Ashneer Grover resignation: The most aspired digitisation of Indian economy proved to be beneficial for both the fintech companies as well as the people of India. No doubt! BharatPe was also one among the other finance technology firms. Later with its reach, it became the number one offline acquirer for UPI QR transactions in the country. Nevertheless, the ongoing conflict between the former MD and founder Ashneer Grover and BharatPe is proving to be the reason for the company to move towards its fall.
BharatPe channelised merchants
Co-founded by Bhavik Koladia, Ashneer Grover and Shashvat Nakrani in 2018, BharatPe visioned to build a platform for small merchants. The idea was to provide a complete buffet of services for the SMEs. BharatPe became the first company to launch interoperable UPI based QR.
The lending scheme of BharatPe attracted the most business enterprises. The policy focused on harnessing the merchant’s transaction data while providing them the loans. This 2 per cent rate of interest per month loan increased the reach of the company to small merchants who were generally ineligible for traditional loan process.
Ashneer Grover became the MD of the company. He, being a banker, efficiently raised a $2 million fund from the top investors. In the later part of the growth, many other members joined the company. Suhail Sameer worked as a Group President and was ultimately promoted as CEO.
In September 2021, over 7.5 million enterprises and merchants used the platform with a record 140 million transactions per month. The total loan provided by the company also grew to Rs.25 million. The valuation of the company stood at $2.85 billion making it a unicorn.
In March 2022, BharatPe sacked Ashneer’s wife Madhuri, the company’s head of controls for fraud and irregularities. She was accused of using company funds for the personal use. This started a tussle among Ashneer and others. A week later, Ashneer resigned from BharatPe and its Board alleging that he was treated in ‘most disrespectful manner’. The tussle led to the lawsuit against him.
Since the beginning of 2022, many senior executives have left the company one after another. The list comprises chief technology officer Vijay Aggarwal, chief product officer for lending and consumer products Rajat Jain, Nehul Malhotra, head of consumer lending platform PostPe and Geetanshu Singla, vice-president of technology.
More recently, in August, Bhavik Koladia also quit the company. Although he is still the largest individual shareholder. It becomes obvious that this type of turmoil in any company will end up in unpleasant consequences. According to the recent report, while the revenue of the company soar to 169 per cent, the losses also increased to Rs. 5,594 crores in FY22.
The revenue of the company stood at Rs. 321 crores in FY22 compared to Rs. 119 crores in FY21. The losses of the past year were Rs 2,961 crore. The report came after Suhail Sameer stepped down from the post of CEO of the company.
Although, the losses are the result of IndAS (Indian Accounting Standards) accounting norm mandate, which proposes that any change in the fair valuation of Compulsorily Convertible Preference Shares (CCPS) must be recognised as a liability. It may be noted here that, CCPS are those shares that are issued with the terms that it can be converted into the equity after a certain period.
The losses of the company can be veiled by the accounting reasons but the continuous exit of the senior executives cannot be ignored. In addition to that, it cannot be denied that the company is struggling after the resignation of Ashneer Grover. Though, the future of BharatPe is still a matter of prediction for the people, but it is for sure that with such an image it does not seems to be bright. And, it looks like the speculations that after resignation of Ashneer Grover, BharatPe is dwindling away, is true.
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