US-based startup accelerator Y Combinator has removed Indian healthcare startup Medobed due to alleged ‘irregularities’. The startup was initially part of Y Combinator’s summer 2023 batch.
Medobed, an Indian healthcare startup that promises swift 10-minute medicine delivery, was selected along with the few hundred other startups funded by Y Combinator. In an unexpected report garnered through anonymous company information, Y Combinator severed ties with the startup and even advised prospective investors against involving themselves with the firm.
The email that exposed the inconsistencies
A YC partner revealed the ambiguous nature of these ‘irregularities’.
“If you have anything outstanding with this company, our recommendation is to disengage completely with the company. Won’t do YC demo day, and, as far as we know, haven’t raised any money as part of this process,” the email claimed.
A third-party investor revealed that a lot of the concerns were based on Medobed’s founder’s inconsistent claims. Founder Piyush Sharma allegedly provided a contradictory record of his educational background. As per his social media accounts, Sharma is an alumnus of IIT Roorkee and Stanford University.
Additionally, another concern was the company’s erratic growth metrics. The investor revealed that their claims of $1 million in monthly gross merchandise value (GMV) and EBITDA profitability appeared inconsistent.
Y Combinator reiterates its policies
Y Combinators is known to pick only a select few hundred for its highly sought-after batch from the hundreds of thousands of startups that pop up every year. Their actions regarding Medobed highlight their ethical standards and expectations regarding transparency and consistency.
India has emerged as a key market for Y Combinator in the past half-decade. In its Winter 2022 batch, the American startup accelerator supported 32 startups hailing from Gurugram, Bengaluru, New Delhi, Hyderabad, Mumbai, and Chennai.
YC’s meticulous examination of its startups hints at the rising instances of founder fraud and negligence observed in India. A notable case was automobile after-sales service startup GoMechanic’s irregular financial reporting in January 2023, which caused much outrage. Another instance that shocked the startup industry was MojoCare’s failure. Rahul Yadav, founder of Housing.com and 4B Networks is also in regulatory soup after failing to justify utilization of ₹276 Cr fund infusion by InfoEdge.
YC and Medobed’s founders chose not to comment further on the matter. Furthermore, YC removed any mention of Medobed from its website.