For the past few weeks, BharatPe has been making headlines in the start-up world. But all for the wrong reasons. From leaked audio that went viral on social media, where Ashneer Grover, BharatPe’s Co-founder and Managing Director was allegedly heard threatening and abusing a Kotak Mahindra Bank employee over Nykaa’s IPO to investigations revealing fraudulent activity including payment to non-existent vendors and irregularity in invoices, things have gone south for BharatPe. The merchant-friendly app, which was founded in 2018 by Grover and Shashvat Nakrani, currently holds a valuation of $6 billion and is backed by global investors like Tiger Global, Dragoneer Investor Group, Steadfast Capital, Sequoia Capital India, Ribbit Capital and Coatue amongst others. However, BharatPe has a history of running into controversies. This time though, things have gone murky for the fintech major. Here is a timeline of how BharatPe commenced its journey and how things escalated within weeks.
March 2018: BharatPe was founded by Ashneer Grover and Shashvat Nakrani.
February 2019: BharatPe raised $14.5 million in a Series A funding round led by Sequoia Capital India. The firm onboarded Insight Partners as its investor along with Beenext.
June 2019: BharatPe raised $50 million in a Series B funding round led by Ribbit Capital and Steadview Capital.
February 2020: BharatPe raised $75 million in Series C funding led by Coatue Management and Ribbit Capital.
August 2020: Grover had an altercation with Harshjit Sethi, Sequoia Capital India’s Managing Director after the investing firm decided to not commit to the Series B funding round for BharatPe. The conversation which happened via email, was later become public. In the email, Grover allegedly used abusive language.
November 2020: BharatPe appointed Kewal Handa as an independent director to expand its business strategy and product categories. Handa was previously associated with the Union Bank of India and Pfizer.
February 2021: BharatPe raised $108 million in a Series D funding round led by Coatue Management. The other investors included Ribbit Capital, Insight Partners, Steadview Capital, Beenext, Amplo and Sequoia Capital India.
June 2021: RBI approved the joint venture between BharatPe’s and Centrum Group to acquire troubled Punjab & Maharashtra Cooperative (PMC) Bank. Both firms infuse Rs 1,800 crore in the troubled bank.
June 10, 2021: BharatPe acquired Payback from American Express and ICICI Investments Strategic Fund. This was the first acquisition of BharatPe.
August 2021: BharatPe raised $370 million in a Series E funding round. It entered the Unicorn club.
August 2021: Sameer Suhail, who joined BharatPe in 2020, was appointed as the CEO of the company by Grover.
October 10, 2021: Grover and his wife Madhuri Grover applied for Nykaa’s IPO through Kotak Mahindra Bank.
October 26, 2021: Kotak Mahindra Bank assured Grover financing for subscribing to Nykaa’s IPO.
October 28, 2021: Kotak Mahindra Bank informed Grover and his wife that the bank cannot provide IPO financing citing high lending rates.
October 30, 2021: Grover sent a legal notice to Kotak Mahindra Bank and Uday Kotak.
October 2021: Directorate General of GST Intelligence (DGGI) conducted a search at BharatPe’s head office. Notice was issued by DGGI to the company’s head to appear before the authority and to produce purchase invoices from various enterprises and the bank statements that would reflect payment by these vendors. BharatPe in a written reply to DGGI requested to waive off the notice.
January 5, 2022: An audio clip was leaked on social media where Grover was heard allegedly threatening and abusing Kotak Bank’s employee over Nykaa’s IPO.
January 6, 2022: Grover termed the audio clip as fake. He tweeted, “Folks. Chill! It’s a FAKE audio by some scamster trying to extort funds (US$ 240K in bitcoins). I refused to buckle. I’ve got more character. And Internet has got enough scamsters :).”
January 8, 2022: Grover deleted the tweet after the audio was taken off social media.
January 9, 2022: Kotak Mahindra Bank said it will take legal notice to Grover and his wife.
January 17, 2022: The email exchange between Grover and Sethi, became public which Grover had allegedly used over the course of the conversation.
January 19, 2022: Grover decided to go on voluntary leave till March 2022.
January 29, 2022: Madhuri Grover, who works as the Head of Controls in BharatPe, went on voluntary leave.
January 29, 2022: BharatPe appointed Alvarez and Marsal (A&M), for internal audit at the board’s recommendation.
January 29, 2022: Reports emerged citing sources that BharatPe is likely to terminate Ashneer Grover. BharatPe issued a public statement that no employee has been terminated.
January 30, 2022: Grover hired a Delhi law firm as pressure mounts for him to leave the company.
February 1, 2022: BharatPe roped in PwC, to widen the internal investigation against alleged financial irregularities, along with A&M.
February 4, 2022: Investigations by A&M reveal inconsistencies in payment transactions. This includes payments to non-existing vendors, irregularities in invoices, and inconsistencies with recruitments. The investigation also found a ‘Panipat connection’—stating that all invoices generated were from Panipat. The A&M report also mentions that Grover’s wife Madhuri and his brother-in-law Shwetank Jain are from Panipat. According to the report, the fraud related to fake invoices has cost the company a loss of Rs 10.97 crore. The report also states that Madhuri had directly received the invoices from vendors, and had forwarded them to the company’s account department for payments. It also revealed that the vendors of these invoices were fake and that Shwetank had created these invoices.
February 4, 2022: Grover seeks the removal of Suhail Sameer from the board.
Shareholders at BharatPe:
As of August 2021, Sequoia Capital India holds the maximum share i.e. 19.6 per cent, as an investor in the company. This is followed by Coatue Management, which holds 12.4 per cent shares in the company, and Ribbit Capital which holds 11 per cent shares in the company. Other investors—Beenext, Steadview Capital and Tiger Global, hold 9.6 per cent shares, 4.1 per cent shares, and 3.7 per cent shares respectively. A majority of shares, i.e. 22.3 per cent shares is held by others. The company’s co-founders—Grover and Nakrani—hold 9.5 per cent and 7.8 per cent shares, respectively.