BharatPe and Uber: Is history about to repeat itself?
Is the BharatPe founder following in the footsteps of the Uber founder, Travis Kalanick?
Ashneer Grover is not someone who blends into the background and enjoys anonymity. But recently, the proverbial s**t seems to have really hit the fan for this entrepreneur.
Grover founded Bharatpe in 2018, an Indian fintech unicorn, providing POS (point-of-sale) and QR code-based payments to over 7 million merchants across 130 cities in India. In 2021, the firm even managed to secure a coveted banking license that fintech giants like Paytm failed to get. Previously valued at $2.75 billion at Series E (investors included Tiger Global, Coatue, Ribbit Capital, and Sequoia Capital India), the firm is targeting a $4 billion valuation in Series F.
A month ago, Grover announced his “voluntary leave of absence” from January to March. However, this was definitely NOT out of the blue, and the use of the word “voluntary” also seemed like a bit of a stretch.
BharatPe, just like every other unicorn, has enjoyed being in the media spotlight. But the coverage has not always been positive. Last year, reports surfaced about BharatPe employees leaving in droves due to toxic work culture, a policy forcing employees to work in the office during Covid, salary delays, and a lack of clarity about decision-making authority. In response, Grover “voluntarily” (there’s that word again) stepped down as the CEO, with Suhail Sameer stepping into the role. Then, in December, Grover got into another publicized brawl. A Twitter user uploaded an audio clip of Grover and his wife verbally abusing and threatening an employee of Kotak Mahindra bank over a spat between Grover and the bank regarding Kotak’s equity allocations in Nykaa’s IPO. The bank is reportedly taking legal action against Grover. While it is difficult to unearth the underlying truth, what with Grover and Kotak playing the “he said, she said” game publicly, Grover’s reputation and his past (and current) behavior do not do him any favors.
Grover has earned a bad reputation for openly trashing peers on social media for having Chinese investors on their cap tables or accusing them of overpriced IPOs. His image further suffers from his rude and abrasive behavior on Shark Tank India. Even his investors aren’t on his side, as reports of heated fights between Grover and a Sequoia partner over unapproved secondary transactions and delayed term sheets surfaced soon after the Twitter storm.
Considering the above problems, his “voluntary” leave and his decision to step down as CEO do not seem surprising. And neither is this article by moneycontrol, where Grover alleges that his investors are arm-twisting him to exit BharatPe, although it appears to have caught him unawares.
Ousting troublesome founders is not a new phenomenon, and the story of Travis Kalanick can give us a good idea of where Grover is headed (hint: Grover is on his way out). For those unfamiliar with this story, it started with a series of problems at Uber. And at its center was Kalanick, the Uber founder with a reputation as notorious as Grover’s. A risk-taker (brash is another way to put it) and highly ambitious, Kalanick was not above flaunting local regulations and getting into fights with the authorities, whether it was the LA cops, the Chinese government, or even Apple. In 2015, Tim Cook threatened to remove the Uber app from the App Store when Kalanick was caught secretly fingerprinting (identifying individual mobile phones) Chinese iPhone users. Uber’s notoriety deserves an article of its own, and the story is certainly a colorful one, with allegations of sexual harassment at work, nasty tricks against Lyft, cases of customers’ raped by drivers, tracking customers without their permission, and many others.
And just like Grover and his investors, Kalanick’s investors finally got tired of standing up for him through a litany of highly public controversies. In June 2017, Kalanick announced his decision to take a “voluntary leave of absence” after the death of his mother (sound familiar?). Simultaneously, Uber was undergoing legal investigations into claims of sexual harassment and other scandals. The BharatPe Board has appointed Alvarez & Marshall and PwC for a forensic audit. Uber fired 20 employees during the investigation into the sexual harassment claims, and BharatPe’s employees are leaving due to toxic work culture. Uber faced criminal investigations due to their dismissive attitude towards law enforcement, as Grover gets further entangled in his fight with Kotak and his alleged abuse of the bank’s employees. Kalanick’s antics were tarnishing Uber’s image, even as BharatPe cannot seem to separate itself from Grover’s personal battles.
When Kalanick went for his leave, most expected him to return and continue heading Uber. However, Eden Gillott Bowe, a Santa Monica-based PR expert and president of crisis public relations firm, Gillott Communications, disagreed. Based on her previous experience working with companies facing similar issues, she stated that a temporary leave of absence is the first step toward a permanent resignation.
Finally, in December 2019, Kalanick was asked to resign by his board. As Bowe forecasted, Kalanick did not return to Uber. And after today’s article on Money Control, it seems Grover has precious few chances left to avoid the same fate, if any at all.
But all is not lost. Uber still made Kalanick a billionaire, and Ashneer Grover has taken yet another page from Kalanick’s book, with his demand that the investors buy him out of BharatPe with a sum of Rs. 4000 crores (roughly half a billion dollars). Whatever the outcome, it seems highly probable that Grover will come out of this a winner.
