Bharatpe News: BharatPe’s Ashneer Grover goes on leave days after audio clip goes viral
It’s a rare case of a high-profile founder stepping down amid a debate about the toxic work culture at fast-growing startups and Grover’s conduct. However, Grover said he would be back “April 1 or sooner.”
“At this time, the Board of Directors has accepted Ashneer’s decision, which we agree is in the best interests of the company, our employees and investors, and the millions of merchants we support. every day,” BharatPe said in a statement Wednesday. The fintech startup will continue to be led by CEO Suhail Sameer, who was appointed to the role in August. Sameer is also the director of BharatPe.
Grover said in a separate statement that he was taking time off. “After much deliberation, I plan to take temporary leave from BharatPe until the end of March. I will return on or before April 1, 2022,” he said in a statement, adding that he will use this time to to ‘rejuvenate’ and ‘refresh.’ “I expect to spend time thinking more deeply about our next phase of product development and BharatPe’s journey to profitability and IPO,” he said. he declared. “I will also double my investment in me personally.”
Grover’s alleged October phone conversation with an employee, regarding funding for Nykaa’s stock purchase in the beauty retailer’s IPO, has been criticized by the startup ecosystem. However, the company’s board and investors had been silent throughout.
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Grover had sent a legal notice to Kotak Mahindra Bank seeking damages for missing Nykaa’s IPO in October, it was later revealed. In response to questions from ET, earlier this month, Kotak said it would take legal action over “inappropriate language” used by Grover, apparently confirming the authenticity of the leaked audio clip.
The BharatePe founder is allegedly aggressive and abrasive with employees and other stakeholders, ET reported on January 16. ET reported on Jan. 17 that Grover had a run-in with Harshjit Sethi, managing director of Sequoia Capital India, which owns more than 19% of the company.
BharatPe, which primarily caters to the financial services needs of small merchants and kirana stores, was founded in 2018 and is valued at $2.85 billion. It has been a major player in the new era in the digital payments industry. Sequoia’s stake in BharatPe is worth around $560 million.
BharatPe investors had met with Grover last week to discuss the matter and next steps, two people with knowledge of the board’s discussions told ET.
“Investors and the board have been in discussions with Grover and senior management of the company,” one said. “The option was either to ask him to resign or to put him on temporary leave and then phase him out.”
It is unclear whether the council has opened a formal investigation into the allegations against Grover. Investors and members of the company’s board of directors did not respond to questions about a possible investigation.
“Although there are allegations against Grover, it also dragged BharatPe into it… but they are not yet proven,” said another person with knowledge of the matter. “Grover continues to argue that the viral social media sound clip is fake.
Industry watchers said the closest precedent they could think of was Housing.com, which fired its co-founder and CEO Rahul Yadav in 2005 after a series of controversies.
“It was a difficult conversation with Grover…He was told he would stay away from company business for a few weeks until the dust settles,” said a third person who was at the aware of the discussions that took place with Grover. However, industry observers who have interacted with BharatPe’s investors in the past say the board has the right to intervene in such situations and take an active call to maintain BharatPe’s image. a company.
“The council has every right to intervene and open an investigation in such cases, even if it is personal. It’s surprising that the board hasn’t taken a strong stance on the matter,” said an industry executive who spoke on condition of anonymity.
In the first week of January, an anonymous Twitter handle – bongo babu – posted a SoundCloud link to an audio clip of a man, allegedly Grover, abusing and threatening the bank employee over the phone after he missed the IPO of Nykaa.
Grover first tweeted that the recording was fake and that “a scammer” was trying to extort $240,000 in bitcoins from him. He shared screenshots of alleged emails asking for money. The same week, the audio clip was removed from Twitter and SoundCloud. Grover later deleted his own tweet, telling ET he did so because the original clip had been taken down.
In a report last year on BharatPe’s partnership with non-banking finance company (NBFC) Centrum Financial Services to acquire a small financial bank license, sources told ETtech that the company’s investors were not comfortable with Grover’s “mercurial style” of leadership.
In August 2021, he had been appointed chief executive of BharatPe, with recent recruit Suhail Sameer taking on the role of chief executive. Grover and BharatPe have also been embroiled in a public feud and legal battle over the “Pe” suffix with rival PhonePe, which is owned by Flipkart. BharatPe is one of the best-funded fintechs in the Indian startup ecosystem and recently raised $370 million in a round led by Tiger Global.