How Kalaari-backed AppsDaily went from fabulous to flameout

How Kalaari-backed AppsDaily went from fabulous to flameout

By Dearton Thomas Hector

  • 18 Sep 2017
How Kalaari-backed AppsDaily went from fabulous to flameout

It was a sultry summer evening in 2015. The venue was JW Marriott hotel in Mumbai’s upscale suburb of Juhu. The agenda was simple—party hard and let your hair down.

And for good reason. AppsDaily, a mobile phone insurance and security startup, had just raised $16 million (then Rs 100 crore) in a Series C round led by venture capital firm Zodius Capital. Existing investors ru-Net, IndoUS Venture Partners (now Kalaari Capital) and Qualcomm Ventures had bet more on the company. Individual investors, who had backed the firm under the banner of Mumbai Angels, had partially exited, garnering returns several times their investments.

Confidence was oozing.


Merely two years on, the company's sixth-floor office in Mumbai's Andheri East wears a gloomy look. The startup is mired in a web of issues ranging from delayed salaries to weakening investor confidence to a litany of customer complaints.

VCCircle spoke to several current and former staffers of AppsDaily, and reviewed WhatsApp messages sent to and from the management to understand the complete reversal of fortunes. We also looked at the company's Registrar of Companies filings over the past 16 months.

Before we delve into that, however, here's an upshot of the company's business.


Founded by siblings Arun Menon (CEO) and Ajay Menon (director) in 2008, the company started off as Onward Mobility and was later re-branded as AppsDaily. Arun holds a B.Tech from IIT Bombay while Ajay had previously founded Ambrosia Infotech Ltd, a product engineering and consulting services provider across verticals like telecom, Internet, healthcare and retail.

Apart from its key offering of mobile phone insurance and security, AppsDaily Solutions Pvt. Ltd also focuses on app development and distribution. Unlike traditional players that simply launch the apps on Google Play or iTunes, it sells and distributes its own and third-party products through offline retail partners across the country. The products are sold under the brand name ‘daily’, such as 'daily cop', 'daily protect', 'daily assure', 'daily complete security', and so on.

Employee issues galore


While top management's salaries have been either withheld or delayed since last October, the crisis worsened in January, engulfing lower-level employees, the company's staffers allege. Salary components like meal vouchers have not been given to many employees, and travel claims of many remain unpaid since July 2016. Arrears have been piling up.

Employees' contribution towards Employee Provident Fund has been remitted only till December 2016 for many. Employer contribution has not been deposited since July 2016, several people allege.

Some employees claim that even their tax deducted at source (TDS) has not deposited with the Income Tax department for financial year 2016-17.


As many as 300 employees have left the company over the past six months because of unpaid dues. At its peak, AppsDaily employed more than 1,200 people.

Meanwhile, CEO Arun Menon has been asking employees to find jobs at other companies, VCCircle has learnt. He has been telling them that the company was “out of funds” and looking for a fresh round of investment. AppsDaily had last raised $3.75 million in Series D funding in September last year, according to VCCEdge, the data and research arm of VCCircle. Overall, the company has raised around Rs 150 crore so far.

A WhatsApp message from Arun Menon, which VCCircle accessed, read: “I am personally f****d but am still fighting this battle with all investors because I want to make sure all of you are happy in the end…”


Investors desert the board

Kalaari Capital is the biggest stakeholder in the company with around 27% stake. Zodius owns 11%, ru-Net 13%, Qualcomm 11%, Mumbai Angels (28 individuals) owns 16% while co-founders Ajay and Arun hold 9% each.

Vani Kola, managing director of Kalaari Capital, resigned from the company's board in April last year “to reduce the number of directorships.”

Kalaari co-founder Vinod Kumar Dham, who appointed as a director following Kola's exit, left in November 2016 citing personal reasons.

The same month, Zodius managing director Gautam Patel quit the board saying he was “pre-occupied with other matters.”

On the very next day, Galina Chifina of ru-Net resigned as additional director citing “personal and unavoidable reasons.”

Rajiv Dadlani of Consort Capital, another investor, followed suit and resigned next month. It is not clear whether these investors have sold their shares.

Email queries sent to founders Arun and Ajay Menon, Dadlani, Patel, Chifina, Dham and Kola did not elicit a response till the time of publishing this report.

Customer complaints rise

VCCircle found as many as 1,200 complaints against AppsDaily on, of which a minuscule 40 seem to have been resolved.

The ire of customers and employees is visible on Twitter as well.

The company's tepid financial performance mirrors the overall state of affairs. Total income fell to Rs 77.4 crore in FY16 from Rs 99 crore in the previous financial year. Losses more than doubled to Rs 82.3 crore from Rs 32.7 crore. The company is yet to file its financials for FY17.

Clearly, a heavily-funded startup with marquee investors ought to have done something terribly wrong to be in the soup that it's in.

VCCircle has learnt that AppsDaily is trying to bring in a new investor so that it can fund its operations. However, time alone will tell if Menon brothers are able to pull the company back from the brink.

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