The founder and investors of Saarthi have initiated legal actions against Classplus, an edtech startup, almost a year after the latter was to acquire the former.
Chirag Kapil, founder of Saarthi along with investors said they have filed a criminal complaint against Classplus and its founders, Mukul Rustagi and Bhaswat Agarwal. While the names of investors who have filed the complaint against Classplus have not been disclosed, its prominent investors include Pinnacle Investments and GVFL Ltd.
Classplus’ Chief Financial Officer Sankalp Aggarwal has also been named as an accused.
Saarthi said complaints stemmed from the acquisition that did not progress as planned. The lawsuit contains a comprehensive list of grave allegations, which include cheating, extortion, criminal breach of trust, mental harassment, defamation, theft of immovable property, misappropriation of funds, and more, Saarthi said in a press statement on August 9.
Founded in 2018 by Rustagi and Agarwal, Classplus is a mobile-first software-as-a-service (SaaS) platform that allows educators and content creators to build their online presence, digitise their offline tuition centres and sell courses online.
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The controversy traces back to late 2021 when the founders of Saarthi and Classplus first engaged. In October of that year, an acquisition proposal was presented, with seemingly advantageous terms for Saarthi.
The talks began in 2011 and as per the deal, business operations and employees from Saarthi would be moved to Classplus. While initially, Saarthi's Kapil took up an executive role at Classplus, the company said matters started to go downhill from there when Kapil’s role was terminated.
“Furthermore, investors associated with Saarthi have not received their stipulated agreements or the corresponding equity they were entitled to. Both Kapil and the aggrieved investors have lodged legal and criminal complaints, naming Classplus and its founders, Mukul Rustagi and Bhaswat Agarwal, along with the Chief Financial Officer, Sankalp Aggarwal, as the responsible parties,” the company statement said.
Tiger Global-backed Classplus was valued at over $600 million in 2022 and sells software to educators and coaching centres, among others.
Classplus is also backed by Peak XV's Surge, Blume Ventures, Alpha Wave, and GSV Ventures.
Both Saarthi and Classplus have submitted their responses in the Delhi High Court, and the next hearing is scheduled for September.
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