Ship Without A Captain: Suhail Sameer’s Dismissal & The BharatPe Leadership Crisis

Ship Without A Captain: Suhail Sameer’s Dismissal & The BharatPe Leadership Crisis


In a span of three years, BharatPe has seen two CEOs come and go, and two cofounders exit and a host of key personnel depart

Sameer survived just 16 months at the top role, while Nalin Negi, the interim CEO has only been with the company since August 2022

Negi, chairman Rajnish Kumar and the board have to answer plenty of tough questions in the next few months as the entry of Reliance Jio is set to change the fintech game for loss-making companies

In a span of three years, BharatPe has seen two CEOs come and go after short stints, and two cofounders exit. If last year began with the focus on Ashneer Grover, 2023 has started with the exit of Suhail Sameer.

The 12 months in the middle were said to be BharatPe’s redemption time, but they did not lack drama. In press releases sent throughout the year, the company was said to be on track to achieve profitability, and there was even talk of an IPO. But now Sameer’s departure has raised more questions.

This after the company’s losses touched INR 5K Cr in FY22 from INR 1,600 Cr in FY21, according to sources, as reported exclusively earlier by Inc42.

While BharatPe announced that Sameer would transition from the role of CEO to strategic advisor effective January 7, 2023, the statement didn’t mention any reason for the change in leadership. Sources indicated that he was dismissed for non-performance in the past year.

Deja vu given that there was similarly no reason given for Sameer replacing Ashneer Grover as CEO in August 2021. Grover was CEO of the company for just under three years — not a long stint by any stretch — having come on board as cofounder and CEO in November 2018 before being replaced by Sameer.

But the huge losses are a clear sign of things worsening at BharatPe under his leadership.

The current chief financial officer Nalin Negi, who was earlier the CFO at SBI Cards, will take over as the interim CEO.

The company did not comment on a timeline for the appointment of a new CEO, but said one would be appointed. “We have recognized the need to dedicate time and resources to finding the leader who will continue to catapult BharatPe to new heights, and we are grateful for the commitment from Suhail and Nalin,” said former SBI chief and BharatPe board chairman Rajnish Kumar in a statement.

Negi’s appointment is the third CEO in BharatPe’s short but eventful past two years. Having only come on board as CEO in August 2021, Sameer lasted just 16 months at the top role. Such a short tenure raises several questions about how the company performed under Sameer.

While we don’t know the exact financial picture, it’s clear that the leadership chasm at BharatPe has left the company far behind the competition at a critical time. As we will see, with huge losses, the company is in a precarious position given the expected disruption in fintech in the year to come.

Leadership Vacuum At BharatPe

Indeed, more questions can be raised about Negi’s appointment as interim CEO, who has been with the company only since August 2022, less than four months.

If Negi being handed the interim CEO role in such a short span of time is a surprise, there is some reasoning to it. There is simply no long-term employee left to take over the leadership after a major exodus in the past two years. Three CXOs quit besides two founding members, a cofounder and key business heads.

In mid-2022, Ashneer Grover and his wife and BharatPe head of controls Madhuri Jain Grover were dismissed. This was followed by cofounder Bhavik Koladiya, as well as founding member Satyam Nathani, who had been with BharatPe since early 2018, even before Grover came on board.

Another founding member Tanmay Sagar had earlier departed in May 2021 to launch OTPLess, where Koladiya is now the CEO. Nathani quit in July 2022 to join Sagar as the cofounder of OTPLess.

In addition, the former BharatPe head of compliance Sagar Satija left in 2022 along with chief revenue officer Nishit Sharma, the head of institutional debt partnerships Chandrima Dhar.

And then, Vijay Aggarwal, chief technology officer; Nehul Malhotra, head, PostPe; Rajat Jain, chief product officer for lending and consumer products; and Geetanshu Singla, vice president technology also moved out.

This has left a serious continuity vacuum at BharatPe. And essentially, with the exception of cofounder Shashvat Nakrani, there are not many from the old guard at the company.

In his tweet reacting to the change in CEO, Grover wondered why Nakrani did not take over as CEO.

Indeed, the IIT Delhi graduate has been quiet in the background throughout the whole saga. Currently, Nakrani owns 7.5% of BharatPe and is now the only cofounder in the company to still have that title.

He decided to begin the BharatPe journey while in college and founded the company along with Koladiya in March 2018. Grover joined the duo as a cofounder in November of that year.

Even though his title on LinkedIn says founder, it’s not clear what his role in the company is. As far as we were informed by sources, Koladiya was handling the tech and product verticals, while Grover was driving fundraising and business development.

During the power tussle within BharatPe that erupted last year, Nakrani largely refrained from commenting in public. The only time he spoke out was to deny reports that he wanted Sameer removed from the CEO post.

CEO Vs CEO: BharatPe’s Bitter 2022 

Post his exit from BharatPe, Grover has been extremely critical of the company, Sameer and the state of operations. He has questioned some of the growth figures cited by the company as fake and claimed credit for product launches.

Interestingly, Grover, who was the managing director at the time of the exit, was the CEO before Sameer took over the position. In August 2021, BharatPe appointed Suhail Sameer as the CEO, promoting him from the group president position.

An MBA from IIM Lucknow, Sameer was the first group president at BharatPe, having come in at a time of rapid expansion. Before BharatPe, he had worked with the RP-Sanjiv Goenka Group and its consumer VC fund RPSG Ventures, as well as McKinsey’s power and cleantech divisions.

Grover’s quote in the press release nearly two years ago says: “At BharatPe, we have a high performing team attracted to our focussed execution, growth potential and culture of meritocracy. I am happy to appoint Suhail Sameer as the CEO in recognition of stupendous business growth he has delivered during the last 1 year and his ability to lead from the front. I am also honoured to invite him to the Board of Directors.”

Like Grover, Sameer has made plenty of angel investments, including backing Shwetank Jain’s Hash, as mentioned above. He has also invested in Locofast, UpScalio, Goldsetu, OTO Capital, AdmitKard, G.O.A.T Brand Labs, FableStreet, Breathe Well-being, dezerv among other startups.

But now Grover and Sameer are in the weird position of being on opposite sides and also in the same boat of being replaced as the CEO.

Last year, Grover had also alleged that Sameer had become the “board’s puppet” because of the probes initiated by the company into Grover’s dealings. The two also got embroiled in a social media feud over allegations of the company not paying employees.

Further, in his recent book Doglapan, Grover has alleged that Suhail “would call Bhavik and Shashvat for drinking sessions and poison them against me”.

He also claimed that Sameer was insecure about this position in the company. “He was also insecure as I had informed him that a new CFO would be joining us soon, which he thought would clip his wings,” Grover wrote in the book.

BharatPe Deep In The Red; What Next? 

While in April last year BharatPe claimed that it had $400 Mn parked in the bank and a monthly cash burn rate of $4 Mn, the fintech unicorn did not file its financials for the year. It claimed to have recorded revenue growth of 4x in FY22 to $100 Mn, but this cannot be verified independently.

In FY21, BharatPe reported a loss of INR 1,619.05 Cr or (roughly $200 Mn in 2023 terms), and as per sources, this touched INR 5,000 Cr in FY22.

Sources claimed that BharatPe investors raised questions around the higher expenses, which grew 3X year-on-year (YoY) in FY22, despite the startup not raising any new funding. And fundraising in this current market seems a distant dream if the company has not managed to trim its losses.

Without a look at its financials, it’s hard to pin down just where BharatPe can cut costs and get leaner, which is extremely critical to attract investors.

The other big problem is that lending margins are the only real steady revenue for fintech companies given that digital payments is dominated by UPI and its zero MDR. Most fintech companies have looked to pump up loan numbers, and there’s plenty of competition here for BharatPe from the likes of LendingKart, Pine Labs, Open, Mobikwik, Paytm and a host of other players.

It is not clear how much of the claimed runway of $400 Mn in the bank is still at the disposal of the company. Immediately following FY22, the macroeconomic situation has soured and the slowdown in consumer spending in India due to inflation would have definitely hurt BharatPe’s volume growth, considering the company is focussed on small-ticket purchases at kiranas, retail and grocery.

The transition to quick commerce would have also made volume growth harder for BharatPe, which does not have a consumer-facing payments play to capitalise on.

On the merchant payments side, UPI continues to rule the long-tail market, while Paytm and others such as Pine Labs are the strong competition in the large retail space. In short, BharatPe has its work cut-out.

Will the focus on Unity SFB pay off? What exactly did the company do in the past year to run such heavy losses, even though it claimed to have seen major topline growth in lending? What is the actual financial state of BharatPe?

Will BharatPe Survive The Post-Jio World?

These are some of the questions that Negi, Kumar and the board have to answer in the next few months. The fintech ecosystem is not about to get any easier with the entry of Reliance Jio and Jio Financial Services.

If Jio’s entry is likely to spook Paytm, which had INR 3,186.8 Cr revenue in FY21, then one can imagine what it might do to BharatPe which earned just INR 119 Cr in that very year.

Despite its high $3 Bn valuation, BharatPe’s revenue is a drop in the bucket when it comes to the financial services sector.

Now the onus is on Negi, Rajnish Kumar and BharatPe’s board, which includes BP Kanungo, former Deputy Governor of RBI, and Kaushik Dutta, current Chairman and Independent Director at Zomato and Nakrani. Besides this, the board has four investor nominees. Of course, Sameer is likely to remain on the board as the strategic advisor.

The drama surrounding Grover has made it hard to look at BharatPe without controversy in our minds. Kumar, the former chairman of State Bank of India, has sought to revamp the image, its management and leadership and turn the Unity small finance bank into the centrepiece of BharatPe.

But given the slew of controversies and public glare, the focus has turned to fixing corporate governance. Even as BharatPe has done in that in the past two years, the market has turned. Fintech companies are scrambling for profits and looking to supplement their lending businesses.

It’s a tough time to be a fintech company that’s not profitable; forget one where there’s no real leadership and the ship is being led by a captain that’s not quite settled in.

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