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The Rot Inside India’s Startup Dream

Even before the wounds from BYJU’S could heal, India’s booming startup ecosystem saw a series of startups like BluSmart and GoMechanic bite the dust. So, what felled the Goliaths of the world’s third-largest startup ecosystem?

The Dark Side Of Growth: From money laundering to number fudging and alleged accounting frauds to corporate governance lapses, a wide spectrum of graft practices in late-stage startups have come to the fore, sending shockwaves through the home of over 100 unicorns, and questioning the credibility of everyone – from the founders and innovators to investors and auditors.

Cracks Underneath The Unicorn Glow: Inc42 probed the decline of some of the biggest brands. Be it BluSmart or Log 9, there was a common pattern in all the startups on the erring side. The push for growth-at-all-costs in an essentially slowed investment environment or rush to raise funds from investors forced the management to adopt unethical practices in every instance.

The Playbook Of Deceit & Fib: The methods commonly employed by the bad actors include dressing up account books with fudged sales figuresinflating revenues, exaggerating consumer-centric metrics, syphoning money to parties and creative accounting by hiding the operational costs. And, after all this, putting a simple disclaimer on the balance sheet to get away with the malpractices.

Build To Last: Investors and auditors are waking up to check if the guardrails should be raised further around fundraising by startups and foster an environment where India must not haste towards building 100 unicorns every year, rather build startups that can last for decades.

So, what’s plaguing the Indian startup ecosystem? Let’s find out…

From The Editor’s Desk

Weekly Funding Skyrockets: Indian startups raised $587 Mn across 27 deals last week, marking a 9X jump from the $54.7 Mn bagged by 15 startups in the preceding week. Porter became the second unicorn of 2025.

Patchy Week For New-Age Tech Stocks: Thirteen out of the 33 new-age tech stocks gained in a range of 0.01% to nearly 22% this week, while 20 stocks ended the week 0.02% to about 13% lower. ideaForge emerged as the top gainer despite reporting another quarter of loss in Q4 FY25.

ixigo Suspends Services To Turkey, China: The online travel aggregator has suspended flight and hotel bookings to Turkey, China and Azerbaijan after they expressed solidarity with Pakistan following India’s military strikes on terror camps in the neighbouring country.

129 BluSmart Cabs To Be Seized: The Delhi HC has ordered the seizure and relocation of 129 EVs, following a petition by lender STCI Finance. The lender filed a suit against Gensol to recover INR 11.25 Cr and restrain the latter from creating any third-party rights for the EVs.

Pincode Reloaded: PhonePe’s Pincode has re-entered quick commerce, targeting growth via local retail tie-ups over dark stores. With 600 Mn users, 40 Mn merchants, and a new model, it aims to scale despite stiff competition, early losses, and limited traction.

More Flexibility For AIF Co-Investments? SEBI has proposed allowing more flexibility for investors to co-invest with alternative investment funds. The regulator has suggested scrapping the prohibition on AIF investment managers to provide advisory services in listed securities.

Fighting The Misinformation Menace: As tensions between India and Pakistan escalated last week, there was a proliferation of fake videos and fabricated stories online. So, how can Indians deal with the misinformation issue that has been plaguing India for years now?

The Indo-Pak Conflict & Markets: The escalating tensions between India and Pakistan last week sent the markets and the new-age tech stocks into a tumble and into a potential bearish territory. So, what does this mean for retail investors and startups looking at an IPO?

Inc42 Startup Spotlight

Can BeastLife Crack The Code To India’s Crowded, Low-Trust Fitness Market?

Most Indians don’t consume enough protein daily, and the market isn’t helping either. It’s flooded with low-trust supplements, unclear value propositions, and a lack of credible homegrown brands. This is precisely what Gaurav Taneja, a YouTuber who goes by the name of The Flying Beast, wants to change.

A Beast Is Born: The fitness influencer launched BeastLife to offer high-quality whey protein, mass gainers, and creatine, all sold via its website, ecommerce and quick commerce channels. With rising fitness awareness among Indians and a growing demand for clean, effective supplements, there’s a major gap that BeastLife aims to bridge in India’s health and nutrition market on track to cross the $10 Bn mark by 2030.

A Promising Story? BeastLife claims to have crossed INR 50 Cr in annual GMV, INR 35 Cr in gross sales, and hit EBITDA profitability in its very first year (FY25). Its early traction is promising, but long-term success will depend on how well it can grow beyond Taneja’s fan base. Can it crack the code to India’s crowded, low-trust fitness market?