Roomi’s fall from grace: Major layoffs follow allegations of frivolous spending and nepotism

Family affair

Several people with knowledge of the matter told VentureBeat that Yadav employed several close family members at the company’s Indian office, which Roomi confirmed to VentureBeat.

“Three family members have been hired in the Delhi office from a total of 10,” chief operating officer (COO) Alex Larsen said, “all of whom were interviewed by me and passed the official processes. India is a tough market to manage remotely for many reasons, and we needed people who were skilled but also who we could trust in that office.”

However, multiple former employees said that one of Yadav’s family members was accused of sexual harassment by a female employee who has since left the company. Though we have not been able to confirm the exact nature of the allegations, the consensus from our sources was that there was more than one instance of alleged harassment reported by the employee, and that the allegations were not treated as seriously as they should have been. When we asked Larsen about this matter, he said there was only one “isolated” report of harassment that was sent to HR before being sent to him, and he insisted that the matter was handled appropriately.

Larsen said:

We were made aware of one isolated report of an inappropriate comment being made to an individual. We took the issue very seriously, as we would do in any such instance, and worked immediately to deal with it through the correct disciplinary procedures. We do not condone this behavior.

The individual was given a formal verbal warning and told they would be fired if it happened again, required to take formal training, and had follow-up meetings with HR to confirm what they had learnt. I oversaw the disciplinary procedures and kept Ajay informed on how we were managing it. No other incidents have ever been reported.

Separately, multiple ex-Roomi staffers told VentureBeat that Yadav’s fiancée was on the payroll for up to a year, even though she carried out no official duties for the company. When asked about this by VentureBeat, Roomi issued the following statement:

Ajay’s fiancée has never been a full-time employee, but she was contracted on a part-time basis to manage some room listings, as well limited work on social media channels.

However, nobody that we spoke with had first-hand knowledge of Yadav’s fiancée carrying out any work in the aforementioned fields. One person I spoke with said that his fiancée may have periodically posted some content to Yadav’s personal Instagram account, though we have not been able to independently verify that claim.

Multiple people, who again spoke on condition of anonymity, also said that Yadav’s fiancée had traveled to Kenya for a trip on Roomi’s dime. Larsen vehemently denied this allegation. “This is false,” he said. “None of Roomi’s funds were ever used to pay for a trip that Yadav’s fiancée went on to Kenya.”

According to Larsen, Roomi did sponsor half the cost of a trip for Yadav’s executive assistant as part of a social impact cause, but although Yadav’s fiancée traveled too, Larsen said she paid her own travel expenses.

Intimidation

From all the people VentureBeat spoke with, most spoke highly about working at Roomi in terms of their coworkers. But the conversations turned sour in relation to senior management, including Yadav, whom some felt was sometimes a little “volatile” and a “bully.” One person said:

The company and team was absolutely amazing and exceptional. Truly some of the best people I have ever worked with. Which is why it is so scary how two people (the CEO and another senior executive) could completely ruin a culture and make people anxious and scared to come into work.

Another former employee said:

The product, engineering, and marketing team managers were respectful, effective, and led their teams well. However, most employees were generally uncomfortable around, and even fearful of Ajay, who absolutely intimidated and bullied.

In response to this, a Roomi spokesperson told VentureBeat that the HR department received no formal bullying complaints over the course of the company’s four-year history.

The future

In terms of what the future holds for Roomi, well, it appears to hang in the balance. From what we understand, the company has more or less run out of cash. There are whispers that Roomi could pivot to become a student-focused platform, something the company would not confirm to VentureBeat — though it did say that it was “evolving” its business into a new model.

How it plans to do that without raising additional funds is not clear. It’s possible that a follow-on investment could still happen*, though it may depend on the exact nature of the new business model. It’s also plausible that such funding may hinge on who is leading the company forward.

“We still firmly believe in making renting better and safer,” Yadav said. “And we’re working with our board and investors to do just that.”

*Update: 11/09/18

Since we published this article, one investor, who said that they had previously invested in Roomi three times, reached out to say that they stand by Roomi and are prepared to invest in Roomi for a fourth time. We have also removed an embedded tweet of theirs to respect their wishes.