Ashneer Grover, the founder of Fintech firm BharatPe, has resigned and distanced himself from the company. Ashneer Grover’s resignation has once again brought to the fore how things turn once the founder goes against the company’s board, management or investors.
This is not the first time that its own founder has had to resign from a company or he has to fight with them for a long time. Similar big cases have come to the fore in India’s startup ecosystem. These include many well-known startups from Ola, Housing.com to Flipkart, whose founders have been in the news due to disputes with the company’s board or investors. Let us look at some such cases-
Ola Co-Founder Vs SoftBank
In April 2019, Japanese investment firm Softbank had decided to invest $1.1 billion in online cab-booking service company Ola. According to a Bloomberg report, however, Ola’s co-founder Bhavish Aggarwal turned down the investment offer.
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According to the report, SoftBank’s funding proposal would have increased its stake in Ola to 40 per cent. Also, SoftBank was trying to acquire a larger stake in Uber during this time, which could lead to the merger of the two companies. However, Bhavish Aggarwal was demanding to retain his control over the company.
Negotiations on this deal first started in 2017. In this, SoftBank proposed an immediate investment of $250 million and the remaining $1.1 billion was to be invested over the next six months.
The report said that Agarwal had sought a clause to give veto power to the founders on the appointment of any new CEO. SoftBank was not prepared to accept this clause.
This stalled the conversation. SoftBank in parallel discussed whether to invest in Uber. In January 2018, he became its largest shareholder after investing $9 billion. SoftBank then wanted the two companies to merge. SoftBank’s impact on Ola was alarm bell for Agarwal.
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The standoff led to SoftBank’s attempt to acquire Tiger Global’s stake in Ola. The report said Ola then amended its corporate bylaws to ensure that any sales made by investors were required to obtain board approval. This stymied the move of SoftBank.
The publication also noted in the report that Agarwal was not present at the events hosted by the SoftBank-backed founders and Masayoshi Son, the founder and current CEO of SoftBank. Agarwal’s absence was particularly felt at an event that was attended by Saudi Crown Prince Mohammed bin Salman. Saudi Arabia has provided nearly half of SoftBank’s $100 billion Vision Fund.
In the report, an Ola spokesperson denied any tension with SoftBank.
Housing.com Board Vs Rahul Yadav
In July 2015, Mumbai-headquartered online realty platform Housing.com said it had “removed its CEO Rahul Yadav with immediate effect” after a board meeting.
Rahul Yadav is also the co-founder of the company. The board said in a statement that Rahul’s behavior towards investors, the business ecosystem and the media was inappropriate and was detrimental to the company. Prior to this incident, Rahul had been in the headlines continuously for the last several months.
He wrote an email to the MD of Sequoia Capital India, warning him to distance himself and accusing him of inducting Housing employees into his company. This email was leaked.
He then clashed with the Times of India Group and alleged that since the Times Group had its own property listing website, he was defaming Housing.com.
After these reports and other cases of misbehavior came to light, when the board was considering replacing them, they wrote a letter to board members with investors like SoftBank calling them mentally insolvent and also saying that they Can prove it on their face.
Soon after, he made headlines for gifting employees an amount of around Rs 200 crore from his shares and challenged his critics like Deepinder Goyal of Zomato and Bhavish Aggarwal of Ola to do the same.
Sachin Bansal vs Walmart
Flipkart co-founder Sachin Bansal had resigned from the company in May 2018, as its acquirer Walmart wanted only one founder on the company’s board. Walmart acquired Flipkart for about $16 billion. In this acquisition, Sachin Bansal sold his 5.5 percent stake for 1 billion.
Snapdeal Founder vs Investor
Snapdeal co-founders Kunal Bahl and Rohit Bansal wrote a letter to employees in April 2017 saying they were taking some discussions forward for the loss-making online marketplace. This indicated that the firm’s control was now out of their control.
In March 2017, there was another report that Softback, Snapdeal’s biggest investor, was in talks to sell it to Flipkart or Paytm. However, the company had denied these reports then.
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