Housing.com CEO withdraws resignation amid boardroom drama, apologises to investors
The controversial co-founder and CEO of Housing.com, Rahul Yadav, withdrew his resignation after a crucial board meeting on Tuesday, a few days after sending in his resignation in which he scornfully called fellow board members and investors "not intellectually capable". In the letter, signed on April 30, he had asked the board of the online property search startup to look for a replacement within a week.
In the highly anticipated board meet, which had taken up many issues including the young CEO's fate, the investors and Yadav came round to working together which resulted in latter's withdrawal of resignation.
"Today the Housing board met and has been reconstituted to include all main shareholder representatives. After some good conversations the board has reaffirmed its faith in Rahul Yadav's vision at Housing," an official statement from the company said.
Yadav has also apologised for his scornful remarks against the investors.
Yadav said in the statement: "After some frank and healthy discussions with the board, I have agreed to withdraw my resignation and I apologise for my unacceptable comments about the board members. I look forward to staying on at Housing as CEO and building an even greater company, while working in full harmony with the board."
Previously, in a short two-paragraph resignation letter dated April 30, which was first reported by The Economic Times, 26-year old Yadav had written:
Dear board members and investors,
I don't think you guys are intellectually capable enough to have any sensible discussion anymore. This is something which I not just believe but can prove on your faces also! I had calculated long back (by taking avg life expectancy minus avg sleeping hrs) that I only have ~3L (hours) in my life. ~3L hrs are certainly not much to waste with you guys!
Hence resigning from the position of Directorship, Chairmanship and the CEO position of the company. I'm available for the next 7 days to help in the transition. Won't give more time after that. So please be efficient in this duration.
The newspaper said on Tuesday, citing unnamed sources, that the investors led by SoftBank are forming a new five-member executive committee which would be directly involved in monitoring financial and business operations of the company on a weekly basis. Yadav is to take all key decisions with the approval of this committee which would be headed by SoftBank's new board representative Jonathan Bullock. It said the other members of this committee have not be finalised.
SoftBank is the single-largest shareholder of Housing.com.
The board meet on Tuesday was to take the issue of leadership at the firm besides new nominee directors as also the future course of strategy.
In a separate email to employees sent during the weekend, reviewed by VCCircle, Yadav claimed that Housing.com now draws the same web traffic as two legacy players in the business—MagicBricks and 99acres.
Here's his email:
"History is created whenever mankind Looks Up"
In Classifieds/Marketplaces, size is the moat. Never in the history of Online Real Estate has an anti-incumbent gone ahead and won!
Everyday you see new startups coming up in US, UK etc markets and still Zillow, Rightmove etc remaining untouched.
But in India, history has been created!
Yes. In March we came very close and in April we've beaten 8-9 yr old, burden on the society, MagicBricks & 99acres.
Housing's Traffic in April: 11 Mn+ (MB: 6 Mn, 99acres: 4.5 Mn) (Excluding IREF's traffic) Housing's App download: 1 Mn+ with 4.2 rating (MB & 99acres both are 500k+ with lower ratings)
We're almost 2x of these players and we've no plans of just staying here. We're marching towards being the 10x player by the year end!
Starting so late in such a hyper competitive space and still winning in such a short time is an historic achievement! It's the hard work and contribution of all the teams together that has made it possible.
So congratulations on this victory and becoming the No. 1 player in Indian Online Real Estate!
Yadav withdrawing his resignation letter puts a temporary breather to a two-month-long saga that started with his fairly public spat with a prominent venture capital investor and alleged misreporting by a media house which owns a competitor site, followed by a defamation legal notice.
Early this year, Yadav, one of the dozen IITians who set up the property listing site in 2012, sparked what became a public spat, writing an email to Sequoia Capital's MD Shailendra Singh calling him 'inhuman and unethical', that was leaked on Quora. The issue was related to a job offer made by Singh to a Housing.com employee.
While the letter was subsequently removed from Quora, Yadav went on to pour out more aggression on the Q&A-based networking platform making a string of personal remarks against Singh.
However, the brewing trouble with investors was visible at that time itself. With The Economic Times reporting, citing unnamed sources, that Yadav may be asked to step down as CEO by investors, he said investors do not have 'any say' in the company and he takes all decisions.
"There is no basis to these rumours. Rahul continues to lead the company as CEO," Ashish Gupta, senior managing director of Helion Venture Partners, had told VCCircle, back then.
Later Yadav took on Times Group claiming that MagicBricks, a real-estate broker site owned by Times Internet Ltd., a separate business of the parent of Times Group and a competitor to Housing, is raising funds and is out to "malign" Housing. He marked this mail to all employees of the startup.
This was followed by Bennett, Coleman & Co. Ltd, the holding company of Times Group, sending a legal notice to Housing.com owner, Locon Solutions Pvt Ltd., and the board for alleged defamation. The notice asked Rahul Yadav and the directors of the company to issue an unconditional apology, and also sought Rs 100 crore ($16 million) in damages.
In an unrelated development last month, SoftBank vice chairman Nikesh Arora, who led a string of large investments for the Japanese firm in Indian tech firms, including Snapdeal, Ola and Housing.com, had resigned from the board of Housing.com as well as the two other Indian firms.
Housing.com had raised fresh money last December with telecom and internet giant SoftBank leading the $90 million funding round along with New York-based hedge fund Falcon Edge Capital and existing investors. SoftBank invested the capital through SoftBank Internet and Media, Inc (SIMI), a new unit created last year with former Google hotshot Arora as its head.
Both Housing.com and BCCL's MagicBricks compete with PropTiger.com. News Corp, which picked a 25 per cent stake in PropTiger last November, also acquired Mosaic Media Ventures Pvt Ltd, the parent of this news website in March.
The online property listing and broking space has been red hot with several funding transactions, people movement, acquisitions and entry of new players in the business.
(Edited by Joby Puthuparampil Johnson)