How damaging a tug of war between the founders could be for a startup and investors? This could be well understood from the ongoing saga of Ashneer Grover, the controversial co-founder and MD of BharatPe, the fintech unicorn, that has been attracting the eyeballs for all the wrong reasons nowadays.
If the financial irregularities that are exposed in the company are not good enough to kill the future prospects of growth and investment, tackling the fear and uncertainty that have gripped BharatPe employees is the new challenge that is staring at the management!
It’s being reported that hundreds of BharatPe employees have started looking to exit the company as soon as possible. The market is suddenly flooded with resumes of BharatPe employees who are now skeptical about their future in the company.
Sensing it as a good opportunity to strengthen their talent pool the other fintech companies are trying to make the most of the opportunity provided by none other than BharatPe itself.
“We have been receiving hundreds of BharatPe CVs within the past week. At last count, there were over 400. This is across functions like business, finance and sales,” a founder of a fintech said to Moneycontrol.
BharatPe is experiencing a rapid decline in fortune. Last year, the company caught the attention of job seekers for giving BMW bikes and Dubai workcations as a part of their hiring strategy amid a fierce talent war.
Ashneer Grover is not the only one desperately looking to exit the company before the situation goes from bad to worse. Sources claim that over 400 BharatPe employees applied for jobs at other fintech startups and other financial companies while the investigation related to alleged fraud and misgovernance at one of India’s most prestigious startups.
The severity of the situation can be understood from the fact that many employees across all functions, including business, operations, and products, have applied to other companies as they believe that the upcoming days are going to be tough for the company considering the fight between Ashnneer and the management which is becoming nasty with each passing day. Many employees are currently serving their notice periods, while many others have already departed to join other startups. Industry sources indicated that nearly 600 to 1000 employees were on the payroll of BharatPe, indicating that nearly half of their employees are set to bid adieu to the company.
The biggest fear among employees is the fate of BharatPe in the months to come. Many are directly relating the situation with Housing.com and suspect that it would be an uphill task for a promising fintech startup to regain its lost reputation in the market.
Many employees are also skeptical about finding a suitable job at the current package – if not higher – after the spat between founders has turned nasty and there is no hope of a settlement in days to come.
Although the larger companies are more likely to be approached directly by employees, smaller firms have also set their eyes on the dismayed talent pool of BharatPe. They have begun making proactive efforts to reach out to BharatPe’s employees and explore their bargaining situations.
Many employees have decided to take a proactive approach and actively negotiate with the companies. They believe that negotiating possibilities will be diminishing in the future.
BharatPe however, has refuted all such claims. When a media company approached BharatPe to reaction, the company claimed that BharatPe was still a desirable destination for career advancement. They backed their claim with a lower attrition rate than the industry standard.
“The company continues inducting new talent. Over the past two months, our employee base has grown month-on-month. BharatPe strongly objects to the spread of misinformation about our company by spreading unsubstantiated rumors,” the company claims in a statement to Moneycontrol.
Grover made headlines last spring when he announced his plans to grow the tech team by luring 100 young talent with the promise of awarding BMW superbikes and Apple iPads.
Employees are finding no strength in the claims made by BharatPe. The increasing number of resumes of BharatPe employees on the job portals and talent management companies is a testimony to the fact that employees are in no mood to buy any claim made by the company.
Employees, as well as a few experts, believe that the ongoing tussle will have a direct impact on the valuation of the company. In fact, employees have reportedly stopped factoring ESOPs as a reason to stick with the company.
The management, on the other hand, trying everything possible in their capacity to win back the confidence of its employees. Their efforts, however, are not bearing fruits as employees still feel shocked and struggle to accept the financial fraud done by none other than their own CEO.
Dazeinfo spoke to a few employees of BharatPe, and each one of them, on the condition of anonymity, confirmed that the current CEO Suhail Sameer has asked employees to turn a blind eye to media speculations and reports about the gloomy future of BharatPe.
To control the damage, Sameer has instructed all employees to direct any journalist who approaches them to BharatPe’s human resources or public relations teams.
Alvarez, Marsel and PwC are conducting an assessment of governance at BharatPe. A&M’s initial report last week created enough of fire in media as it found fake transactions amounting to crores of rupees in the books. Besides blaming Ashneer Grover, they also accused Madhuri Jain, Grover’s spouse, his brother, and brother-in-law of having hands in gloves. The final detailed report is yet to be submitted.
The management’s decision to send Grover on leave abruptly turned into a full-fledged fight between him, investors, and the board. All of it has resulted in confusion and anxiety among employees. Despite the fact that Sameer was holding the position of CEO for more than a year, Ashneer, who still owns 9.5% stake, was the face of the company, and his act left many employees stunned and baffled.
A company can always get over and bounce back from such financial frauds. In past, we have seen multiple similar incidents. But, once a company loses the trust of their employees, the most valuable asset, it becomes next to impossible to thrive and shine as before. The rise and fall of Housing.com, one of the fastest-growing Indian startups once, is a classic example. Is BharatPe slowly moving in the same direction, or the management will end up surprising everyone by getting it back to glory? Only time will tell. A lot more action is yet to take place!