SustainKart Collapses: Investors Accuse Founder Kanthi Dutt of Fraud and Misreporting
SustainKart Datalabs_in-article-icon, once touted as a rising marketplace for eco-friendly products with over 1,100 brands and 93,000 SKUs, has officially shut down. The closure comes in the wake of serious allegations of forgery and financial misrepresentation against its founder, Kanthi Dutt.
Allegations of Financial Misreporting
According to investors, SustainKart inflated its sales and revenue data, showing figures to backers that did not match with Goods and Services Tax (GST) filings. A group of investors has now sent a legal notice to Dutt, demanding repayment of nearly $800K plus interest, citing mismanagement, fraudulent financial reporting, and breach of fiduciary duty.
Dutt’s troubles don’t end here. His other venture, fine jewellery startup Tritiyaa, is also embroiled in controversy. An FIR filed in Hyderabad by cofounder Srija Tippala accuses Dutt of forging her credentials and replacing her as company director with his mother.
From Promise to Collapse
Founded in 2021 during the peak of India’s D2C boom, SustainKart positioned itself as a one-stop platform for sustainable products across categories like fashion, home décor, food, and nutrition. Celebrity fashion designer Shilpa Reddy joined as cofounder but has since publicly distanced herself from the startup following the controversy.
The company secured $500K in pre-seed funding in 2022, led by India Accelerator’s ‘IA Growth Opportunities Fund I’ and a few high-net-worth individuals. A year later, India Accelerator invested $294,780 through a CCD agreement. Dutt also partnered with celebrities, including actor Keerthy Suresh, who launched the brand Bhoomitra with SustainKart.
Despite early momentum, the startup ran into funding hurdles during the global "funding winter." Facing financial crunch, Dutt approached investors for another round, targeting $1.5 million. However, the company’s alleged misreporting of financials triggered investor distrust.
Larger Startup Governance Concerns
SustainKart’s downfall adds to the growing list of Indian startups facing corporate governance issues, including BharatPe vs Ashneer Grover, GoMechanic, Mojocare, Reshamandi, and BYJU’s. The episode highlights deep-rooted challenges around transparency and due diligence in India’s startup ecosystem.
For now, investors have turned to the courts to recover their funds, while SustainKart’s story stands as another cautionary tale of ambition derailed by questionable practices.
