In July 2021, BharatPe grabbed the headlines for the perks it was offering new recruits. Sports cars, superbikes, fancy gadgets, trips to Dubai and early appraisals were on offer for those joining the company’s product and engineering teams.

Seven months later, all this seems hollow. The company is in shambles and employees are reported to be queuing up to leave. There’s talk of several transgressions, a spat between the board and cofounder Ashneer Grover and BharatPe’s reputation has been dragged over coals and memes.

We’ll look at the latest state of affairs at the fintech giant, but here are two stories that also deserve your attention:

• ?️In Conversation With Ex-Twitter Chief: Inc42 caught up with Invact Metaversity’s Manish Maheshwari and Tanay Pratap on the startup’s future plans, challenges and more.
• ? What’s Happening At ScoopWhoop: The content platform has been rocked by another sexual harassment case involving ex-CEO Sattvik Mishra.

?‍♂️?‍♀️ Bye, Bye, BharatPe

At least that’s what some employees are looking to say very soon. Reports this week talk about the hiring market being flooded with resumes of BharatPe employees looking to move out of a rocking ship.

No one would blame them; after all, things are looking pretty bad for the fintech unicorn which has stumbled from one controversy to another in 2022.

How The Tables Have Turned 

The complete breakdown of things at BharatPe is indicative of a deeper problem. If we are to believe what employees are saying, Grover was pretty much the authority on many of the day-to-day things. There may be more skeletons in the closet, but at the root of it, the problem is not paying enough attention to creating a safe culture.

Which brings us back to the employees. When we reported on the talent wars among startups last year, one of the things investors told us is that throwing money at the problem is not how talent is retained. A strong culture that fosters a sense of belonging is a stronger tether than material benefits.

Sources told Inc42 that employees that did avail of the perks offered by the company had to pay levies and taxes of many of the imported items. So sometimes it is too good to be true indeed.

From Bad To Worse

After cofounder Grover’s leaked spat with Kotak Mahindra Bank, a slew of allegations have hit BharatPe, including potential embezzlement and payments to non-existent vendors. All this has cast a shadow on the corporate governance within the company as well as the arguably inadequate due diligence on the part of the investors.

When we compared the situation at BharatPe to Housing.com last week, we also realised that the employees will be caught in the middle. Now, over 400 employees are said to be looking for a way out of the company, as reported by Moneycontrol . As Grover and CEO Suhail Sameer slug it out in public, employees seem to be in a panic.

Now, startup founders and entrepreneurs are trying to bring in those exiting BharatPe’s doors. The company tried to buy its way out of the talent wars, but is now finding that there’s little to actually keep the soldiers on their side when it’s most needed.

CEO In Defensive Mode

The situation has prompted Sameer to communicate with the employees and urge them to trust the board of directors and await the results of the investigation currently ongoing. He’s said to have told employees that the company is in talks to raise more funds and there’s plenty of fuel in the tank anyway.

However, Grover is unlikely to back off so quickly after publicly demanding that the company buy back his 9.5% stake. So there’s no guarantee how the future will pan out for the company.

“We have $500 million in the bank (including $100 million that we have invested in Unity small finance bank),” Sameer told employees, adding that this is 4x the amount the company has spent so far in building the business.

Meanwhile Ashneer Grover’s wife, Madhuri Jain Grover has written to independent consultant Alavarez & Marsal saying she is considering legal action against the firm for allegedly leaking details of its internal investigation into BharatPe’s financial disclosures and operations. The invoices were allegedly created by Shwetank Jain, Madhuri’s brother and founder of tobacco brand Hash.

In an official statement, BharatPe said, “BharatPe continues to be an attractive destination for career growth. Our attrition levels are below industry standards and any reports or rumours around increasing attrition rates in recent weeks are baseless and untrue. The company continues to induct new talent. Our employee base has continued to grow month on month over the past two months. BharatPe strongly objects to unsubstantiated rumours being used to spread misinformation about the company.”

In the end, it is the employees that always get caught in the middle of such leadership tussles as seen in the past with the likes of Housing.com. It’s not only early-stage companies that fall by the wayside due to power struggles or uncertainty about future. This will definitely impact employee morale and mindset in the medium term. All BharatPe can do now is hope that it comes through in the clear after the investigation.

Indian Startups’ IPO Corner

• ? Eyes On IPO: Fintech startups PayMate and Navi have converted into public companies with plans to list on stock exchanges by 2022
• ? Quarterly Performance Of Listed Startups:
  • IndiaMART (Q3 FY22): Profit INR 70 Cr, Revenue INR 210 Cr
  • EaseMyTrip (Q3 FY22): Profit INR 40 Cr, Revenue INR 85.7 Cr
  • Nykaa (Q3 FY22): Profit INR 29 Cr, Revenue INR 1,098.4 Cr
  • Zomato (Q3 FY22): Loss INR 67.2 Cr, Revenue INR 1,112 Cr
  • Freshworks (Q4 2021): Loss $74 Mn; Revenue INR $105.5 Mn
  • Policybazaar (Q3 FY22): Loss INR 298 Cr; Revenue INR 212 Cr
  • Paytm (Q3 FY22): Loss INR 778 Cr; Revenue INR 1,456 Cr
  • Nazara (Q3 FY22): Profit INR 30.2 Cr; Revenue INR 185.8 Cr

Here’s the weekly performance of listed tech companies we are tracking:

Indian Startup Funding Counter 

• ? Three Unicorns In A Week: Inc42 exclusively reported ElasticRun’s $300 Mn round at an estimated $1.5 Bn valuation, while logistics startup Xpressbees and home decor startup Livspace also made it to the unicorn club.
• ? Led by Polygon’s $450 Mn fundraise, overall, Indian startups raised $1.5 Bn across 50 deals — a week-on-week rise of 166.5%.

Drone Rules, 2021 Amendments & Other Top Stories

• ?Amendment In Drone Rules: After the ban on drone imports this past week, the government has decentralised the drone pilot license process
• ? No Relief For Tesla: India has categorically rejected Elon Musk’s request for a tax rebate on imported Tesla cars, asking the company to first make in India
• ? India’s Pegasus Probe: What’s the latest in India’s investigation on the Pegasus WhatsApp spyware that has rocked the Indian government?
• ?Spacetech Shoots For The Stars: The government is likely to allow FDI in the space sector to boost innovation at a critical stage for the industry
• ? Flipkart’s Live Commerce Play: With a feature named ‘Feed’, the ecommerce giant is testing interactive commerce in the fashion segment
• ? No Legality For Crypto: FM Sitharaman has stated taxes on crypto gains have nothing to do with legalising cryptocurrency.

That’s all for this week, folks. Watch out for a more data-packed newsletter every Sunday as we recap the week’s biggest stories and developments.

Update note: February 13, 2022 | 15:40
Added BharatPe’s statement on employee attrition.