Bengaluru-based milk delivery startup Doodhwala has been in the news over the past week with vendors filing an FIR against the company for unpaid dues. While reports state that the company has shut operations and that its founders are ‘absconding,’ Ebrahim Akbari, the co-founder of Doodhwala, told TNM that the company has not shut operations. He claims that the startup has merely stopped its Business-to-Customer (B2C) wing and handed it over to Freshtohome.
Bengaluru-based Doodhwala, which was founded in 2015 by Aakash Agarwal and Ebrahim, announced in October that it was handing over its delivery operations to Freshtohome, an online fish and meat retailer. Doodhwala was founded as a subscription-based grocery delivery service, with its main focus on early morning milk delivery. It is owned by Banger Tech and last raised $2.2 million last February from Omnivore Partners.
There are now allegations that the company hasn’t paid its employees, and even has FIRs registered by employees and vendors due to non-payment of dues.
Ebrahim claims that the company has not shut shop and has shut only its B2C wing, but employees of Doodhwala have been asked to leave. According to employees TNM spoke to, trouble began around May when talks to fund-raising with a US-based investor did not go through. Salaries of employees were delayed due to this in June.
Dues to employees
Radha Krishna, who was the merchandising head for Doodhwala has filed a complaint against the founders on October 22 over unpaid salary from July-September. He claims that he is owed Rs 2.88 lakh.
According to Sunny, who worked as a software developer at the company, signs of a fund crunch could be seen since June. Sensing this, he quit the company by the end of June but is yet to receive his June salary.
Another employee in the tech team told TNM that they did not receive their salaries since July and as of September, were asked to leave the company. The employee, who wished to remain anonymous, says that despite several follow-ups, he is yet to receive his salaries and is owed over Rs 3 lakh.
“We were told that this is the end of the road for the company but were assured that our salaries will definitely be paid. But nothing has happened. We received emails that the company is working on resolving the issue. In September, they said it will come by October, then they said November, but now they're saying we are looking into it,” he added.
In his team alone, around 11 employees are owed roughly Rs 3-5 lakh each on an average. And the story is similar across teams.
Speaking to TNM, Radha Krishan says that when June salaries were delayed, they were told that it was only because of delay in getting funding and asked us to keep working for the company and that salaries will be paid from next month, but we didn’t get paid.
“They didn’t tell us that the business would shut. If we knew they were shutting down, why would we continue to work there? I worked so hard for the company, but is this how they treat us? I had an idea about how sales are happening but didn’t know what founders were talking to investors. It bothers me because I have a lot of experience in this field and was so involved in the company, but they didn’t inform us. They only keep giving us false hopes. Business is still continuing, but what about employees? What happens to them. It is not fair,” he adds.
As per Radha Krishna, around 60-70 employees have not been paid.
“They said we have the money, it’s only about disbursing, then they said there are no funds. There is no clarity. And we have also heard that the tax and PF they were deducting from our salaries were not paid to the government,” said another employee, who says that HR has not been responding to his emails since mid-October.
Vendors not paid either
Vendors, too, have a similar story to tell. The company reportedly owes vendors nearly Rs 6 crore in total, as per an Inc42 report. A group of vendors has even taken the matter to the police and filed a first information report at the Ulsoor police station in Bengaluru against the founders.
One vendor Manjunatha K, who owns a company called Adern Creamery Pvt Ltd, supplied milk to the startup. In his complaint, he said that the founders have not paid him his dues for the milk he supplied between June 1 to September 12, which amounts to Rs 17,42,000. As per his complaint, on September 15, Doodhwala gave him a check of Rs 9.6 lakh, which bounced.
Rahul Partners, managing partner at Lokal Buzz Events and Promotions, told TNM that the company had done some promotional activities for Doodhwala, for which it had submitted 8 to 9 invoices, out of which four are pending. Doodhwala owes Lokal Buzz Rs 1.38 lakh, which it hasn’t paid for the last six months.
“We were following up with the marketing team, who told us that they themselves didn’t get salaries and that the situation is very bad. Then we connected with the co-founder via email to which he responded assuring us that our dues will be cleared. But we still haven’t received our dues. I sent a follow-up mail 3-4 days back and mails are being bounced. When we visit their office, they say no one is working here now,” Rahul says.
Rahul added that since the amount due was not a lot, the company is not pursuing legal action against the company but says that he isn’t sure if the company intends to clear their dues.
Shrey Kumar, co-founder of Advik foods, which used to supply camel milk to Doodhwala says that it was getting good traction via Doodhwala. It received one payment from the company, after which payments didn’t come.
“After a few orders, we asked for the payments but continued supplying thinking it was a routine delay. But we eventually supplying when we didn’t receive any payments. We were getting hints that something isn’t right from employees. Whoever we were in touch with was leaving the company. Then we heard after a month that the company shut operations,” he says.
Advik Foods says that the company was responsive initially but has stopped replying recently. “The best thing was that a month ago, we received an email from one of the co-founders that they are going through tough times and are trying their best to clear our dues. It was a good gesture. As a startup we understand sometimes there may be a shortage of funds,” Shrey added.
And it’s not just employees and vendors, a look at the social media pages of Doodhwala shows several disgruntled customers who haven’t received orders and refunds. Several users also complained of their money getting stuck in Doodhwala’s wallet after it handed over operations to Freshtohome.