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BharatPe’s co-founder Bhavik Koladiya has ended his association with the company citing disagreements with the fintech firm’s management, two people aware of the matter said.

Koladiya, who ran the product and technology operations of BharatPe and formally operated as a consultant on BharatPe’s records, severed his association with the company in the last week of June “due to disagreements with the company’s CEO (Suhail Sameer)," one of the people said, requesting anonymity.

Soon after the exit of BharatPe’s other co-founder and managing director, Ashneer Grover, in March, after a three-month-long public spat with the company’s board, Koladiya decided to pursue “criminal action against Ashneer to get back his shares (which Grover was holding on Koladiya’s behalf). The company’s investors also assured support to Koladiya from the outside."

But just a week before he was to approach a Delhi court, Koladiya was asked not to pursue the case against Grover “because a settlement was being discussed" with the estranged managing director. Grover was asked to leave the company over allegations of financial irregularities.

“You should not file any lawsuit against a shareholder. We are looking for a settlement with Ashneer," Koladiya was told by the company, as per the person aware of the discussions who requested anonymity. Following the conversation, Koladiya decided to end his ties with BharatPe, the person said.

“Disagreements with Suhail aside, Bhavik already made up his mind to focus on building something outside BharatPe," the second person said, also requesting anonymity.

BharatPe was incorporated in March 2018 by Koladiya and Shashvat Nakrani (who was then studying at IIT-Delhi) as co-founders, each owning 50% of the company. Koladiya was the company’s face and negotiated with investors for funding. Three months later, in June 2018, Grover joined as the third co-founder.

When Grover joined, the shareholding structure changed: Grover got a 32% stake, Nakrani held 25.5%, but Koladiya remained the largest shareholder in the company with a 42.5% stake, according to Registrar of Companies filings.

However, in December 2018, just before Sequoia came on board as an investor, Koladiya’s name went missing from the founders’ list as the investor was reluctant to invest in a company whose founder was convicted by a US court in 2015. Koladiya was convicted of credit card fraud. And since then, Grover has become the face of the company.

Mint was the first to report that Koladiya is still technically the single largest shareholder as “part of Bhavik’s equity is kept with Ashneer and part with Shashvat. Bhavik still owns close to 5.75% stake in the company."

Out of the 8.4% stake in the name of Grover, about 3.5% is of Koladiya’s; whereas Nakrani held a 2.25% stake on behalf of Koladiya.

The first person cited above said that Nakrani recently transferred Koladiya’s stake back to him.

The person said that a few weeks back, Grover offered to settle the dispute with BharatPe, but was silent on what he would do with Koladiya’s stake.

“The settlement talks are off the table now because if Ashneer sells anything, then Bhavik has the first rights over the shares," the first person added.

Koladiya has been running BharatPe’s tech from the start. He led a 60-member tech and product team. Apart from managing BharatPe’s technology platform, an agreement was put in place where Koladiya would have offered tech consulting to Unity Bank, a joint venture between Centrum and BharatPe.

Apart from being a stakeholder, BharatPe is also a technology service provider. Resilient Innovations (the company that runs BharatPe) has set up a new entity, Resilient Technologies Pvt. Ltd, with a new team to offer technology services to the bank.

In May, Koladiya set up a consulting firm Finix Partners, to offer services to the bank via Resilient Technologies.

“That partnership is also not going to happen anymore," the first person added.

Koladiya, according to the people cited above, has moved back to Surat.

When contacted, Koladiya said, “I want to focus on balancing my work and family. I am a zero-to-one guy who likes to keep innovating with new ideas. Since Shashvat and I founded BharatPe, we have always believed in and worked towards making BharatPe into a movement that will outlive and outgrow our ambitions. BharatPe is now a very late-stage company with a strong management team and a clear path to profitability and IPO. BharatPe is one of my largest investments, and I intend to stay invested for the foreseeable future. BharatPe’s brightest days are ahead of it. Everything else is just gossip and rumours."

"Bhavik Koladiya has been associated with BharatPe as an independent consultant, guiding our product and technology teams. His contract tenure ended on July 31, 2022 and he expressed his desire to spend time on other assignments outside BharatPe.

Bhavik has been one of our biggest advocates and has been an integral part of our journey in becoming one of India's largest fintech companies. While we wish him the very best, we are also sure that he will continue to guide us in the future as well, as and when we need," BharatPe spokesperson said in its statement.

On whether there has been any settlement talks with Grover, BharatPe added, "Please note that we have initiated appropriate action against former founder and MD, Ashneer Grover. We would not like to comment on the legal process concerning such action."

 

ABOUT THE AUTHOR

Arti Singh

Arti Singh has been a business journalist for 15 years. Over the last five years, she has closely tracked India's fintech space and written important deep-dive stores. As deputy editor, she covers the intersection of finance and tech at Mint.
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