Exclusive: Inside Ashneer Grover’s Third Unicorn – CrickPe’s Funding & Future, Insurance Play & More

BharatPe cofounder and former MD Ashneer Grover’s latest venture Third Unicorn Private Limited which he had claimed will be a “market-shaking business” is all set to launch an umbrella of products, following the rollout of the fantasy gaming app CrickPe.

In a no-holds-barred interaction with Inc42, Grover revealed why he’s bullish about the CrickPe model and said Third Unicorn has already raised $5 Mn (INR 40 Cr) at a valuation of close to $36 Mn (INR 290 Cr). He claims this is one of the highest valuations received by a seed-stage startup in 2023.

Launched in January 2023, Third Unicorn has been backed by celebrities such as musician Badshah as well as food giant Haldiram’s family office (reported previously) and early stage fund Venture Catalysts.

But CrickPe is just the first of many products being planned by Third Unicorn. The outspoken entrepreneur revealed that the company will also enter the insurance space in the near future (more on this below).

Further, Grover claimed CrickPe is aiming to become profitable by the end of this year’s IPL season. And despite the heavy competition in this space including unicorns such as Dream11, Games24x7 and MPL, Grover insisted that CrickPe will not spend lavishly on marketing campaigns or brand endorsements with cricketers.

Of course, it’s hard to look at anything Grover does without the BharatPe lens. CrickPe’s launch comes at a time when Grover is caught between multiple lawsuits filed by his former company and its cofounders. The company and its former MD have been embroiled in a public drama for the past year over alleged irregularities in operations and financial reporting.

Subsequently, a public row erupted, Ashneer’s wife Madhuri Jain Grover was also ousted from BharatPe, and the company is now looking to claw back the shares that Ashneer held.

There’s the INR 88.7 Cr defamation suit filed by the fintech unicorn and two other cases filed by BharatPe’s other cofounders Bhavik Koladiya and Shashvat Nakrani. Grover said he is only a call away when it comes to settling these legal disputes, but with conditions for whom he will talk to.

In his characteristic blunt style, Grover opened up about why he believes CrickPe will succeed, the Third Unicorn product roadmap, and of course the legal tussles with his former company.

Edited excerpts:

Inc42: You are launching CrickPe at a time when the fantasy gaming space is already crowded with so many major players. Do consumers really need another such app in the market?

Ashneer Grover: You never know what consumers need unless they try the product.

When I started BharatPe, Paytm was valued at $16 Bn. In 2018, when I launched BharatPe’s QR code we had competitors such as Paytm, PhonePe and Google Pay. The top five payment companies in India were backed by global tech giants. Everyone had raised good money and had great backers. But that didn’t stop me from building a business. Ultimately, it is the product that matters.

I am very clear in my life that I don’t have to prove anything to anyone. It is not a comeback as many are saying. What do I have to prove? I am doing things now which according to me will create a bigger impact.

Not necessarily societal impact. I don’t claim to be a mahatma or bhagwan ka aadmi (godman). But the impact is fundamentally about what is missing in the market and what creates value.

Inc42: How will CrickPe be any different than any other app though?

Ashneer Grover: CrickPe is a simple fantasy game at its core. While we are starting with IPL, I am very clear that I am going to restrict my app to only games where India is playing.

Fantasy as a space is big and it is becoming bigger. I don’t believe too much in card games, poker, rummy. I am focussed on cricket. On the revenue side, cricket has over 80% share in fantasy gaming.

I want a share of this huge market, and I am not going to foray into other gaming.

In general, in cricket fantasy apps, from a pot of INR 100 Cr, INR 20 Cr is reserved by the platform and INR 80 Cr is distributed in the prize pool. My core question is why are cricketers not being paid from this total.

So we have tried to do it this way: INR 80 Cr as winnings for users, INR 10 Cr will be kept as a profit pool by the app and INR 10 Cr will be distributed to cricket bodies and cricketers.

Out of INR 10 Cr, 1.5% is given to the Board of Control for Cricket in India (BCCI), another 1.5% to two participating teams and rest will be distributed to the cricketers on the basis of their performance.

We want to bring the fans closer to the cricketer through the platform and also make it a monetisation tool for cricketers.

Inc42: One can argue that cricketers don’t need another monetisation tool given they earn crores from other endorsements and for playing for their teams

Ashneer Grover: Yes, cricketers earn more through endorsements, but this is also a negative.

As a nation we are cricket crazy. By rewarding cricketers for their performance, we are removing one point of friction between fans and cricketers.

For instance, in the IPL, a player is auctioned and his salary is fixed before he actually performs. But if he does not perform, he is trolled in the public. Similarly, cricketers get criticised for making money through ads, especially when they aren’t performing on the field.

What I want to do is bring positive change in this regard i.e. reward cricketers on the basis of performance. I want to make sports meritocratic – the money goes to the player who performs best in sport, not the one who acts best in front of the camera.

CrickPe users will also be able to see how much each cricketer is winning or won at the end of each match. This way the user feels closer to the game. They see their name against their favourite cricketers, which adds an element of relatability which is currently missing in fantasy games.

The Supreme Court said it is a game of skill, but many people still consider it similar to betting, because the prize money is getting distributed among anonymous users, but the moment you add the idea that cricketers are also getting paid, it changes the game.

Inc42: Before we move ahead, what is your obsession with the suffix ‘Pe’? CrickPe sounds very similar to BharatPe.

Ashneer Grover: I actually fought cases and ensured that there is no monopoly on the word ‘Pe’, including against PhonePe. Secondly, this is about what CrickPe will offer — i.e. we pay cricketers.

Inc42: But why would international cricketers who are playing leagues like IPL need the money from a fantasy gaming app?

Ashneer Grover: It is like saying why would Mukesh Ambani need more money. He has billions already. Do you go around asking him why he needs more money?

Let’s say you are an ugly looking cricketer, so you don’t get ads. You can’t just survive on what you earn on the field. Even they need more sources of income, especially if they perform well.

Doing ads has become the default source of money. It is not the additional money, but the nature of the money. It is for the first time a cricketer will believe that I am being paid more money for actually doing good work. Over time, this prize money can become much higher than the ads money,

I will give you the maths. India has the world’s largest fantasy gaming market. It’s a INR 40,000 Cr opportunity in cricket alone.

There are roughly 100 days of cricket in a year which involves Indian players as per our estimates. So each INR 400 Cr of fantasy gaming for every day that cricket is played.

If at all I am able to move a majority of the cricket fantasy gaming to my app and If I pay INR 40 Cr or 10% of that INR 400 Cr to the cricket boards and cricketers, that’s so much more than what they earn from a single match day.

I am happy to see what people can’t see. For instance, if Virat Kohli wins the player of the match award, he gets something like INR 20 Lakh. But with CrickPe, he could even earn INR 20 Cr from the same match.

Eventually, I will make sure Dream11, MPL will move to this.

Inc42: But where does this money pool come from?

Ashneer Grover: The money pool comes from users who join the contest and make their fantasy teams. The first contest for any player worth INR 50 will be provided by the CrickPe. But later, the money pool comes from the people.

Inc42: Fantasy gaming or real money gaming has invited regulatory attention and there are litigations going on in various states. Many have also banned online gaming. The industry is fraught with challenges. How do you plan to deal with that?

Ashneer Grover: I come from the fintech world, where regulation is everything.

Regulations have not banned real money games but allowed us to operate within limits. The challenge here is that lawmakers, politicians consider fantasy gaming as gambling when the Supreme Court says it is a skill game. For the last 10 years, the gaming industry including Dream11 have fought the battle that fantasy gaming is a skill game and ensured that app stores at least list these apps.

I have done enough research on BCCI’s anti-corruption norms and hired the best lawyers to ensure that there is no confusion with unethical practices.

What I am essentially giving to the BCCI, any state cricket board and cricketers is a gift from my platform. I would not enter into any direct contract with anyone. It is simply an independent reward from us. We are also going to have TDS for such payouts. BCCI regulations require the cricketers to disclose gifts they have received from third parties, which I will be doing on my app anyway.

Unethical practices like match-fixing arise when one pays cricketers before matches are played to influence the outcome of the game. But in this scenario, there is zero contact with any cricketer. I also don’t intend to employ or hire any cricketer as a brand ambassador of CrickPe since I want to maintain the sanctity of the platform.

Inc42: There are challenges related to advertising real money games in a few cities. How are you going to go about marketing CrickPe?

Ashneer Grover: I am not even doing a TV campaign. We will purely rely on social media campaigns that we can restrict via geography. I want to make a profitable business. I want to come out of the first IPL with profit with fewer costs. I am trying to do something audacious.

What Dream11, MPL spends in one marketing campaign is what I have just raised so far. So I am going to compete with these companies through innovation and not capital.

The moment the first match happens and people learn that a cricketer has won an award through CrickPe, it will create intrigue. When a match ends, the users will want to know two things: How much I won and how much the cricketer won?

What was Shark Tank? At the end of the day, we Indians want to see money moving hands. I am trying to do exactly the same thing with this fantasy app.

Inc42: How will you tackle the high customer acquisition costs in fantasy gaming where platforms have to burn money to add users?

Ashneer Grover: I am in a privileged situation. I am utilising my personal brand. If I have a strong social media game, it is a good thing. You will see me in CrickPe’s ad campaign as well. I am a strong believer in creating a personal brand.

I went to Shark Tank to create my personal brand. It is a stupid thing that you are investing INR 8 Cr every year without anything to show against it.

I have no qualms in accepting I am one of the strongest personal brands in the country now. Of course, I am going to leverage this to expand my business. And CrickPe pe will not be the only product coming out of Third Unicorn

Inc42: So what’s next? And who are the people building these products? In what capacity is Madhuri Jain Grover associated with Third Unicorn Ventures?

Ashneer Grover: Madhuri is the cofounder. I don’t want to reveal right now what the next product is going to be, but if you are in the insurance space you should be very scared. If you are a VC and you are investing in the insurance sector, be scared.

That is all I can say at this point.

Inc42: And what about the fundraising for Third Unicorn? You had earlier said that the capital raised will be from homegrown investors.

Ashneer Grover: We have raised INR 40 Cr ($5 Mn), the pre-money valuation is INR 250 Cr and the post-money valuation is INR 290 Cr. This will be utilised in CrickPe and other products that Third Unicorn launches. I want to go down the path of raising limited capital. For the development of CrickPe, we have spent zero rupees.

While raising INR 40 Cr, there was a dilution of 13-14%. In fact, it is one of the biggest seed rounds in terms of the post-money valuation in current times. I am also not going to raise any VC money that come with terms attached. I have made it clear in my book Doglapan that Third Unicorn is going to be run by my wife and I as cofounders. One more cofounder will become the director, if he wishes to. No one else will have a board seat.

I have raised money from some very solid people in India. These include Venture Catalysts, Haldiram family office, rapper Badshah, cricketer Shikhar Dhawan’s venture capital fund Da-One Ventures and Mumbai-based content creator firm Super Fat Studios.

These are people who have earned money through their own work. I am actually happy talking to businessmen in the country who want to invest small amounts.

When you are starting a startup, you want to scale up, and hire in mass. But this is the third startup I am building and I am very clear that I will not be a mass employer. The whole CrickPe app has been created by a team of less than 10 people including me. In any other startup, you will find ten people at the reception desk alone.

We also aren’t going to give ESOPs to employees. I think the Indian ESOP system is completely broken. It needs an overhaul. Till that happens, I am not going to subject my employees to losses.

Employees haven’t made any gains on ESOPs, even during IPOs, because of the taxes they have to pay. But I will surely give cash bonuses and rewards to my employees.

Inc42: This sounds similar to what you had said as BharatPe MD that you will give BMW bikes to employees.

Ashneer Grover: Everyone in my company is aligned to making profits in terms of cash rewards. We aren’t hiring anymore. There are lakhs of CVs in my inbox.

There is a lot of disguised employment in the Indian startups which is now coming out as layoffs in the downturn. I don’t want to do that.

Inc42: You are battling court cases against BharatPe, Shashvat Nakrani and Bhavik Koladiya. Quite hectic at your end! Will you finally arrive at a settlement with BharatPe?

Ashneer Grover: It is not hectic at my end at all. It is hectic for those who want to drive an agenda.

I cannot comment on anything which is in court. Everyone in the market knows my narrative. Just adding one case after another doesn’t make you truthful. The more cases you file, the more frivolous this looks. I haven’t taken them to court.

If anyone wants to talk to me, I am a phone call away. I am not going to file any litigation. I don’t want to waste my time.

Inc42: So the phone call offer is for BharatPe’s Rajnish Kumar or Koladiya and Nakrani?

Ashneer Grover: No, I don’t talk to puppets.

---

Update | 27th March, 22:50

Names of the celebrity investors have been updated on company’s request.