Crisis At Kult: Unpaid Employees, Missing Funds, And Blurred Chain Of Command

It was May 2025 when we last came across Kult, and the company’s narrative of starting afresh after leaving hundreds of employees unpaid looked like a game of smoke and mirrors. Indeed, we called it exactly that at the time.  

But if we are talking games, the story of Kult is now looking like a real-life Whac-A-Mole. Most of us have played this at some point in our lives, and most of us end up leaving the table frustrated. This is exactly what employees at Kult feel now, eleven months after that first swansong for Kult. 

Close to 100 employees at the beauty marketplaces have not been paid for months; some of them since November 2025. Similarly, brands and vendors have not been paid for selling their beauty products and services. Some of these business losses may have further led to pay or job impact. 

Many of them have now come out in the open with a stream of allegations, and to our ears, this chorus sounds familiar. 

Central to the game are the husband-wife duo of Rahul Yadav and Karishma Singh. Yadav’s chequered history as an entrepreneur is well documented by now, but Singh first came under the spotlight only during our investigation into Broker Network, the last major venture launched by Yadav. 

Kult was an intrinsic part of Broker Network’s web of related entities, as reported by Inc42, and now the new Kult is carrying that very game forward. This time around, it’s a lot bolder — they didn’t even change the name.  

When we call this a game, we don’t speak lightly. This is a metaphor to explain what’s happening here. 

An idle count tells us that over 200 employees have gone through this churn. Info Edge — the very same investor that backed Zomato and Policybazaar — was caught in it too, and if Kult and Rahul Yadav are to be believed now, the buck stops at the M3M family office, another significant business entity. 

And yet, none of these has managed to actually ‘Whack the Mole’. 

From The Beginning

Kult E-Commerce Private Limited was incorporated in 2024, but the brand’s intellectual property and trademarks were earlier housed under Kult App Private Limited, a structure Inc42 has previously reported on. 

In our last investigation, we had detailed how the company had accumulated liabilities of nearly ₹40 Cr, spanning unpaid vendor dues and withheld employee salaries and bonuses. 

Then came April 2025. 

Kult announced a $20 Mn Series A round led by M3M Family Office and Venture Catalysts, positioning it as a reset moment. The stated intent was clear: clean up past liabilities and rebuild the business from the ground up. 

At the time, Kult was pitched as a technology-led beauty platform, leveraging AI to deliver pesonalised skincare recommendations. Its visual catalogue, the company claimed, was designed to cater to diverse Indian skin tones, making product discovery both intuitive and inclusive. 

The ambition matched the narrative. Kult said it aimed to onboard 700 premium beauty brands, scale to over 10,000 daily orders by the end of 2025, and expand its workforce by hiring more than 200 employees across key functions. 

Investor messaging reinforced this optimism.

M3M’s Payal Kanodia had stated that the firm would not only back Kult operationally but also support future capital raises, with an aggressive target of scaling the startup to ₹5,000 Cr ($540 Mn) valuation within a year. 

On paper, it signalled alignment, capital in place, strong investor conviction, and a roadmap that suggested clarity of execution. 

At least in press releases and public-facing narratives. 

A year later, that story has unravelled in stark contrast. 

And as this investigation shows, the reality beneath the surface was far more fragile than it appeared. 

Notably, Venture Catalysts has told Inc42 that it never invested in the company. 

Questions sent to both Karishma Singh and M3M didn’t elicit any response at the time of publishing this story.

A Full-Blown Crisis At Kult

Multiple sources indicate that the crisis dates back to December. Until November, employees were getting their salaries on time. The first sign of trouble emerged when December payouts were delayed.

Initially, employees were told the delay was due to some operational issues. Also, management reportedly reassured employees that their pending salaries would be cleared once the next tranche of the $20 Mn funding round was cleared. 

What adds to the woes is that only a small group of senior employees allegedly continues to receive salaries, while the majority — an estimated 80-100 employees — are still basking in the hope of payday. 

“We were not getting salaries… we learned that some senior employees [10-15], close to Karishma and Rahul Yadav, have been receiving their salaries on time,” said a former employee, requesting anonymity. 

Not to mention, Kult is currently going through financial strain. It shut its Mumbai office late last year, following which it asked some employees to relocate to Gurugram. By mid-January, employees in Gurugram stopped reporting for work due to non-payment of salaries. 

Meanwhile, management maintained that dues would be cleared by February. However, the tone reportedly shifted when employees threatened Kult with legal action. Interestingly, management directed them to file a lawsuit against M3M. 

“From March onwards, Rahul Yadav asked us not to take legal action against Kult, and instead pushed us to file a case against M3M, saying they were responsible for releasing the salaries,” said a former employee. 

Inc42 has seen a WhatsApp message shared by Yadav in an internal group where he informed employees about delayed payments from M3M and even advised them to look for alternative employment. 

Several employees have reportedly found their official emails revoked, effectively cutting off formal communication channels. 

The Funding Mirage

At the heart of Kult’s current crisis lies a big funding gap. The startup had publicly announced a $20 Mn funding round from M3M last year. The company even hosted a press conference at a five-star hotel in New Delhi. 

However, according to sources, the actual capital infusion was approximately ₹50 Cr ($5.3 Mn), disbursed in tranches of ₹ 4-5 Cr throughout the year. 

“The whole announcement was done to create a smoke screen, to clear the name, and attract talent. Even M3M didn’t say anything when such an announcement with significant fanfare was made,” said the former employee quoted above. 

After creating the perception of a well-capitalised startup, Kult aggressively hired talent, including senior executives, and offered generous compensation packages and relocation benefits. 

Candidates wary of Yadav’s past controversies were reportedly reassured by CEO Karishma Singh that Kult was her independent venture and that Yadav had no operational role. However, post joining, several employees observed that Yadav was marked in internal emails and was involved in strategic discussions. 

Sources indicate that Yadav was also directly engaged in investor conversations, including interactions with M3M, and was part of fundraising efforts in Mumbai earlier this year.

Even as Singh stepped back from day-to-day operations, employees claim that Yadav remained the primary point of contact for addressing concerns, particularly around unpaid salaries. 

A Business Built On Assumptions

Kult’s financials reveal a business model under significant strain. The company reported an operating revenue of a mere ₹27.5 Lakh against a loss of ₹ 3.2 Cr in FY25. Total expenses stood at ₹3.5 Cr, with employee costs alone accounting for ₹1.8 Cr. Notably, the company’s cash reserves stood just at ₹1.9 Lakh. 

Sources suggest that by late 2025, the company’s monthly salary outflow had ballooned to ₹3-3.5 Cr, alongside approximately ₹1 Cr in monthly marketing spends. This level of expenditure appears misaligned with both revenue generation and available capital.

Operational expenses further compounded the burn. While M3M provided office space in Gurugram, Kult incurred additional lifestyle-driven costs, including providing breakfast, lunch and evening snacks. 

The company is said to have spent around ₹1.5 Lakh weekly on groceries, with an in-house chef catering to employees and management. 

“We had an in-house chef. She would cook meals for the management sometimes,” said a former employee. 

Another source confirmed the presence of a high-profile chef, though noted that she was also assigned to other projects.

As equity funding failed to materialise, Kult turned to debt to sustain operations. In December, the company secured a ₹10 Cr loan from Indian Overseas Bank. However, shortly after this infusion, M3M allegedly took control of the company’s bank accounts, further complicating liquidity management. 

In parallel, Kult explored inventory financing of ₹50 Cr, contingent to M3M providing a corporate guarantee. The plan was to scale inventory to ₹50-60 Cr per month, generating monthly sales of around ₹20 Cr and an annualised run rate of ₹200-250 Cr. 

To achieve this, the company needed to scale to 5,000 daily orders. At its peak in September, Kult was processing between 2,000 and 2,500 orders per day with an average order value of ₹1,200. 

Management believed that demonstrating this scale could unlock fresh equity funding. However, the plan hinged on M3M’s guarantee, which, according to sources, never materialised. Subsequent attempts to raise ₹20 Cr from family offices in Mumbai in January also fell through. 

Zero Accountability

M3M, for its part, has distanced itself from any operational responsibility. In a statement to the Hindustan Times, the investor clarified, “The day-to-day management, operations, and executive decision-making of Kult, including all matters relating to hiring, payroll, vendor payments, and financial management, have at all times been the responsibility of the company’s founders and management team, Karishma Singh and Rahul Yadav.” 

The statement is notable for explicitly naming Yadav as part of the management team, despite his lack of a formal role within the company. This only reinforces employee claims about his influence. 

M3M has also initiated a financial audit of Kult to investigate potential irregularities. Kult’s immediate future remains unclear. There is no visibility on when employee salaries or vendor dues, estimated at around ₹13 Cr, will be cleared. Operational continuity itself appears uncertain, with inventory depleted, marketing halted, and employees disengaged. 

As of now, the episode raises fundamental questions about startup governance, investor diligence, and the risks of narrative-driven fundraising. The bigger question, however, is: will its employees get any immediate relief?

Edited By Nikhil Subramaniam

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