and the company operations have been closed for over a year now. "Our company secretary team is working on the compliance to file bankruptcy", he added.
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