Furious over the arrest of Stayzilla owner, 73 tech biggies write letter to Home Minister Rajnath Singh

Stayzilla, the Chennai-headquartered hotel and homestay aggregator that had cumulatively raised $34 million (about Rs 220 crore), shut operations on February 23 this year.

Signed by 73 big names of the industry including Paytm's Vijay Shekhar Sharma, the letter strongly criticize the manner in which Vasugpal had been arrested."If ever there's a right to be an entrepreneur, that's clearly been violated. Period. The question is not how this will affect entrepreneurship today, but how young Indians looking to become entrepreneurs in the future will give up even before starting up," mentioned the letter.

Raising concerns over the issue, the letter further mentioned, "You can find as many technical flaws and loopholes about a client-vendor contract (which by the way can be contested in the long term), and go roundabouts regarding how "an innocent" vendor was forced to abuse, intimidate and even send voodoo dolls with the picture of entrepreneur's kids".

Stayzilla, the Chennai-headquartered hotel and homestay aggregator that had cumulatively raised $34 million (about Rs 220 crore), shut operations on February 23 this year.

Yogendra 'Yogi' Vasupal, one of the co-founders and chief executive of the company wrote a blog post explaining the move. While the candid post attracted some praise on how to admit missteps, subsequent events have cast a spotlight on the challenges of running and, when it comes to it, shuttering a start-up in India.

Following is the brief history of the matter:


  • The Chennai police arrested Yogi on March 14, following a complaint from Jigsaw advertising agency, who said Stayzilla had not paid the company its dues of over Rs 1.56 crore for the services rendered. Meanwhile, Rupal Surana, Yogi's wife and co-founder of the company, published a post on Medium, which was earlier written by Vasupal.
  • In his post, Vasupal claimed that his former landlord sent him death threats (presumably for not paying rent) and also elaborated on Stayzilla's dispute with its media agency (Jigsaw) and going by what he said, it looked like some people tried to intimidate the members of the founders' families.
  • Since then some of the investors in Stayzilla, who had lost their money, appealed for his release.
  • Sections of the media, who focus exclusively on the start-up world, also started a campaign on Vasupal's behalf.
  • Over the issue, Karnataka IT minister Priyank Kharge said he had spoken to his Tamil Nadu counterpart for a fair hearing for Vasupal. Kharge said he had been goaded into action by some of the "stalwarts of the start-up community" who appealed to him for help. Jigsaw, on its part, claimed fraudulent behaviour by Vasupal and Stayzilla.
  • On Monday, 73 entrepreneurs of the country, which include Vijay Shekhar Sharma of Paytm and Bhavish Aggarwal of Ola Cabs wrote an open letter to the Home Minister.


Following is the full text of the mentioned letter

Open Letter From Founders on Stayzilla Issue

Date: 20th March, 2017
To,
Shri. Rajnath Singh Ji
Hon'ble Home Minister
North Block, Central Secretariat ,
New Delhi-110001

Dear Sir,
We would like to express our concern and draw your attention towards the manner in which Yogendra Vasupal (Yogi), Founder and CEO, Stayzilla was arrested with regard to the matter registered as FIR 71/2017 CCB Chennai and the alleged influence including harassment by the concerned officials in Chennai, Tamilnadu.

Although we do not wish to prejudge to the matter, the Stayzilla case and it's locked up founder underscore the hardships of being an entrepreneur in India. If ever there's a right to be an entrepreneur, that's clearly been violated. Period.

The question is not how this will affect entrepreneurship today, but how young Indians looking to become entrepreneurs in the future will give up even before starting up.

You can find as many technical flaws and loopholes about a client-vendor contract (which by the way can be contested in the long term), and go roundabouts regarding how "an innocent" vendor was forced to abuse, intimidate and even send voodoo dolls with the picture of entrepreneur's kids.

The point is, all this appears to be a Bollywood nightmare, and unlike the movies, there are no real life superheroes to fight the battle. How you wish there actually was a superman who could stop it then and there. This doesn't necessarily wipe out the faith in judiciary. If anything, a fair judicial probe and hearing, is the only hope from here on.

But all this does shake the faith when it comes to starting up in India, building a company from scratch. As a founder, we already have enough battlefronts, from acquiring customers to funding growth and ensuring the startup doesn't die. You add a disgruntled vendor using position of power and influential network to make you go through hell, and suddenly, it becomes a battle lost.

When Yogi was walking on a Chennai street, couple of cops in plain clothes drove past, snatched his mobile phone and asked him to come to the police station. they assured him they were aware of all the intimidations from Aditya. By the time he reached the police station, things changed.

He started getting pressurized to confess to "a crime" he never committed. His refusal to confess to a crime he never committed only made the things worse for him.

Has Yogi siphoned away money?

Was he running away from any enforcement agencies or the debtors?

Has he ever threatened and visibly intimidated the vendor and his family?

How will he protect his own family when he is locked inside the jail, and those announcing ways to intimidate his wife and kids (on Facebook) are out in the open?

If the answer is none of the above, then why on earth has he been locked up in jail for a week, away from his wife and two children?
Of course the judiciary will eventually get to the bottom of this case after a fair trial, and God willing, Yogi will walk out of the jail. But what Yogi and his family are going through now make India look like the worst place, a nightmarish choice to become an entrepreneur. He has not had a bail hearing despite being jailed for 7 days. This is already had global repercussions and besmirched India's reputation in Silicon Valley and elsewhere.

We are standing up together as a community and believers in the vision of Honble Prime Minister, Shri. Narendra Modi for "Startup India. Stand-up India" to call for a free and fair investigation into the dispute and strongly oppose any abuse of power to subvert the law of land. We humbly request you to look into this matter and ensure that expeditious justice is provided to Yogi.