Taking cues from some of the most dramatic conundrums, meltdowns and discords of the recent past, Inc42’s 2025 Year In Review would be incomplete if it skipped the commotion that has defined the year so far.
What unfolded during the year wasn’t just a series of isolated controversies, but a pattern of moments that exposed where India’s startup ecosystem continues to stumble.
Unlike 2023, which grappled with governance issues, or 2024, a year dominated by FIRs, heists, courtroom drama and founder-investor brawls, 2025 has been the year of full-blown public meltdowns and regulatory flashpoints. Founders, regulators, platforms and the public collided in real time.
What makes 2025 distinct is the speed and scale at which some of these controversies unfolded, triggering consequences like arrests, asset freezes, ban from public markets, public apologies and abrupt leadership exits.
With 2026 approaching, we round up the controversies that dominated headlines and group chats, trended across social media, unnerved investors, and forced the ecosystem to confront uncomfortable questions.
Without further ado, here’s a look at the controversies that rattled the Indian startup ecosystem in 2025.
Recently, a YouTube channel called Trustified, which tests food products, posted a video claiming that Eggoz’s eggs contain a chemical linked to cancer. The video went viral, raising concerns among the masses.
Trustified tested Eggoz’s eggs and said they found traces of banned antibiotics (nitrofurans), which are not allowed in India because they may cause cancer.
Eggoz’s founder Abhishek Negi strongly denied the claims, stating that the eggs are safe and that the company will release an independent test report to prove it.
In his defence, the founder added that Eggoz does its own lab tests every few months, and their recent report also showed very small traces of the same antibiotics, but within India’s permissible limits.
At the end of November, real money gaming platform WinZO landed in a full-blown storm after the Enforcement Directorate (ED) arrested its founders, Saumya Singh Rathore and Paavan Nanda, for money laundering. The duo, who were hailed as top founders of the gaming industry, were taken into custody in Bengaluru, following hours of questioning.
The arrests stem from a series of allegations levelled by the ED after raids on WinZO. According to investigators, WinZO allegedly held INR 43 Cr belonging to gamers that should have been refunded once India banned real-money gaming in August 2025. Instead, the agency claims the company restricted or delayed withdrawals while continuing to operate real-money games abroad (in Brazil, the US, and Germany) via the same platform used in India.
The ED also alleged that WinZO used ‘unscrupulous’ algorithms that made customers play against software instead of real users, without informing them. According to the agency, this practice helped the platform generate illegal betting proceeds. Assets worth INR 505 Cr in bonds, FDs, and mutual funds have been frozen under the Prevention of Money Laundering Act.
WinZO has rejected the charges, calling fairness and transparency central to its platform and asserting full compliance with the law. But, with its founders under arrest, customer funds frozen, and its core business model questioned by investigators, the controversy around WinZO has escalated into one of the gaming industry’s most serious legal crises to date.
Looking back at 2025, one of the year’s most dramatic startup controversies unfolded far from boardrooms, at the arrival gate of Delhi International Airport. It was here that Dataisgood founder Ankit Maheshwari was detained the moment he stepped off an international flight, before being flown overnight to Kolkata. The incident capped months of simmering allegations and became one of the most talked-about flashpoints in India’s edtech sector.
The story begins in May 2025, when an FIR was filed in Kolkata by Kantika Mukherjee, a deputy director at LawSikho, part of the Skill Arbitrage group that acquired Dataisgood in 2023.
The complaint accused Maheshwari, cofounder Shishir Singh, and others of cheating, criminal conspiracy, misusing investor funds, and even stealing data. As the investigation picked up speed, courts rejected back-to-back anticipatory bail pleas.
The Supreme Court gave the founder three weeks to surrender. By late September, he was in police custody in Kolkata, even as his family maintained that the allegations were ‘motivated’.
As Inc42 reported earlier, after acquiring Dataisgood, Skill Arbitrage soon discovered that the latter had disclosed only a fraction of its problems.
Beyond the two legal disputes mentioned during due diligence, the startup was entangled in multiple refund claims and allegations of fake job guarantees. Verification checks exposed a trail of false promises, including job guarantees and fabricated alumni stories.
The BluSmart story became one of those startup sagas where admiration, doubt and disbelief all collided in real time. For years, the Jaggi brothers, Anmol and Puneet, were celebrated as the poster boys of clean mobility, the founders who dared to build an electric ride-hailing company when Ola and Uber stuck to their asset-light playbook. But as the year unfolded, skeletons started to fall out of their closet.
The BluSmart controversy exploded after SEBI’s investigation into Gensol exposed how deeply the EV startup was entangled with the Jaggi brothers’ alleged financial misconduct. Trouble began when BluSmart defaulted on its non-convertible debentures. Instead of acknowledging any impact, Gensol, run by Anmol and Puneet Jaggi, dismissed the red flag, claiming its own finances were perfectly healthy.
SEBI soon discovered the opposite. Gensol had itself defaulted on multiple loans, and far more damagingly, the Jaggi brothers had allegedly syphoned off company funds for personal use (buying a luxury apartment at DLF’s The Camellias, investing in Ashneer Grover’s Third Unicorn, and routing money to private promoter entities). More than INR 260 Cr from a massive EV fleet financing deal was found unaccounted for.
What turned the issue explosive was BluSmart’s central role. As a related party dependent on Gensol’s capital, its default triggered the entire probe, exposing how tightly the Jaggi brothers had intertwined the two companies
The Medikabazaar saga became another example of bruising founder–investor battles as a whistleblower complaint spiralled into public allegations, courtroom drama, and a CEO’s dramatic fall.
What began as an anonymous tip about financial irregularities quickly snowballed into a governance war. The board hired an external investigator, sidelined cofounder-CEO Vivek Tiwari, and eventually fired him, declaring an “Event of Default” and stripping him of his promoter rights.
Tiwari hit back, accusing Medikabazaar’s marquee investors, HealthQuad, Creaegis and AvH, of orchestrating a plan to oust him. He alleged coercion, lack of transparency, and a board that pushed him out before the appointed investigator even submitted its report.
The board, meanwhile, accused him of governance failures, inflated metrics and financial misreporting. The claims were allegedly supported by PwC’s findings, which included overstated GMV and circular sales through multiple entities. These concerns later fuelled an INR 278 Cr indemnity claim from investors.
Listed startup DroneAcharya also came under the spotlight for all the wrong reasons this year. The controversy erupted in November after markets regulator SEBI completed a months-long investigation into the company’s finances and IPO disclosures.
According to SEBI’s findings, a significant portion of DroneAcharya’s reported revenue for FY24, roughly a third, did not exist in reality. Much of this ‘income’ was booked from just two clients who, upon scrutiny, were found to have never received any drones or services.
Several addresses linked to their customers turned out to be ordinary residences or small neighbourhood shops. Once these inflated sales were removed, the company would have actually posted a loss instead of the profit it had claimed.
The investigation also revealed that money raised during DroneAcharya’s IPO was not used in the way the company had promised. The prospectus had stated that nearly INR 28 Cr would go towards buying drones and accessories to expand operations.
In reality, only a fraction of that amount was spent on the intended purpose. The rest was diverted into fixed deposits, questionable software purchases, and payments routed through related entities.
Beyond the financial irregularities, SEBI flagged the company’s habit of making exaggerated or misleading announcements after going public. Small partnerships were projected as major deals, and minor MoUs were portrayed as transformational wins. The regulator concluded that these announcements appeared to be timed and designed to boost the stock price artificially, enabling early investors to exit at inflated valuations.
In the end, SEBI barred the company’s promoters from accessing the securities market for up to two years and imposed monetary penalties.
In the middle of the India-Pakistan conflict earlier this year, two prominent online travel firms, EaseMyTrip and MakeMyTrip, got into a full-blown war.
The confrontation started as EaseMyTrip cofounder Nishant Pitti publicly alleged that MakeMyTrip was under significant Chinese influence, which posed a national security risk. His claims came at a sensitive time when public sentiments were sharply against China, Turkey and Azerbaijan following their support for Pakistan when India launched Operation Sindoor.
Pitti asserted that MakeMyTrip, which handles discounted ticket bookings for Indian armed forces personnel, could potentially expose sensitive travel data to China. He argued that because Chinese travel giant Trip.com (formerly Ctrip) holds a major stake in the Nasdaq-listed company, Indian soldiers’ route and date details could be compromised.
He escalated the accusation by posting that five out of MakeMyTrip’s ten board members have Chinese connections, and that three out of the four strategic board committees were led or influenced by directors with Chinese affiliations.
MakeMyTrip dismissed these allegations as “malicious or motivated,” stressing that it is a proud Indian company founded and run by Indians, and that it complies fully with Indian laws and data-privacy norms. The company emphasised that its global shareholder base, including Trip.com’s 45.95% stake, has no impact on its independence or data governance.
The dispute intensified when Pitti claimed that a recent board appointment did little to change what he called the “deep-rooted structure of Chinese-backed influence”. MakeMyTrip responded by rejigging its corporate structure and raised $3 Bn to buy back a large portion of its shares from Trip.com Group.
Earlier this year, blockchain investigator ZachXBT exposed suspicious fund movements, forcing CoinDCX CEO Sumit Gupta to admit that the exchange had suffered a major security lapse.
Around $44.2 Mn, or INR 380 Cr, worth of crypto assets across USDT, SOL and ETH were syphoned off by hackers. This incident follows last year’s massive $234 Mn WazirX hack.
CoinDCX clarified that the stolen funds belonged to its operational treasury, not user balances, and that all customer assets remained safe. But the scale and method of the breach sparked scrutiny.
The attack stemmed from the compromise of an internal operational wallet used solely to provide liquidity on a partner exchange. This wallet, though isolated from customer holdings, was vulnerable to server-side exploits, allowing attackers to bypass authentication controls and drain funds.
In an aggressive counter-move, CoinDCX announced India’s largest Web3 recovery bounty, offering up to 25% of any retrieved funds to white hat hackers who could help identify the attackers or trace the money trail.
The government came down heavily on a few OTT platforms this year. The centre banned 25 OTT platforms and websites on the grounds of hosting ‘obscene, vulgar and pornographic’ material. While the government had previously taken action against similar platforms, this time the ban came with stronger warnings to intermediaries like ISPs and digital platforms.
The government said that these OTT apps were repeatedly violating multiple laws, including Sections 67 and 67A of the IT Act (which criminalise publishing sexually explicit material), Section 294 of the Bharatiya Nyaya Sanhita, and the Indecent Representation of Women Act.
The information and broadcasting ministry (MIB) said the platforms ignored earlier warnings and continued to push explicit content without filters, age-verification or compliance with the IT Rules, 2021.
Zomato CEO Deepinder Goyal’s Continue Research sparked a storm after unveiling its first hypothesis, Gravity Ageing, which claims that gravity’s lifelong pull reduces blood flow to the brain and may be a major driver of ageing.
While the idea brought massive attention, it also triggered intense criticism from doctors, scientists, and fitness experts, many of whom called the hypothesis untested, unscientific, and designed to justify a product.
The controversy escalated further when images of Goyal wearing a device called Temple surfaced online. The device measures cerebral blood flow (CBF).
Critics accused Continue Research of pushing a speculative theory to sell a consumer health device. The pushback was strong enough that Goyal publicly apologised and released a more detailed explanation of the hypothesis.
Despite the scepticism, Continue Research maintains that gravity is one possible contributor to ageing, not the only one, and that Temple could still be a useful tool even if the hypothesis doesn’t hold.
Bira 91 also became the Indian startup ecosystem’s cautionary tale in 2025. The alcobev brand, which once symbolised India’s craft beer revolution, is now tangled in allegations of financial mismanagement, founder excess, and investor revolt.
At the centre of the storm sit serious accusations that founder and CEO Ankur Jain, his mother Shashi Jain, and his wife Ankeeta Pawa, all serving on the company’s board, voted to waive the recovery of excess remuneration paid to themselves. This triggered a full-blown governance crisis as investors claimed that the move violated the Companies Act, 2013.
These allegations surfaced even as the company was navigating a forced conversion from private to public limited entity, a transition that disrupted state licences and brought operations to a grinding halt for months.
The fallout escalated quickly. Investors, including Kirin Holdings and Anicut Capital, moved to seize assets, starting with The Beer Cafe – Bira91’s only profitable business. Jain responded by filing a plea in the Delhi High Court, calling the takeover unethical and illegal, setting the stage for a protracted legal battle.
But the distress wasn’t confined to boardrooms. Employees wrote to government agencies, alleging massive pending dues.
The startup workforce accused the management of downplaying the severity of the crisis, while vendor payment mounted, painting a picture of a company whose internal controls had collapsed even as its public image remained intact.
While BYJU’S entered 2025 with a myriad of legal issues, founder Byju Raveendran initiated a renewed campaign to defend himself and his family’s name.
Fresh skeletons started falling out of the closet when an anonymous whistleblower brought to the fore a major conspiracy, resulting in the crumbling edtech giant.
The allegation was that BYJU’S IRP Pankaj Srivastava had hired EY India to advise on the insolvency proceedings even though the audit firm had a conflict of interest, as it had been working alongside the lenders of BYJU’S on a related matter.
Basis detailed evidence that the whistleblower complaint brought to light, Raveendran alleged that he has documents that show “conclusive evidence of criminal collusion” between EY India, the lenders and Pankaj Srivastava (IRP).
As of now, BYJU’S assets are up for purchase, with potential bidders, including upGrad and Manipal Education.
Amid this, BYJU’S had to sell its US subsidiaries Tynker and Epic!. It also lost control of its most valued possession, Aakash Education.
Meanwhile, a US court hit founder Byju Raveendran with $1 Bn in damages in a dispute linked to BYJU’S US subsidiary and the contested $533 Mn. However, in some respite towards the end of the year, the court reversed the default ruling.
Quick to latch on to this, Raveendran’s camp termed the ruling as vindication. His legal team accused BYJU’S lender, Glas Trust, and certain lenders of mischaracterising facts across multiple jurisdictions.
Indian quick commerce giants faced backlash as users accused Zepto, Blinkit and Swiggy Instamart of using “dark patterns” and opaque algorithms to manipulate prices and checkout behaviour.
Customers reported fluctuating prices for the same products based on location, time, device type (Android vs iPhone), and even past behaviour, alongside hidden charges such as packaging fees, handling fees and small-cart surcharges that appear only deep into the bill summary.
The anger grew as users began flagging issues such as differential pricing, misleading ‘free cash’ offers that couldn’t be redeemed, default tipping, auto-added items, and discounts that allegedly masked prices higher than the MRP. What appears as convenience and speed, critics argue, is increasingly driven by algorithmic nudges that compromise consumer choice and transparency.
For context, dark patterns in quick commerce refer to deliberate design and pricing tactics used by platforms to subtly manipulate users into paying more or making choices they may not have made otherwise.
The controversy around Urban Company’s 15-minute house-help service erupted over both language and labour economics. When the company launched the feature under the name ‘Insta Maids’, it immediately drew flak on social media and from worker unions, who argued that the term “maid” is outdated, gendered, and demeaning, reinforcing class hierarchies rather than respecting domestic work as skilled labour.
The outrage took a stronger turn when details of the pay structure surfaced. Urban Company clarified that the base pay for short tasks could be as low as INR 49 per hour, even as the platform promoted the service as a way to “formalise and uplift” domestic work. Labour groups and gig worker unions called this exploitative, arguing that the micro-tasking model prioritises customer convenience while pushing workers into high-pressure, low-paying, hyper-short jobs that offer little income security.
Facing criticism, Urban Company rebranded the service to ‘Insta Help’, admitting it underestimated the cultural and social weight of the original name. While the company defended the model by claiming workers could earn higher hourly rates over longer jobs and receive benefits like insurance, critics said the rebrand addressed optics, not the core issue.
For many, the episode became a flashpoint in India’s broader gig economy debate, where dignity, fair wages, and ethical platform design remain unresolved, despite polished messaging and quick course corrections.
During its public listing, Lenskart’s IPO faced criticism on valuation versus fundamentals. While the $821 Mn public issue was fully subscribed within hours, signalling strong investor appetite, the pricing raised red flags about whether Indian startups are going public at inflated valuations.
Despite Lenskart’s scale and brand strength, the IPO was priced aggressively at a time when many consumer tech startups were still grappling with profitability and margin pressures. This also sparked concerns that public market investors, especially mutual funds managing household savings, may be overpaying for growth narratives.
The debate intensified after DSP Asset Managers publicly defended its anchor investment in Lenskart, even while admitting the IPO was ‘expensive’. On social media, critics questioned whether fund managers were repeating past mistakes seen during the 2021–22 IPO boom, when heavily hyped startups like Paytm and Zomato (now Eternal) listed at lofty valuations only to deliver poor post-listing returns.
