Also in this letter:
■ Reliance joins calls for India to tighten marketplace rules
■ Paytm shares crash to under Rs 1,000
■ Now, Karnataka invites Elon Musk to set up Tesla plant
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BharatPe’s Ashneer Grover takes voluntary leave until March-end
Ashneer Grover, the controversial cofounder and managing director of BharatPe, has taken a voluntary leave of absence until the end of March.
In a statement issued on Wednesday, he said, “I’ve been relentlessly at work building up BharatPe for almost four years. After much deliberation and introspection, I plan to take a temporary leave of absence from BharatPe till March-end. I will return on or before April 1, 2022.”
Mum’s the word: Grover has been in the midst of a controversy after an audio clip of his purported phone conversation with a Kotak Mahindra Bank employee was leaked earlier this month, but his statement did not not address the controversy or the allegations against him.
It said instead he would use his time off to “rejuvenate and refresh” himself for Bharatpe’s “next sprint of value creation” and “invest in myself personally”.
“I expect to spend the time thinking more deeply about the next phase of product development and BharatPe’s path to profitability and IPO. I will also double down on investing in myself personally,” he added.
‘Best interests’: The company’s board earlier said it had accepted Grover’s decision, which it agreed was “in the best interests of the company, its employees, investors and merchants. It said the company would continue to be led by chief executive Suhail Sameer, who was appointed to the post in August.
Inside dope: Two individuals aware of the discussion told ET that investors in BharatPe’s board had met Grover last week to discuss the matter and the future course of action.
Controversies: Grover has been in the spotlight since the turn of the year for all the wrong reasons.
In the first week of January, an anonymous handle on Twitter — ‘bongo babu’ — had posted a SoundCloud link to an audio clip of a man – allegedly Grover – abusing and threatening the bank employee over the phone in October after missing out on Nykaa’s initial public offering.
Grover initially tweeted that the audio clip was fake and that “some scamster” was trying to extort $240,000 in bitcoin from him. He also shared screenshots of the alleged emails seeking money.
The same week, the audio clip was taken off Twitter and SoundCloud and Grover deleted the tweet claiming it was fake.
On Monday, we reported on a leaked email exchange from August 2020 between Grover and Harshjit Sethi of Sequoia Capital India, in which the BharatPe founder allegedly used several expletives. Sethi, who has been with Sequoia Capital India since 2015, was promoted to managing director in the venture team in July 2021.
The previous day, we had delved deep into Grover’s controversial past, quoting the founder of a startup who has known him for over a decade as saying, “I have seen this problem in some of the prominent founders in India. It’s called the God Syndrome. Often when things don’t turn out the way they intended, he said, “it comes out as extreme anger and frustration.… Ashneer’s alleged remarks over the call are a typical example of this.”
Grover and BharatPe have also been embroiled in a public spat and legal battle around the ‘Pe’ suffix with rival PhonePe, which is owned by Flipkart.
Fundraising machine: Despite the controversies around it, BharatPe has been one of the well-funded fintechs in the Indian startup ecosystem and recently raised $370 million in a round led by Tiger Global.
Timeline: Ashneer Grover’s fortnight to forget
Reliance joins calls for India to tighten marketplace rules: report
Reliance has called for tighter regulation of marketplace ecommerce platforms to ensure such websites treat all sellers equally, Reuters reported, citing four sources.
Reliance is India’s biggest retailer, with more than 12,000 stores, and has expanded its ecommerce business in recent years. Yet it still lags market leaders Amazon and Flipkart, which it counts as key rivals.
Details: At a closed-door government meeting called by India’s industry promotion department, on Tuesday, Reliance told officials that India needed special regulations to ensure “non-discriminatory” treatment of sellers on marketplace websites, three of the sources told Reuters.
- Reliance did not name any company, the sources said, although its remarks are in line with calls for greater regulatory oversight of Amazon and Flipkart in India.
- Traditional retailers also raised concerns at the meeting and were supported by a senior Reliance executive, the sources said.
- One of the sources said an Amazon executive said during the meeting that the company had taken note of concerns raised by the retail trading community.
- The Confederation of All India Traders said it had urged officials to establish an ecommerce regulator to hear retailers’ grievances at the meeting.
The issue: India’s small retailers have long alleged that Amazon and Flipkart, which is owned by Walmart, give preferential treatment to certain big sellers in which they hold discreet interests. The US companies deny this, saying they only run marketplaces connecting customers with independent sellers.
As a local player, Reliance can sell goods to consumers directly on its website or apps, something foreign platforms cannot do in light of stricter regulations designed to protect the local retailers.
Between the lines: The intervention by Reliance signals its growing rivalry with Amazon and Flipkart in the race to capture one of the world’s fastest growing retail markets.
“It appears Reliance is pushing the government hard (on regulations) so that they succeed in ecommerce,” one e-commerce executive who attended the meeting said.
Tweet of the day
ETtech Done Deals
■ Software-as-a-service (SaaS) company Lummo (formerly known as BukuKas) has raised $80 million in a funding round led by Tiger Global and Sequoia Capital India. Other investors included CapitalG, the growth fund of Google’s parent company Alphabet; NuvemShop CEO Santiago Sosa; and former Lazada CEO Max Bittner.
■ IndiGG, the India sub-decentralised autonomous organisation (subDAO) of Yield Guild Games (YGG), announced that it raised $6 million in fresh funds to boost the adoption of play-to-earn games in the country. The funding round saw participation from Sequoia Capital India, Lightspeed Venture Partners, Jump Capital, Variant Fund, Dune Ventures, Griffin Gaming Partners, Transcend Fund, Animoca Brands, Play Ventures, Backed and Sfermion, IVC, Emfarsis, among others.
■ Fresh produce foodtech venture Pluckk has raised $5 million (around Rs 37 crore) seed capital from Exponentia Ventures, a fund focussed on emerging business ideas in both B2C and B2B.
■ NFT marketplace Diginoor said it has raised $1 million in its seed funding round that saw participation from Cred founder Kunal Shah, Contrary Capital, Polygon Fund, Sandeep Nailwal, Abdul Wahab Al-Halabi (MD at Embassy Capital) and others.
■ Online social investing platform Threedots has raised $4 million in a funding round led by Kalaari Capital amid heightened interest from youngsters in participating in the equity markets. The Bengaluru-based company said it will use the funds for strengthening the product and expanding its team from 30 to 50 in the next few months.
■ Recruitment automation platform Kula announced that the company raised $2.7 million in funding from Venture Highway, Together Fund and Global Founders Capital. Kula is a recruitment platform that widens the talent pool by unifying all sources and automating the candidate outreach and engagement. The company’s focus with this infusion of funds will be on getting its product out to customers.
Paytm shares crash to to under Rs 1,000
Shares of One97 Communications, the parent company of Paytm, hit an all-time low as they plunged as much as 5% in a weak market on Wednesday.
Taking stock: During intraday trade, the shares of One97 hit an all-time low of Rs 990, down 54% from its issue price of Rs 2,150. They ended the day 4.3% down at Rs 997.4 on the BSE. The scrip has been on a slippery slope for a while now, having closed in the red 11 times in the past 12 sessions and declining 26% in the process.
New depths: The stock is now even closer to the most bearish target price of Rs 900 on the counter, set by Macquarie analysts, who also set the tone for Paytm’s initial fall when the stock was listed on the exchanges.
Sinking feeling: One97 Communications, the largest ever initial public offer (IPO) on Dalal Street, was listed with much fanfare two months ago. Now, the most bullish target pegs the stock at Rs 1,875, nearly double its current level, in the next 12 months.
Now, Karnataka invites Elon Musk to set up a Tesla plant
Joining a list of Indian states wooing Tesla’s chief executive Elon Musk to set up a manufacturing unit, Karnataka has projected itself as the “electric vehicle (EV) hub” of India. Over the weekend, several states like Telangana, West Bengal, Maharashtra, Punjab and Tamil Nadu have invited Musk to set up shop.
Also Read: Maharashtra, Punjab, West Bengal, Telangana invite Tesla to set up shop after Musk tweet
“With over 400 R&D centres, 45+ EV startups & an EV cluster near Bengaluru, Karnataka has emerged as EV hub of India. Mr @elonmusk, Karnataka would be an ideal destination to set up @Tesla plant. Bengaluru is already Tesla’s maiden address in India,” Karnataka Minister for Large and Medium-scale Industries Murugesh R Nirani tweeted.
Speed bumps for Tesla: The Tesla boss had on Thursday tweeted about ongoing challenges in India, in the latest of numerous such tweets over the past few years.
Taxing issue: Tesla’s request for tax cuts was first reported in July 2021, when sources told Reuters that the company had written to Indian ministries seeking a big reduction in import duties on electric vehicles. Soon after, Musk tweeted that Tesla was likely to set up a factory in India if successful with imported vehicles.
India charges 60% duty on vehicles with a net CIF (cost, insurance, freight) value of up to $40,000 and 100% duty on vehicles that cost more. All of Tesla’s vehicles will be subject to the higher duty, given their pricing. Tesla has sought 40% duty.
Meanwhile, local players such as Mahindra & Mahindra opposed Tesla’s request for slashing duties, arguing that it would hurt investments in domestic manufacturing.
Today’s ETtech Top 5 newsletter was curated by Arun Padmanaban in New Delhi and Zaheer Merchant in Mumbai.
