Rocket redux or founder factory? Nikhil Kamath-Kishore Biyani venture triggers startup backlash

The launch of The Foundery, a new startup-building initiative backed by Zerodha co-founder Nikhil Kamath and Future Group founder Kishore Biyani, has set off one of the sharpest debates in India’s startup ecosystem in recent years. Unveiled on December 22 through a full-page newspaper advertisement, the project is being pitched as a high-intensity “co-founder factory” for consumer-facing startups.

Supporters see it as a bold attempt to rethink entrepreneurship in an era of tight capital and fading hype. Critics, however, say the model dangerously resembles Rocket Internet’s much-criticised India playbook, where founders were effectively hired hands with limited ownership and motivation.

At the heart of the controversy lies a fundamental question: can founders be manufactured, or does entrepreneurship resist institutional shortcuts?

What The Foundery is offering

The Foundery positions itself somewhere between a business school, an accelerator, and a venture studio. Its stated aim is to compress years of startup trial-and-error into a structured, execution-first programme.

The flagship offering is a 90-day fully residential programme in Alibaug, scheduled to begin in April. Around 30 participants will live and work together, collectively expected to ideate and launch up to 20 consumer startups. The focus is unapologetically hands-on: rapid problem discovery, market testing, prototyping, and early scaling. Alongside this is a so-called “School of Life”, aimed at founder psychology, resilience, and decision-making under stress.

Mentorship is a central selling point. The Foundery has listed prominent entrepreneurs such as Paytm founder Vijay Shekhar Sharma and Snapdeal co-founder Kunal Bahl among its mentors, drawing on experience across fintech, e-commerce, and consumer brands.

On funding, the model is strikingly aggressive. Selected ventures may receive up to ₹4 crore in seed capital from Kamath’s Rainmatter Capital or affiliated entities. In return, founders collectively retain up to 25 per cent equity, with the remaining 75 per cent held by The Foundery and its backers. Applications are open, with a non-refundable ₹5,000 fee, and no formal educational requirements.

Kamath has framed the initiative as an extension of his long-held belief in patient capital and sustainable business-building, a philosophy he often contrasts with the blitzscaling culture that dominated Indian startups for much of the last decade. Biyani’s involvement brings deep experience in mass-market retail and consumer behaviour, reinforcing the focus on “made-in-India” brands.

Why Rocket Internet comparisons are resurfacing

The backlash was swift, and telling. Within a day of the launch, several founders and investors began likening The Foundery to Rocket Internet, the German startup incubator that expanded aggressively in India between 2009 and 2016.

Rocket’s model was notorious. It cloned successful global startups, hired consultants as nominal “founders”, offered them minimal equity, and poured money into marketing and rapid expansion. While some companies scaled quickly, most collapsed just as fast. Jabong, one of Rocket’s most prominent Indian bets, burned hundreds of millions of dollars before being sold at a fraction of the investment. Others shut down.

Critics argue that Rocket’s failure was structural: founders without meaningful ownership lacked the obsession and irrational persistence that real entrepreneurship demands.

That argument has now been forcefully applied to The Foundery. The sharpest critique came from Jasveer Singh, co-founder of AI-driven matchmaking app Knot.dating, which turned profitable within months of its pivot earlier this year. In a widely shared post, Singh described the 75 per cent equity structure as “hollow”, warning that it would attract competent operators rather than founders willing to endure chaos, risk, and personal loss.

The concern is one of adverse selection. The best founders, critics say, will walk away from such dilution, leaving behind those more comfortable with a quasi-employment model. Over time, that could produce startups that look efficient on paper but lack the emotional commitment required to survive inevitable downturns.

Defenders push back

Supporters of The Foundery insist the Rocket analogy is lazy and incomplete. They point to Kamath’s own career, built without venture capital excess, as evidence that the initiative is philosophically different from Rocket’s burn-heavy approach.

They also argue that the timing matters. India’s startup ecosystem is no longer flush with easy money. In a tighter funding environment, a studio model that centralises capital, mentorship, and execution may actually reduce waste and increase survival rates. The residential format, defenders note, borrows elements from global programmes such as Y Combinator residencies, but adapts them to India’s consumer markets.

Some observers suggest the harsh equity terms are deliberate, designed to filter for participants who value learning, speed, and long-term opportunity over immediate ownership. In that reading, The Foundery is less a utopia for dreamers and more a proving ground for builders.

An uncertain road ahead

Adding to the intrigue, reports surfaced on December 23 suggesting that Kamath and Biyani may have paused or reconsidered parts of the rollout amid market volatility and the intense backlash. No official statement has confirmed this, and applications remain open, but the speculation has only amplified scrutiny.

Whether The Foundery becomes a pipeline for durable consumer companies or a case study in over-engineered entrepreneurship remains to be seen. What is clear is that its launch has exposed deep anxieties within India’s startup ecosystem: about equity, power, founder autonomy, and the uneasy shift from hype to hard execution.

In that sense, the controversy may be doing exactly what startups are supposed to do — forcing an uncomfortable but necessary conversation about how value, risk, and ambition are really shared in the next phase of India’s entrepreneurial journey.