The Chief Executive Officer (CEO) of Grex Alternative Investments Market has stepped down after a squabble among the founders of this Pune-based startup.
Backed by a few investors, three of the four co-founders of Grex asked Manish Kumar to step down as the CEO and continue only as the managing director.
Abhijeet Bhandari, who is one of the co-founders and heads market development at the startup which provides a platform for its peers to raise money through equity issuances, assumed the role of CEO. Mr. Kumar, while confirming his resignation, said the company now had a dual working structure wherein he would focused on long-term strategies related to products, solutions and overall governance.
In response to an e-mail query, Mr. Manish Kumar, said: “People thought that we were pursuing too disruptive and almost impossible goals until it began to happen of late. However, the difficult nature of this probably had the better of my co-founders’ patience and they asked for a directional change in leadership at Grex.
“I resigned from the CEO part of my role the very next day (when we had this internal discussion) as I believe that one must give way for such change to happen should my co-founders really believe in it.”
Surojit Nandy, a co-founder who heads operations at Grex, said the change did not happen abruptly though there were divergent views on the focus areas of the company and who should lead it.
“There were dissenting views but just like in any company the majority view was taken into account. There was commonality in the views of three co-founders and the natural choice for the CEO’s chair was Abhijeet,” he said.
“In the new structure, Manish would focus on the long-term direction for the company while Abhijeet will look at the deliverables in the near term. I do not see any impact of this on the working of Grex.”
Grex was started in 2014 by Mr. Nandy, Sanjay Nishank along with Mr. Kumar and Mr. Bhandari with an aim to provide an organised platform for startups to raise early-stage funding.
The company is backed by about 70 investors and had around 40 employees.
It is valued at approximately Rs. 150 crore based on the last round of fund raising that happened in March.
Till date, three startups had raised funds through Grex that boasts of nearly 500 registered investors (who want to invest in start-ups) and about 600 companies at various stages of getting ‘transaction ready’ to raise funds through the platform.
Being a startup itself, it is not insulated from issues that such ventures face nowadays. Grex is facing an issue that the high-profile housing startups also faced last year albeit on a much smaller scale.
First transaction
In October, Grex closed the first transaction on its platform when Gurgaon-based Kleeto, an information management company, raised Rs 1.5 crore. Thereafter in May, two startups — SolarTown Energy Solution and Comarete Technologies — raised a total of Rs.1.5 crore through Grex.
While SolarTown raised the funds from 10 entities, Comarete saw participation of 11 investors in the first round of fund raising.
Interestingly, since the company was dealing with equity issues, it was attracting a lot of attention, especially since the capital market regulator Securities and Exchange Board of India (SEBI) has also created a framework for listing of startups in India.
Though the guidelines were notified in August last year, till date no startup has shown an interest towards listing. Grex, however, is not a SEBI-regulated entity.
Since investing in a startup is often associated with risks, Grex has tied up with law firms, investment bankers, custodians and even a rating agency to grade the companies and make them compliant with the regulatory requirements.
It also followed KYC — know your customer — procedures so as to mitigate the risk of unaccounted money coming into the system.
