Inside BharatpeOne of the country’s fastest-growing fintech companies, a brutal split has left the startup’s board split from co-founder and former managing director Grover. In recent days, senior leadership has accused Grover of misappropriating funds. Employees have narrated a long string of complaints. In a leaked audio recording posted anonymously to Twitter, a man whose voice sounds like Grover’s voice threatens a bank employee with death for not helping him get shares in a heated initial public offering.
Soon after the recording went online, Grover went on vacation, though he denied on Twitter that the voice was his. In the days since, the 39-year-old has all but attacked the company he helped build, attempted to oust a hand-picked chief executive and threatened to sue BharatPe’s board.
Last week, the drama reached a possible conclusion: Grover resigned from the startup. “All rights are reserved to take further legal action against him and his family,” BharatPe said in a statement. His presence was taken off the website. “As a result of his misdeeds, Mr. Grover is no longer an employee, a founder, or director of the company,” the statement read.
Grover said the charges against him, in which he stole company money for an extravagant lifestyle, stemmed from “personal hatred and low thinking”. The ability to achieve them against all odds through hard work and enterprise.”
The tense showdown between Grover and his colleagues comes at the height of the boom, or perhaps the beginning of the decline, for India’s startup scene. During the past few years, hard-charging entrepreneurs explored untapped corners of the market, pushing e-commerce, online tutoring and digital health services. Investors largely looked beyond rude behavior or personnel conflicts, fixed on record-setting initial public offerings and increased foreign funding into India after China built walls around its economy.
This account of the drama in BharatPe is based on interviews with more than a dozen current and former employees, as well as others close to the company. This is a case study of how India’s business culture is transforming into one of the world’s most promising markets with promising startups for legitimacy – and wealth.
Till a few weeks back, BharatPe was placed in the pantheon of emerging companies in India. Grover steered the New Delhi-based firm through successful fundraising rounds from investors including Sequoia Capital, Tiger Global Management, Ribbit Capital, Cotu Management and Binext. After three years of business, the valuation of BharatPe has reached around $3 billion.
The tech unicorn found success in digital payments, toe-to-toe with older rivals like Paytm and Walmart Inc-owned PhonePe. Grover was the driver of growth, a spontaneous talker who could help persuade Bollywood stars like Salman Khan to endorse the brand. He was also a master marketer, publicly appearing in flashy jackets and landing zinger on fresh-faced entrepreneurs as a “shark” investor in the Indian version of Shark Tank.
Now, Grover’s influence seems to be waning. His wife, Madhuri, a chief executive with the title “Head of Control”, has left BharatPe. Grover has gone silent beyond his brief statement since the board’s announcement last week.
Grover declined to comment further. Madhuri Grover did not respond to requests for interviews. Sequoia, Tiger Global, Beenext and Kotue declined to comment. Ribbit did not return a request for comment.
a fundraising specialist
BharatPe was founded in 2018 by Shashwat Nakrani, a drop-out from the Indian Institute of Technology New Delhi, one of the most prestigious schools in the country.
After working with Bhavik Koladia, a commercial pilot, the two campaigned for small businesses to understand the problems with digital payments in India. After a few months of work, he asked Grover to join as co-founder.
The men zeroed in on a lucrative business model utilizing merchant transaction data and loan underwriting to shop owners at the click of a button. BharatPe cuts loan dues daily at 2% monthly interest.
Grover, a former investment banker, was an essential partner on the fundraising front, helping to secure $2 million from Sequoia and Binext almost immediately. “He knew exactly what investors wanted,” said an early BharatPe employee. “He knew how to deliver.”
Grover’s wife, Madhuri, who has a background in fashion design, also pitched the business, managing everything from hiring to marketing expenses. Within a few months, the husband-wife team had taken root so strongly in BharatPe that Nakrani retreated to the fringes of daily operations, said an executive.
BharatPe soon placed bets. Grover raised hundreds of millions of dollars in rapid succession and locked in marquee investors. By mid-2021, when the company’s valuation reached $2.85 billion, several high-profile C-level executives were already on board, including Suhail Sameer, who reported Grover as group chairman. and was later made the Chief Executive Officer.
In September 2021, BharatPe recorded around 140 million monthly transactions and had already lent 25 billion rupees through its partners. More than 7.5 million merchants use the platform.
“I’m hyper-crazy,” Grover said in a September interview with Bloomberg, long before the company’s public meltdown. Development?'”
pile of complaints
But as BharatPe grew, signs of trouble for its investors began to emerge and spread.
According to current and former employees, problems began to arise in 2020. At the time, the first wave of coronavirus in India was ravaging the economy, shutting down businesses and forcing the country’s 1.3 billion people to move in.
BharatPe’s office remained open along with other tech startups providing essential services like grocery and medical delivery. A veteran female executive who joined the startup that year said she was surprised that wearing a mask was not mandatory. Of the company’s 70 or so employees, only a handful of employees wore them. Grover tricked him into making Covid an issue and influencing employees, the executive said in an interview, asking not to be named for fear of retaliation.
She said that just a few weeks after the job, her employment was suddenly terminated. A senior leader called them a “diversity hire,” the executive said, and another attributed the decision to “emotional baggage.”
The executive wrote to BharatPe investors Sequoia, Ribbit and Binext asking for a fair trial. Lawyers for Sequoia said they were not involved in day-to-day operations and had asked the startup to address their concerns. Responding to questions from Bloomberg, BharatPe said, “corrective action was taken based on complaints received from employees. Due to confidentiality, we cannot provide further details.”
According to over 10 current and former employees, Madhuri Grover was another source of frustration for senior executives. Staff said he threatened a co-worker with a pay cut for making a printout at work and criticized people for the amount of coffee consumed in the office. According to members of the marketing team, Madhuri questioned relatively trivial things, such as the price of a television or motorcycle as a gift to promote a merchant.
Nakrani and Sameer met with Grover to talk about his wife’s management style, which was considered intrusive by some employees. He asked Grover to hire an experienced chief financial officer, but he rejected candidate after candidate, one person said. The role is still vacant.
The frugality of the office clashed with the couple’s apparently lucrative lifestyle, rubbing some employees the wrong way. He upgraded his modest home to a rented penthouse and renovated another luxury property. Grover bought a Porsche. He told several people in the company that he spent $130,000 (approximately 993 million) on the dining room table according to the employees.
Meanwhile, as the startup expanded, employees said Grover constantly pushed them. Employees said the sales team achieved lofty goals by imposing loans on merchants who didn’t want credit. BharatPe’s customer support and collections staff were interrupted by complaints from small business owners.
“If you expect someone to build a $6 billion business in less than four years and want everything to be perfect, including culture, then sorry,” Grover said in an interview with Moneycontrol, an Indian publication in February. ” There will be rapid growth at any cost, no?”
a solution
By January, Grover’s world was beginning to crumble.
The audio clip posted on Twitter went viral among the country’s tech community. In it, a man who looks like Grover reprimands an employee of Kotak Bank for failing to arrange funds to buy IPO shares of Nykaa, an Indian beauty supply company, which has gone up in value after its listing. almost doubled. Hindi is insulted in the clip, while the bank employee asks a largely polite question. Grover denied on Twitter that the voice was his. That tweet was later deleted.
Normally, “once in a while, a wild streak can drive founders into extreme territory,” said Krishnan Ganesh, who has invested in dozens of startups, including online grocer BigBasket, which was recently acquired by the Tata Group. .
Then, according to coworkers, Grover’s behavior took another bizarre turn. He provided the board and Bloomberg with a dossier linking Chief Executive Samir to colorful claims of misconduct. BharatPe declined to address these allegations. Sameer could not be reached for comment.
Investors hired PricewaterhouseCoopers and Alvarez & Marsal to investigate Grover’s management of the money. In early March, BharatPe’s board issued a statement accusing Grover, his family and relatives of creating fake vendors, saying they were trying to siphon off funds and misuse spending accounts to “enrich themselves and live their lavish lives.” to fund the genre”.
In a statement to Bloomberg, Grover wrote, “I am shocked, but not surprised, by the personal nature of the company’s statement.”
Across India, public disclosures have attracted investors. Many see the saga as a cautionary tale about what happens when a talented but precarious leader chases profits at any cost. Still, Grover has taken the hits swiftly.
“The founder is someone who has the backbone to raise money from someone and tell them I’m not here to dance to your tunes,” he wrote on LinkedIn last month. Hundreds of his followers liked the post and appreciated its bravery.
However, fellow startup founders in India were not so generous.
“No offense boss, but you seem to have completely lost the plot,” said Shantanu Deshpande, founder and chief executive of Bombay Shaving Company, a startup that sells grooming products.
This story has been published without modification in text from a wire agency feed. Only the title has been changed.
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