By Suveen Sinha:
In 2003–04, Vijay Shekhar Sharma was hardly ever seen at home, not if there was still daylight.
As One97 grew bigger, it needed more money because it was running more servers, bigger teams, and had to pay royalty on the music. But the tech bubble had popped and all technology companies were seen as spoiled children to be straightened out. Finally, the money ran out. So One97 took loans, and then some more loans at higher rates of interest, as high as 24 per cent, and became caught in a vicious cycle.
Any money that came in went into paying the interest, office rent and salaries for the twenty-five people team. Vijay, who paid himself the last, had no money to pay his house rent. So he would go home only late at night and scale the walls to get into his own house to sleep. He would wake up early in the morning and run away so the landlord would not see him.
His landlord was a rich, genial soul. ‘Beta,’ he would tell Vijay, ‘you should save some money for house rent.’
‘Sorry, uncle,’ Vijay said each time, ‘The problem happened only this month, it will be fine the next month.’
But next month would only be worse, and the time came when Vijay did not have money for food. So he would pile on to friends so he could eat at their place. The paranthewallah near Moolchand Hospital in south Delhi, known for his delicious, low-priced fare served late into the night, became a source of sustenance. Vijay would walk down to it after work, but with an eye on his wallet. Two cups of tea in the winter was a luxury—a far cry from the days of golgappa shots without vodka. ‘The circle of life,’ says Vijay, with a guffaw.
Some days he would do training or consultancy work to make money. He would go to companies and teach their employees about the Internet. He was paid Rs 1000 for a day of training. For some of the companies, he would set up a website and email while his team ran the One97 operations. The money Vijay earned this way kept One97 going.
While on the training-consultancy circuit, Vijay ran into Piyush Agrawal, whose Polar Software needed help with its technology. Vijay’s work took Agrawal’s company from no profits to a handsome profit.
‘Why don’t you become the CEO of my company?’ asked Agrawal.
‘I can’t,’ said Vijay, ‘I have my own company to run.’
‘Think about it,’ said Piyush.
And Vijay did.
This was in 2004. Vijay was twenty-six. His parents were frantically looking for a suitable bride for him. But there was a problem.
Vijay’s father would initiate negotiations with a girl’s family. The girl’s side would initially be very keen, given Vijay’s status as an electronics and communications graduate from Delhi College of Engineering. Someone from the girl’s side would come over to meet him, then things would go very quiet.
Vijay’s father was puzzled. But then he figured it out. The girl’s side went quiet once they discovered Vijay was not bringing home a guaranteed amount in salary every month. The father was now pushing Vijay to shut down his company and take up a job, one that would pay him at least Rs 30,000 a month. That, the father believed, would be a strong magnet to fetch him a good girl. He also ticked off Vijay for having taken loans from friends and family. ‘I don’t like it,’ he would say.
All this would bring tears to Vijay’s eyes. He had given his blood and sweat to One97; he could not bear to shut it down. But he could no longer stave off his father’s nagging.
So he spoke to Piyush Agrawal.
‘Why don’t I work for you half a day every day and you pay me Rs 30,000 a month? I will be your CEO, but only for half of the working day.’
For Piyush, it was a steal. He was getting a CEO who had brought his company into profits even while working as an outsider. Now he was ready to go full-time. So what if it was for only half the working day? Whoever got a good CEO for Rs 30,000 a month?
The deal was done. Vijay told his family he had become a CEO and was earning Rs 30,000 a month. In 2005, Vijay got married to a girl from Jaipur.
The wedding was a simple affair. It had to be, since Vijay had no cash flow and he did not want his parents or his wife’s parents to spend on the wedding. The budget had to be kept within Rs 2 lakh, which he had had borrowed from a chap who was his partner in XS Corps, his first company.
He has a delightful little son now, on whom he dotes, and who visits him at office from time to time and sits in his lap. But Vijay is still not sure that getting married was the right thing to do.
‘The spouse has a lot of expectations from a new relationship. But I could not devote time to my wife even if I wanted to.’
All his time was spent trying to keep One97 going, which was becoming difficult with each passing day.
One day, Piyush Agrawal asked Vijay what his company did and why it needed so much of his time. Vijay told him about One97’s business of systems and content, how the content was delivered to the consumer through texts and calls, and how the money was charged by the operator and shared with One97.
‘How can I help?’ asked Piyush.
‘Give me a loan of Rs 8 lakh,’ said Vijay. ‘That is the amount of loan I need to repay.’
‘I cannot give you Rs 8 lakh just to repay your loan. But I can invest this amount in your company,’ said Piyush.
That he did, and also gave space in his office to One97 so Vijay could be close to both Polar and One97 at the same time. In return, Piyush got a 40 per cent stake in One97.
Piyush sold most of his stake later for Rs 87 crore. That should be enough to make him one of the shrewdest investors in the history of India. But had he held on . . . well . . . One97, with its ownership of the Paytm mobile wallet and an online marketplace, is now valued at billions of dollars. It also has a payments bank licence now.
The high current valuation makes some people question Vijay’s wisdom in giving away 40 per cent for just Rs 8 lakh and some office space. They forget that the value of money depends on the need it serves. Had Piyush’s Rs 8 lakh not come in at the time it did, One97 may have shut down and there would be no Paytm. In a sense, Piyush’s money was Vijay’s angel round of funding.
Later, Polar sold its office and moved. And still later, when Vijay had the money, he bought back the same office.
‘This is the Polar Software building,’ he says, moving his hand in a sweeping gesture.
The circle of life!
Note: Excerpted with permission from Penguin Random House India from “The Tip Of The Iceberg” by Suveen Sinha.