Allegations

The likes of Uber’s Travis Kalanick and WeWork’s Adam Neumann have a special place in the annals of controversial startup founders. Ashneer Grover of India may now join their ranks.

A ferocious split has split the board of BharatPe, one of the country’s fastest-growing financial technology companies, from Ashneer Grover, the co-founder, and former managing director. Grover has been accused of misappropriating funds by senior leadership in recent days. A long list of grievances has been voiced by employees. A man whose voice sounds like Grover’s threatens a bank employee with death in a leaked audio recording posted anonymously on Twitter for not helping him get shares in a hot stock.

Grover went on leave shortly after the recording surfaced online, though he denied on Twitter that the voice was his. In the days since, the 39-year-old has launched a full-fledged attack on the company he helped found, attempting to oust a hand-picked CEO and threatening to sue BharatPe’s board of directors.

Ashneer Grover resigned from the startup last week, bringing the drama to a close. BharatPe said in a statement that it “reserves all rights to pursue legal action against him and his family.” His picture was taken down from the website.

Grover claims the allegations against him stem from “personal hatred and low thinking,” including that he stole company funds to fund an extravagant lifestyle. “The only thing lavish about me is my dreams and ability to achieve them against all odds through hard work and enterprise,” he said in a statement to Bloomberg.

Grover and his colleagues are locked in a tense showdown at the pinnacle, or perhaps the beginning of the end, of India’s startup boom. Hard-charging entrepreneurs have pushed into uncharted territory in recent years, including e-commerce, online tutoring, and digital health services. Investors were mostly unconcerned about obnoxious behavior or personnel conflicts, focusing instead on record-breaking initial public offerings and a surge of foreign capital flowing into India after China built walls around its economy.

This account of the BharatPe saga is based on interviews with over a dozen current and former BharatPe employees, as well as other company insiders. It’s a case study in how India’s business culture is evolving, as a slew of promising startups competes for legitimacy — and fortune — in one of the world’s most promising markets.

BharatPe was lionised in the pantheon of India’s up-and-coming companies until just a few weeks ago. Grover led the New Delhi-based company through successful funding rounds from Sequoia Capital, Tiger Global Management, Ribbit Capital, Coatue Management, and Beenext, among others. BharatPe has a market capitalization of nearly $3 billion after only three years in operation.

The tech unicorn found success in digital payments, competing against older rivals like Paytm and Walmart Inc.’s PhonePe. Grover was the company’s growth engine, a smooth talker who could persuade Bollywood celebrities such as Salman Khan to endorse the brand. As a “shark” investor on the Indian version of Shark Tank, he was also a master marketer, making public appearances in snazzy jackets and landing zingers on fresh-faced entrepreneurs.

Grover’s power appears to be waning now. Madhuri, a key executive at BharatPe with the title “Head of Controls,” has left the company. Grover has been relatively quiet since the board announced his ouster last week, despite weeks of mudslinging.

Grover remained silent on the subject. Madhuri Grover did not respond to requests for an interview. Sequoia, Tiger Global, Beenext, and Coatue did not respond to requests for comment. A request for comment from Ribbit was not returned.

Whizzing The Fundraiser

Shashwat Nakrani, a graduate of the Indian Institute of Technology, Delhi, one of the country’s most prestigious schools, founded BharatPe in 2018.

After working on a commercial pilot with Bhavik Koladia, the two started small businesses to better understand the issues with digital payments in India. He asked Grover to join as a co-founder after a few months of hard work.

Using merchant transaction data and underwriting loans to shopkeepers at the click of a button, men make zero on profitable business models. BharatPe deducts daily loan arrears at a monthly interest rate of 2%.

Ashneer Grover, a former investment banker, was a crucial part of the fundraising team, assisting in the acquisition of $ 2 million from Sequoia and Beenext. A senior Bharatpe employee said, “He knew exactly what the investors wanted.” “He had a knack for delivering.”

Grover’s wife, Madhuri, who has a background in fashion design, was also instrumental in the establishment of the company, overseeing everything from hiring to marketing costs.