Kult Beauty Crisis: Unpaid Staff & Missing Funds Exposed

Kult, the beauty marketplace, is facing a crisis marked by allegations of unpaid employees and missing funds. Nearly 100 employees have reportedly not received their salaries for months, with some going without pay since November 2025. Brands and vendors are also allegedly owed money for their products and services sold through the platform.

The company’s troubles have brought scrutiny to the roles of husband-and-wife duo Rahul Yadav and Karishma Singh. Yadav’s history as an entrepreneur has been previously documented. Singh’s involvement came under the spotlight during an investigation into Broker Network, Yadav’s venture. Kult was connected to Broker Network, and the current issues suggest a continuation of past practices.

In April 2025, Kult announced a $20 million Series A funding round led by M3M Family Office and Venture Catalysts, intended to clear liabilities and rebuild the business. Kult aimed to onboard 700 premium beauty brands and process over 10,000 daily orders by the end of 2025, expanding its workforce by over 200 employees. M3M projected scaling the startup to a valuation of ₹5,000 Cr ($540 million) within a year.

However, the situation has deteriorated, with the crisis allegedly dating back to December 2025. Employees were initially told that delays in salary payouts were due to operational issues and would be resolved with the next funding tranche. Some senior employees allegedly continued to receive their salaries, while the majority of the workforce was left unpaid.

Kult closed its Mumbai office and asked some employees to relocate to Gurugram. By mid-January 2026, employees in Gurugram stopped reporting to work due to non-payment of salaries. Management reportedly advised employees to file a lawsuit against M3M, attributing the payment delays to the investor.

According to sources, the actual capital infusion from M3M was approximately ₹50 Cr ($5.3 million), disbursed in tranches throughout the year. Following the funding announcement, Kult aggressively hired talent and offered high compensation packages. Despite Singh’s reassurances that Kult was her independent venture, employees observed Yadav’s involvement in internal emails and strategic discussions.

Kult’s financial statements for FY25 revealed operating revenue of ₹27.5 Lakh against a loss of ₹3.2 Cr. Employee costs alone accounted for ₹1.8 Cr, while cash reserves stood at ₹1.9 Lakh. By late 2025, the company’s monthly salary outflow had reached ₹3-3.5 Cr, alongside approximately ₹1 Cr in monthly marketing expenses.

In December 2025, Kult secured a ₹10 Cr loan from Indian Overseas Bank. M3M allegedly took control of the company’s bank accounts, further complicating liquidity management. Attempts to secure inventory financing and raise additional funds from family offices in Mumbai were unsuccessful.

M3M has distanced itself from operational responsibility, stating that day-to-day management and financial decisions were the responsibility of Singh and Yadav. M3M has initiated a financial audit of Kult to investigate potential irregularities. The future of Kult remains uncertain, with employee salaries and vendor dues estimated at around ₹13 Cr yet to be cleared.