news . TekChakra.com

It seems Sequoia Capital India’s MD, Sumir Chadha has now been put in an uncomfortable spot regarding their investment in India in two competing business models - Fropper.com and Minglebox - over an interview with CNBC TV18 and by VC Circle. Minglebox.com whose CEO Kavita Iyer is married to one of the managing directors (Sandeep Singhal) of the VC firm. About a month ago TechGoss had “reliably learnt that the key players in Sequoia, USA have asked for all papers relating to Sequoia, India financing of particular websites.” Chadha has said that although these two business models may look to be similar and competitive - they are not, and each have their niche audience. It is of my opinion that there may be some truth in this - as Fropper was initially launched as an India dating site, but is is now slowly evolving to incorporate Social Networking features… which may eventually lead it to becoming a competitor with Minglebox - and appealing to the exactly same target audience ( there is definitely a large overlap already). As a policy, most VC companies don’t invest in competing business models - to protect their and their invested company’s interests, and in the spirit of good business practice. Since VCs have access to inside critical data of companies invested in, this could be used unfairly to promote a biased choice - in this case Minglebox founders may just get access to critical data of Fropper.com that has been around for almost 5 years.

— Vishal L    Filed under: Venture Capital