Founder-CEO Ashneer Grover on why BharatPe chose not to be a unicorn, for now 

$18 million is split between angels and ESOP holders. We had 21 individual angels. After this round, 12 of them will be exiting fully. So, we would be left with nine angels on the cap table. On the ESOPs, roughly $1.6 million worth of liquidation is being given to the ESOP holders; essentially everyone who has vested shares will be participating. The number is 22. Minimum any guy would be getting is Rs 13.5 lakh and maximum Rs 1.5 crore.

Is the ESOPs liquidation event reserved for senior executives?

This includes everyone from CXO level to the first employee we would have got... across finance, operations. So anyone who was offered ESOP and had vested ESOPs will get this.

What stopped you from increasing the deal size or negotiating for a better valuation and becoming a unicorn? Is that not something you wanted to negotiate?

Not at all. It is the other way round. I could have easily become a unicorn. I could have raised more money or even could have asked for a higher valuation either of which could have got me to the unicorn club. Here's the realisation—we have had a great run but all said and done, we are still a two-year-old company. The way outsiders behave with you, the way employees behave everything somehow gets driven by the perception. So I never want us to be perceived as a company that has established something already or is already set because there is a lot to do.

I just wanted to ensure that we don't get into the trap where we start thinking of ourselves as have ‘arrived' in any form, that's why becoming a unicorn was clearly not an option. I didn't want either the external perception of us to change or the employee perception of themselves to change.

It does. You start getting clubbed with companies which are much bigger like Paytm, PhonePe and RazorPays of the world. I genuinely don't believe we are there as yet. We have achieved great things in two years but there's a lot that needs to be done. So I don't want any clubbing of our company with these companies which have been around for 10 years, have seen multiple cycles.

But you said you had interest from investors to pump in more money?

Exactly, I do not want to take names but there are at least eight big investors, I ended up saying no to. Some of them were willing to write $100 million cheques individually. Availability of capital was not an issue at all. It is just about being disciplined. Once you raise too much money, you loosen your purse strings. We have built the business, so far, by just raising $60 million in two years, which is the lowest any payment company has spent to achieve the kind of scale we have.

What sort of expansion plan is lined up for the POS as well as the lending business?

On the POS machine, we do a TPC of roughly about $1.5 billion. We need to raise it to $7-8 billion in the next two years. On the QR, we want to increase it from $7 billion to $21-22 billion in the next two years. On the lending side, we want to build a $700-million loan book. That's where we are sort of in terms of the plan. That has not changed. In fact, the fundraise was driven by the plan, not the other way round.

Nothing has been going wrong. We applied for a licence in August 2019. Everything was perfectly fine with our application. It is just that the RBI changed its plan from Mauritius as a country. It is an industry-wide issue, not just an issue specific to us. Anyone who has money through Mauritius, the government is right now not looking at those entities. It is true for CRED, Jupiter ...

To what extent have your plans to acquire Punjab Maharashtra Cooperative (PMC) Bank escalated?

We have made the final bid along with Centrum. So now the ball is in the RBI's court. RBI has to invite us for discussion. The application was made on February 1.  Now RBI will get back to us. Our work is done. We have the intent. We have the capital. Between Centrum and us we also have the credentials. Jaspal Bindra at Centrum was the head of Standard Chartered. He is a very well-known personality among the RBI circle. We are extremely well-positioned. Now it is for the government and the RBI to decide what is the path they want to take.

What is the value PMC will bring on board?

At the end of the day we are building a lending business. So every lending business needs a balance sheet. It brings the ability for us to raise deposits and public deposits, which is the cheapest source of capital for lending. It lowers the cost of capital from a lending perspective. More importantly what we will do is that we will make it a purely digital bank because it would be the first bank with fin-tech as the management.

Our endeavour would be to build APIs (applications programming interface) and give APIs to other fintechs. We will make it the default bank for all fintechs to work with.

By when do you expect this to happen?

My sense is that RBI would want a solution either way by March 31.

Is there any other company or NBFC that you are in talks to acquire?

No, see I have done acquisitions all my life. I was an investment banker. I am very very clear that very few acquisitions actually make economic sense. Now it's not like just because we have money we will go after anything and everything in the market. So nothing else as of now. PMC is all we are looking at.

If you manage to get PMC, then you won't need the NBFC licence.

Then the NBFC licence might not be necessarily required because we will have a much superior licence, which is the banking licence.

If the PMC acquisition happens, will you continue with the aggregation model?

These are all hypothetical things. We can't make a plan on something which has not happened. If PMC happens, at least one year will go into making sure that the bank gets back into shape. And from there on, we will see what model makes sense.