manish maheshwari: Former Twitter India head’s startup Invact Metaversity stares at shutdown

Maheshwari’s ‘irreconcilable differences’ with co-founder Tanay Pratap is said to be the reason for the move, according to an email that Pratap sent to investors on Sunday evening detailing the crisis as well as multiple people aware of the development.

Invact Metaversity is also considering reducing its workforce in the coming weeks, the sources told ET.

ET has reviewed Pratap’s note, in which he also says Maheshwari had rejected an offer by the company’s investors to exit.

Maheshwari and Pratap, who founded the company in October last year, have had differences of opinion over the vision and execution of the startup and have brought these issues before their investors.

“There was a breakdown in discussions between the two of us due to irreconcilable differences,” Pratap said in the email.

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In a series of tweets on Monday, Maheshwari also said that the company was at a ‘crossroads’ and was exploring several possibilities, including returning capital to investors.

“As we started testing the early version of the Metaversity platform with students, it became apparent to us that the immersive classroom and the community experience were not getting delivered at a level that we had envisaged … We therefore cancelled the course before it began. Any fee paid by students was fully refunded along with interest and unqualified apology,” he wrote on the microblogging platform.

“We are now standing at crossroads exploring possibilities such as (a) cutting the burn rate and pivoting to another idea, (b) letting one of the founders take full charge, or (c) returning the unspent capital to investors,” he added.

According to Pratap’s email, Maheshwari – who had worked at Flipkart previously – fired the business team during the week of May 16. He directed Pratap – who is its chief technology officer – to fire the technology team before the end of the month, as a potential sale or acqui-hire and settlement between the founders wasn’t working out anymore.

Pratap and Maheshwari declined to comment, while the company did not reply to ET’s queries till press time Monday.

On Maheshwari rejecting the settlement proposal, Pratap said in the email that he, as a director of the company, “was not consulted on this rejection of the offer, as a result, I am unaware if this decision has been taken by Manish in his position as a director, as a CEO, or as a common stockholder, and reserve the right to seek legal recourse for the same.”

According to the email, Maheshwari’s vested stake was pegged at 5.8% and investors offered the former Twitter executive $87,000 to exit.

Sources said the company was unable to find buyers over the past few weeks.

Pratap also added that the company’s executive management was also acting ‘unilaterally’.

“As a director I strongly object to how the current executive management of the company is acting unilaterally; however, I am also appointed to the board at the mercy of the majority of common stockholders, (i.e., Manish) and am hence potentially vulnerable to being removed from this position in case of dissent. Given my duty to you as minority investors who have entrusted this company and management with your personal wealth, I lay these facts before you for your perusal,” he said.

Invact Metaversity raised $5 million in February led by Arkam Ventures and investors including Antler India, Picus Capital (Germany), M Venture Partners (Singapore), BECO Capital (Dubai) and 2amVC (US), valuing the startup at $33 million.

The platform offered a 16-week ‘metaMBA’ programme designed to improve employability of its students and provide an affordable university-like space on the metaverse.

ET reported in January that Protonn, a startup founded by former Flipkart executives, had shut down after not being able to find the right product-market fit and as founders had not agreed to pivot its business model.