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Ezetap was created by some of the biggest names in the startup industry today, including Sanjay Swamy, who manages Prime Venture Partners, and Abhijit Bose, who was formerly the India Head of Whatsapp. Byas shares his experience of steering the company through turbulent times and his own learnings from the journey. Ezetap was recently acquired by Razorpay.

Know about:-

  • Winning a contract with SBI
  • Becoming device agnostic
  • Transition from CFO to CEO way of thinking
  • Tactics for a successful acquisition

Read the text version here:-

[00:00:00] Byas: Hi, I’m Byas Nambisan I’m CEO of Ezetap I was the CFO for Intel’s largest business, which was their mobile microprocessor.

[00:00:11] Byas: And we used to keep coming back home and during that time Bobby and Anuja would say, Hey, what are you doing in a big company? Come work for, come join us Bobby’s doing the start up soon And in 2014, when I had finished it, my finished the next stint at Intel, I said, maybe, I should consider doing this.

[00:00:33] Byas: I went from, I remember March, 2014, I was thinking, Hey, what should I do next? At that point, I’m still thinking I’m a lifelong Intel person. I’d already been there 20 years, and then Bobby called me. So I spoke to Bobby and he, Bobby said, look, if you’re interested in start ups, come here.

[00:00:51] Byas: This is the hotbed. You can, I’ll obviously show you my startup, but I’ll introduce you to flipkart. I know all the people here, you can talk to all of them. So I went back to my room and I told my wife, Irene, I said hey, Bobby said I should travel there and check it out. Maybe in a couple of months I’ll go and by the way, my wife, who’s not Indian, when, during the four years here, she loved India.

[00:01:18] Byas: She didn’t want to leave. By the time I came back to the room, she said, you know what? I booked you for a flight for this Thursday, your flight to meet Bobby. So that’s how I ended up in Bangalore. I met with Sanjay Swamy, who’s one of the founders Bobby and Bhaktha and I liked what I saw and I knew nothing about payments.

[00:01:41] Byas: And

[00:01:42] Akshay: One quick question here.

[00:01:44] Akshay: Bobby is Abhijit Bose, right?

[00:01:48] Byas: That’s right.

[00:01:48] Akshay: Okay. Who’s currently heading WhatsApp in India.

[00:01:51] Byas: He’s currently heading WhatsApp in India.. Correct.

[00:01:53] Akshay: Okay. Okay. Okay.

[00:01:55] Byas: And I met with the team. One of the things I was concerned about it was that, Typically a lot of the startups are, started up by people earlier on in the career, young.

[00:02:09] Byas: I had already been, working for 20 years and I was concerned about, just a cultural fit, and so this, it was reassuring to me that, this was Bobby and his co-founder Bhaktha was actually, had worked with me at Intel and Sanjay. So I found, the cultural fit was a big part of my decision making, and I found a fit there.

[00:02:34] Byas: And the environment, and that was going on in India was so dynamic that motivated me. I didn’t know all about it, but what I knew I found very exciting. The material piece didn’t matter to me. I was going from a big corporation to, a place that was, a tiny room, right?

[00:02:52] Byas: But that completely didn’t matter to me. In fact, about six months later, someone asked me, but, hey, how is this going? And my response, I wasn’t even thinking, I just blurted out. I said, I wish I had done this earlier. , that was my response, right? I was enjoying it. It was great.

[00:03:11] Byas: So that’s my story and I’m still here at Ezetap.

[00:03:16] Akshay: So one question here so yeah, Ezetap started in 2011 and you joined in 14. So from that 11 to 14 period just gimme like a history of it. What would be original idea with which, yes.

[00:03:28] Byas: So the original idea was really Sanjay.

[00:03:34] Byas: Okay. Sanjay used to be in FinTech. He was CEO of mCheck. And he’s a very creative guy, always has ideas, always thinking about ideas, and he had this idea and he was working on the site. So then he happened to meet Bhaktha actually, and said, I’m trying to do this. We want to do, make payment acceptance easy with a little device that plugs into the phone.

[00:03:58] Byas: And, Sanjay explained what he was thinking and Bhaktha told him, you’re completely wrong. It won’t work. The way you are saying it. But I know how I can make it work. And so Bhaktha started working with Sanjay in experimenting with little reader. A little plug-in reader. And as at the same time, Sanjay also

[00:04:18] Akshay: This was inspired by Square in the US I guess.

[00:04:22] Byas: Pardon?

[00:04:23] Akshay: This was inspired by Square, like in the US Square had some

[00:04:26] Byas: It was inspired. Yes. It was roughly the same. Square had done it and, we were looking to do it. They were looking to do it here. And now in the same, at the same time, Sanjay with two other players, Bala and Shripati, were also setting up an angel fund called Angel Prime.

[00:04:46] Akshay: Okay.

[00:04:47] Akshay: Which today’s Prime Venture partners.

[00:04:49] Byas: Yeah. Today’s Prime Venture fund. And Bala was also seeding, some other companies. So they were looking to hire some people to run the two different ideas. They were actually interviewing Barbie for the other company. Sanjay was interviewing Bobby for the other company.

[00:05:05] Byas: And now Bobby had also been in FinTech in India. He had worked in NGP before, and NGP and Antech used to be competitors and they knew each other and they were also neighbors, right? We all lived in the same neighborhood and it struck Sanjay that Bobby would be the better, Bobby would be a good fit for Ezetap versus the other company.

[00:05:27] Byas: And he stole Bobby from Baha for this, for Ezetap. So that’s how Bobby Baktha, came together with Sanjay and Sanjay since he was gonna run Angel Prime, which is now Prime Ventures. He said he wasn’t going to be acting actively in the execution. He’d be on the board,

[00:05:47] Akshay: And Sanjay had already seen one exit, like his previous venture Zip Dial was acquired by Twitter.

[00:05:54] Byas: But at the point they had not invested in Zip Dial yet. So Ezetap was the first company that they initiated. So it’s, in a way, it’s a little bit more closer to Sanjay’s heart than even Zip Dial. Yeah.

[00:06:08] Akshay: Okay.

[00:06:09] Byas: They made . Yeah. So that how it started and they started working on the first version, which was the magnetic card reader in, this was late 11 and got the first funding investment in 12.

[00:06:24] Byas: But then in 13 what happened was the government changed the rules that in you needed to have a pin and chip. So they needed to, we needed to go back to the drawing board, redesign, rebuild everything, and rearchitect the process because the economics changed from the simple reader that was there to now needing a more complex device.

[00:06:49] Byas: And at the time, there wasn’t an inexpensive device. At the time, it was, we had estimated, or they had estimated that India really needs a device that is not more than 3000 rupees really closer to 2,500 rupees and nowhere in the world, even from China, could, you could one get such a device.

[00:07:08] Byas: So we ended up building, designing and building our own device. And it was a little, ended up being a little bit more expensive at around 3,500, but we were pricing it at, 2,500 forward pricing and thinking, okay, once we get the volumes we can scale it down, we’ll drive down the volume now.

[00:07:30] Byas: That was very instrumental. When I look back in really driving down the market, because once we had that device and we positioned it at between 2,500 to 3000 others had to compete and, bring, drive down the prices and then, then we saw the Chinese step up in volume on these impulse devices and the prices started coming down.

[00:07:54] Akshay: Okay. What did the device look like? This was like not a standalone device, right? It would connect with your mobile phone.

[00:08:00] Byas: It needed to connect with the mobile phone.

[00:08:03] Akshay: A Bluetooth connection.

[00:08:05] Byas: It was a Bluetooth connection. It had two versions. We had a Bluetooth version, so it was roughly about the yay big, two inches.

[00:08:12] Akshay: Which is like calculators. Okay.

[00:08:15] Byas: Yeah. It’s a very tiny calculator device and you could connect it to your phone either with a USB cable or with Bluetooth.

[00:08:23] Akshay: Okay. Okay.

[00:08:25] Byas: That was the early version of the device.

[00:08:27] Akshay: And you’d have an app on the phone where you would punch in the amount that you needed to.

[00:08:31] Byas: Correct. So the app on the phone, the Ezetap app was in the phone, can talks to our server. It talks to this, and by the way, this had to be a very, it was a very secure device, had to go through full certification. I’m still proud that we are one of the few companies in the world that actually had a fully certified device.

[00:08:49] Byas: I don’t think any other Indian company has even done that. That we did it ourselves. It was built and manufactured out of Bangalore. Yeah, so very proud of what we did there. Of course, later on, once the volumes started coming, the Chinese volumes, we couldn’t keep up in terms of pricing and, manufacturing costs.

[00:09:08] Byas: And eventually we went. Device agnostic. And the device was always, for us, it was a means to an end. That wasn’t the purpose. The purpose was the software platform and enabling that and, whoever, whichever device was the right fit, we could use.

[00:09:25] Akshay: What was the end? The end was to make payments frictionless.

[00:09:29] Akshay: Or make allow merchants to accept digital payments instead of cash.

[00:09:33] Byas: Yeah, it was. The thinking was when you looked at the market back then there was digital payment acceptance, but it was typically in high end retail, 90% of offline retail and point of service was non-card accepting, non-digital payment accepting. Even Amazon and flipkart, the delivery people went around with pieces of sheets of paper. Bobby and team actually helped flipkart, digitize their first few. flipkart was our first customer back then by in the delivery space. They, they would ride with the agents, through a delivery process and show that, Hey, look, you take all these papers and the agent has to come back to the warehouse and now reconcile each of these papers with the systems.

[00:10:25] Byas: That would take a lot of time if you did it digitally. You saved a lot of time and you are increasing your productivity because you can do more deliveries in the same time, because you don’t need to come back and do all of this. You reduce your errors, you reduce, you increase customer convenience, etc, right?

[00:10:43] Byas: So they had to go through all that process of fine tuning and creating that solution. . And so then that was in 2012. So when I joined Ezetap had just started, changed over to the new pin and chip card and we were, the first version of the pin and chip card was being refined.

[00:11:05] Byas: And at the same time, we had just won this large contract with SBI. SBI had a vision of, reaching out to 500,000 merchants in India with an m-plus solution. And we had won that, we had won the contract and that’s when I joined.

[00:11:25] Akshay: I was under the assumption that most of these banks have their own feet-on-street who go out and sell devices to merchants.

[00:11:31] Byas: Yeah. So that, yeah, so this is where we had where I’ll take the blame.

[00:11:36] Byas: We’ll take the blame. We, in through the, and that was our, the process we had with other bank partners like HDFC, etc, where they did the sales, we did the servicing of the device. They would actually.

[00:11:51] Akshay: So you were like a device partner for software.

[00:11:55] Byas: We were the device and software partner. They would actually do the sales. We had envision.

[00:12:02] Akshay: For a bank this would help them acquire accounts. Cause every merchant who takes their import solution needs to open a current account.

[00:12:10] Byas: Right. So when we had bid in this RFP process with Citibank, we had followed a similar logic that, they would do the selling and we would only need to do the logistics and the support.

[00:12:23] Byas: And we had priced it that way. But as we jointly found out, they actually needed us to do more selling. And we, and then the economics didn’t quite make sense for us because that was more, a lot more expensive. And we were a small company back then and, couldn’t really afford that.

[00:12:40] Byas: And so we, anyway, we weren’t able to get the volumes we were thinking at back then.

[00:12:46] Akshay: Had it raised funds when you joined?

[00:12:49] Byas: We had, it had already raised two rounds. We just closed the second round when I joined.

[00:12:54] Akshay: How much had it raised by then?

[00:12:56] Byas: It had raised so that’s a good question.

[00:12:59] Byas: I wanna say it had raised three plus it had raised about 15, 10-15 million dollars total between the two rounds. Okay.

[00:13:09] Akshay: Which is pretty substantial for that time.

[00:13:12] Byas: Yeah. It was substantial for that time. And it was. And and then subsequent to that about a year and a half after I joined, we had raised another 26 million.

[00:13:24] Byas: Which was a, another, big race in 2015.

[00:13:29] Akshay: And so what was the the plan here? Was it to do like how Pine Labs does where they go and they have feet on street and they acquire merchants and allow them to accept digital payments? Or was it to

[00:13:43] Byas: It was a variant of that.

[00:13:44] Byas: The, our model was we wanted to work with the bank and really be the service partner for the bank. Okay. There were two areas we were trying to address. One was we saw a large tier of merchants who we thought would be best serviced by the banks because the banks have immense reach and we could be their technology platform and allow them to reach this at a very affordable cost.

[00:14:11] Byas: So we were focused on driving down the cost on the device and the service with the deployment being by the bank. The other area that we were focusing on was we felt there were there were enterprises that were not using digital and digital payment acceptance. And we wanted to provide a platform that could easily integrate into the enterprise ERP systems and enable them to offer digital payment acceptance at their delivery service agents.

[00:14:43] Byas: So for players like Amazon and, flipkart, etc, wherever you have an agent on the field, being able to accept payment on the field, but also having that payment completely integrated into, backend, so for example, one of the early customers who really take advantage of this was Airtel stores.

[00:15:05] Byas: were none of those. You walk in and you do did a payment transaction end of the day, all of those paper slips had to be manually reconciled. There was an entire department in the finance team in Airtel whose job was to call every store and say, please reconcile and hit the reconcile button.

[00:15:22] Byas: Otherwise our assistant, we won’t do it. Once we deployed our integrated solution where it’s automatically reconciled, every system is updated, they didn’t need all of that, right? It became so much more efficient. So we were addressing the enterprise segment with very, very complex integrations and a modular architecture that allowed us to do these complex integrations very easily.

[00:15:47] Byas: And at the same time, we were building a low cost platform for banks to deploy, right? In neither of these models will, did we actually have a large or did we have a large feet on street model, and we did experiment with it, and we found that as a very high burn model and we decided, we’re not going to go down that path.

[00:16:11] Akshay: Here, like the Airtel example you gave me this year talking of reconciliation of the card swipes. I remember there used to be a time when I would swipe a card and the merchant would keep one copy in their cash register.

[00:16:24] Byas: So you might have seen a little little metal stick that they just put the

[00:16:28] Akshay: yes

[00:16:30] Byas: on.

[00:16:30] Byas: They take it down and match everything.

[00:16:32] Byas: Yeah.

[00:16:33] Akshay: Yeah.

[00:16:33] Akshay: I had almost forgotten that they used to do that, and now they don’t. Oh,

[00:16:38] Akshay: yeah, okay.

[00:16:38] Byas: You don’t need to do all of that. So that was part of the revolutionizing, that we had achieved by driving down the cost and.

[00:16:46] Byas: And driving this digital digitization. , right? .

[00:16:49] Akshay: So you’re essentially for a large retail client, you would be like payments plus workflows. Not only would you do payments, but the workflows after that, you would auto get that as well.

[00:16:59] Byas: Absolutely.

[00:17:00] Akshay: And what was the economics of it like?

[00:17:03] Akshay: Typically, I believe there’s a 1.5 to 2%.

[00:17:05] Byas: If you were, yes. If you were. So if you are, there are two, again, there are two different models. One is you are the acquirer yourself. Okay. You are an aggregator, so you go out and acquire the merchant. The merchant then would be an Ezetap merchant and Ezetap would have a bank behind it.

[00:17:28] Byas: So in that case, when a merchant gets paid a hundred rupees, Ezetap could sell the merchant. We are offering you the service for, 1.5% fee. Okay? Ezetap will get to keep that 1.5%, but out of that 1.5% it has to also pay the issuing card. So the customer’s card company has to be paid, MasterCard has to be paid, visa has to be paid, etc.

[00:17:56] Byas: That isn’t a very, there isn’t a lot of margin. There isn’t actually, in some, most cases there is no margin. India was already very competitive, right? Because I don’t know if you are aware, but a, most cards today are platinum cards. The interchange on Platinum card is 1.8%, which means the acquirer has to pay the issuer 1.8% no matter what.

[00:18:22] Byas: So the, even if the acquirer is only charging the merchant 1% or 1.5%, They have to eat the delta. Okay? And now big acquirers like HDFC and others can do it because they also get float business. And a lot of the cards are already their cards. So they’re on both sides and they can, they don’t have the same cost, right?

[00:18:49] Byas: So that’s a very expensive proposition and we believe that. This is one of the things they told me when I joined as Bobby, I remember Bobby telling me, he says, look, we believe MDR is under pressure in markets like India. That isn’t going to be our primary focus. We are gonna focus on software as a service and just being charging a subscription fee to our banks, you pay us, a hundred rupees per month, per terminal, 120-150 rupees.

[00:19:20] Byas: And then if you wanted more integrated solutions, we would charge you, right? Customers were you taking more complex solutions would get charged a bit more. And the others was a monthly, subscription fee.

[00:19:33] Akshay: Yeah. For customers taking a more complex solution, it was per terminal pricing only, or a different?

[00:19:38] Byas: It was mostly still a per terminal per month fee.

[00:19:42] Byas: There was some exceptions where they said, Hey, we’re doing it in large volume, give us a platform fee, etc. But in general, it was a terminal per month fee.

[00:19:52] Akshay: Okay. Okay. Okay. Got it. And in addition to this you would still charge them the one-time cost of the terminal and that you became device agnostic.

[00:20:01] Byas: We became device agnostic. And in fact the terminal was often provided by the bank. The bank would buy the terminal. Initially, they were buying the terminal from us. And then giving it to the merchant. And they may sell it to the merchant. They may give it for free to the merchant. It just depends on their relationship with the merchant.

[00:20:20] Byas: And perhaps if you did so much transactions or you maintain so much balance, they will give it to you for free. Otherwise they’ll charge you something. But they were buying it from us. And today they don’t even buy it from us, they just buy it. We tell them, Hey, you just get whatever terminals you want.

[00:20:35] Byas: We’ll provision it on our system.

[00:20:37] Akshay: Okay. Okay. Okay. So like for Airtel they were just paying you for the software that was connecting the terminal to their ERP. The terminal itself was provided by their bank to them, or they bought it directly.

[00:20:51] Byas: Actually in that specific case with the Airtel, they bought it from us.

[00:20:56] Akshay: Okay. Okay.

[00:20:58] Byas: Yeah, we actually did more for them. We actually developed the app. So the app that was running on the agent’s terminal in the Airtel store was also developed by us. We had lengthier deeper work that we did with Airtel. They were, little different. But typically the merchant the enterprise would often get the terminals from their bank of choice, and we would deploy the software.

[00:21:23] Byas: We would, solution the additional linkages that were needed. And and then we would get paid typically by the bank or in some cases directly by the budget.

[00:21:34] Akshay: Okay. Okay. Okay. So this was a fairly good call of not rely on the MDRs because, we all know what happened to MDRs in India.

[00:21:43] Byas: Yeah. MDRs just collapsed, right? It. And we saw that coming there is, and and I think we, that insulated us even when, for example, when Covid hit and transactions stopped, our services didn’t stop. Our service fee didn’t stop. We obviously reduced some rates and we cut some deals, but our revenue didn’t go to zero.

[00:22:06] Byas: It dropped by 20% but it didn’t completely disappear. So that was the trade off we made in going down that path. And where we see opportunity to participate in the bips is when there are additional value added services like EMI, etc, being offered to the merchant or credit BNPL type credit.

[00:22:32] Byas: Then we can get. If a credit conversion happens, we could get a fee for that etc. So that’s an opportunity. We believe we’re still out there and we’re working on it. The transaction is the payment itself we believe is largely a commodity.

[00:22:49] Akshay: Got it. You date the 25 million fundraise in 2017. Why did you need to raise such a big round? Because you were not in a cash burn.

[00:22:57] Akshay: Your business model was not cash burn, right? There was no cash backs and you didn’t need to spend on feet on street and all.

[00:23:04] Byas: No, it was, yeah, you’re right. The reason we did that was. We were, we had just won that SBI deal and okay. And we were building devices, which at that point we were still losing money on the device because we, it was costing us 3,300, we were pricing it at 2,500.

[00:23:26] Byas: Which we felt once the volumes come down, we could make there. But for the next couple of, next year or so, we would need to sync some money. And then as we were trying to ramp our business, we also wanted to experiment to see if we could help SBI speed up the process by also deploying our own salespeople at the same time.

[00:23:46] Byas: So the device portion of it did suck up money in that interim. That was where our burn was. Even though we weren’t, we didn’t have significant burn on the acquisition side. We were having device side burn. . .

[00:23:59] Akshay: Okay. Okay. Got it. Got it. Okay. You went through that period where the original founders left and you transitioned from a CFO role to a CEO role.

[00:24:09] Akshay: Tell me about that period. Wa was it like a very high stress period for you and just tell me the story also what happened?

[00:24:15] Byas: So yeah. So we had been doing this was in 2018. We had I remember we had, I had just come back from a board meeting from the US and Bobby was still in the US at that point.

[00:24:32] Byas: And he was gonna come a few days later. When I landed at the airport, there was a WhatsApp message from him saying Hey man, when you get, when you land, give me a call. And I said, that was unusual. But anyway, I landed at whatever, two in the morning I was on, in the taxi, nothing to do.

[00:24:50] Byas: So I said, okay, hey, Bobby, you awake and it’s daytime in the US. And he called me and I had no inkling, I had absolutely no inkling, right? I was just completely surprised. He said, Hey, look, I’ve been doing this for a while, and, and I’ve been this opportunity has come, from WhatsApp.

[00:25:16] Byas: And, that seems like a really an opportunity to really make a big dent in India. And it’s something that I’m really, excited about. And I’ve told the board this, I was, my jaw was on the ground. Because I just, I hadn’t, it wasn’t that there was any flags saying, Hey, something like this might be coming.

[00:25:43] Byas: And I think it was. And then I thought about it and I said, okay, I was playing an active role in running the company. I could continue to do that. And then, in whatever capacity. So Sanjay came and talked to me and he said, Hey, this is happening, would you be willing to do the acting CEO role?

[00:26:03] Byas: We’re going to initiate a formal search. So I said, absolutely. And I hadn’t thought, I hadn’t come into this envisioning wanting to be CEO or it just so happened, right? And I just said, okay. I didn’t feel like I could walk away because if both of us walked away, then you know, the company would be really hit.

[00:26:24] Byas: We had split the job between us quite well, so either of us could have covered for the other but if both of us left, that would be a, that would be a big hole. It, and this was November, 2018. And, I took over as acting CEO and one of the decisions I’d made, and it was coming to that, wasn’t it just so happened that I was at the helm and actually pulled the trigger on it.

[00:26:49] Byas: Was that we would get out of our device business because that’s where our burn was. And as I was looking at, how we move forward, there were devices that were available at lower cost when, from other suppliers, didn’t make sense for us to keep burning devices. And it’s not just the cost of manufacturing the device.

[00:27:09] Byas: We actually had to have a hardware team that, engineered the device, certified the device kept up with every change. Every change requires a new certification. Okay? So very expensive, very complex process, very expensive. And we did really didn’t have the scale, you needed a scale of millions of units and nobody in India had a scale of millions of units to justify a device, which is why you don’t see any unique India only devices, because India doesn’t justify the volume.

[00:27:37] Byas: You need 5-10 millions of devices to justify that kind of scale. We had got out of that. But one of the, then the consequence of me making that decision to get out of the hardware business was that Bhaktha who was there as the hardware partner. There wasn’t the role that he was looking to play wasn’t, was, had gone away.

[00:27:58] Byas: So then Bhaktha said, Hey, look man, we are shrinking in our, we are now going to do, instead of designing new products, we’re just going to continue supporting the existing devices. That’s going to trickle down over time. Doesn’t make sense for me to stay on. I’m thinking of some new ideas and stuff.

[00:28:14] Byas: And, which was a consequence of the decision. But the decision was, economically it made sense. It, there was a lot of emotional attachment. I’m also a product guy, from the first day I was here, I would sit with Bhaktha and, with the product team trying to, Hey, why don’t we do this, do that, create.

[00:28:32] Byas: And it was something that was very dear to me, but, if I looked at it dispassionately, it just didn’t make sense to do it. And and I’m glad we made the call. It was the was the right call, was a tough call, but once we made that call, then it didn’t make, Bhaktha’s leaving then was made sense, or at least was a fall out of that.

[00:28:53] Byas: And then, so three months later, which is February of of 2019, the board came back and said they had done an extensive search. They had interviewed, they had interviewed me, they interviewed few other players and they felt that I was running the company well and would, ask me and, hired me to stay on.

[00:29:13] Akshay: When you made that transition from CFO to CEO your way of thinking, decision making, all of that must have also needed to evolve. Tell me about how your decision-making models evolved from the CFO lens to the CEO lens? .

[00:29:29] Byas: Yeah, it did. As much as I’d like to have thought no, I know.

[00:29:32] Byas: I was already thinking like this. No, it did. As a CFO, I took a very economics first look at the business and sometimes when you do that, you miss out the strategic aspects or you undervalue those or you get all, so overweight the economic factors versus the other factors.

[00:29:59] Byas: And that was okay for me to do because I knew Bobby would cover that, those factors. I would play the financial perspective card. He would play the business card. And then between the two, we’d get to the right decision, right? But when, once when I switched over, suddenly I had to do that.

[00:30:17] Byas: And I had to, I was coming from, this other space and I had to turn, transition over. And now there are employees, my team members will say they did see the difference, right? There were things that would’ve previously come and talked to me and said, Hey, should we do this?

[00:30:33] Byas: And I say this just makes no sense, right? Know, tell me how you make the money. And, I’d shoot it down and then he up the go. Then we’d have to more rounds. Now I’m like, yeah, but let’s try this. Even if it doesn’t make, economic sense up front let’s examine, all the other possible angles.

[00:30:51] Byas: And then make a decision. I had switched there, there was some decisions. I looked back and I said I was perhaps, maybe I did the, I took the wrong decisions. And then looking back in hindsight where, I said, Hey, look, this, that’s as low as we can go.

[00:31:08] Byas: I shouldn’t go any lower. Let’s cut our loss here. But in the process, I opened the door for somebody else to come in, into a customer where, into a, into a partner where I shouldn’t have, let that person come back in, someone else in cost us more to go back and get share, etc.

[00:31:26] Byas: So there obviously was earnings there. And so it is a switch that is required.

[00:31:32] Akshay: Yeah. So basically your appetite for risk increased, like you started taking more risks.

[00:31:37] Byas: I had to take more risk, so you have to have that ability to be willing to take risk. It’s not take, completely unjudged risk, but certainly your risk appetite has to go up.

[00:31:48] Byas: And for me, and I was in a transition where I was still CFO and then had taken on CEO , so I didn’t have that counterbalancing role. I viewed, Bobby and me, Yin and Yang and, I could go hard and he’d go, I know where he, I know where his mindset was. I could, be the counter foyer for that and, vice versa.

[00:32:06] Byas: And suddenly, when you had both roles in one it caused me to really think hard about, what I needed to do differently and what I perhaps was missing or didn’t do I had to change. And yes, that was a big change. .

[00:32:20] Akshay: How is the business doing in terms of what kind of top line was it generating?

[00:32:24] Akshay: If you could like, just to understand the growth like 2014, you joined since then, what kind of top line has it been growing at

[00:32:33] Byas: So far back man, you gonna ask me to like the numbers?

[00:32:37] Akshay: Not very broad. Try to remember, whichever you can.

[00:32:39] Byas: Yeah. When we were joined, we were sub I think at one, I remember the time we were trying to cross one crore in revenue.

[00:32:48] Akshay: Monthly? Annuall? What?

[00:32:49] Byas: In one we were trying to go across at the 0.1 crore of AR, of MR, monthly recurring. Monthly recurring revenue, right? . And so that would be, 12 crores monthly recurring. So let’s, at that point, let’s call it roughly 2 million, it might, if you was way less than that, and the goal was to get past that.

[00:33:11] Byas: So then on our, then with our SBI contract and HDFC and partnership, we were growing. Then, when I made the, the SBI, like I said, the economics didn’t quite work out, not blaming them. We had misjudged it when we did the the RFP of what the economics would be.

[00:33:32] Byas: We came a point we had to pull out of the partnership and we say, look, we can’t sustain this because we’re losing money on every deal. We’re not making money. So I had to pull out of that. And that took a hit onto our revenue, flattened our revenue, right? And and but then coming into 2018, into 19 we saw nice revenue growth 19 into 2021, 20-21.

[00:33:58] Byas: We were growing 50 to…

[00:34:00] Akshay: When you stop selling your hardware that would’ve also cost the

[00:34:04] Akshay: revenue to come.

[00:34:05] Byas: It also hit our revenue. Even though it didn’t hit our bottom line, it improved our bottom line, but it hit our revenue. So the revenue was, flattened because our device revenue just went away.

[00:34:17] Byas: And even though our subscription revenue was growing, it was being offset by the decrease in the device revenue. And and internally for management purposes, we really were only focusing on subscription revenue. We knew device was for us to a sort of a means to an end. And we knew that wasn’t the end goal because a device business margins are very low.

[00:34:39] Byas: You’re not going to get valuation of the device business, etc. It’s the subscription business. That’s the valuable piece, and that’s the one we focused.

[00:34:48] Akshay: Okay. Okay. So what did you close last year at revenue wise? And this would be like now a hundred percent subscription revenue, right?

[00:34:55] Byas: It was it’s almost, we do have some legacy customers who still have some device business there, right?

[00:35:02] Byas: And we were, but between if I look at just the subscription revenue last year we did over 10 million in AR on, on that. And that was a 50%, 60% growth over the prior year. Okay.

[00:35:22] Akshay: And this is not MDR shared. This is the part device.

[00:35:26] Byas: This is net revenue, right? This is not the inflated by MDR, etc..

[00:35:30] Byas: It’s just, pure subscription revenue. If you look at our total revenue last year we were closer to 14, 13 and a half to 14 million.

[00:35:41] Akshay: Okay tell me about razorpay the acquisition, which just happened what led up to it.

[00:35:46] Byas: So look what led up to it is we had, so I took over 2018, early 19 start we started changing some of our tactics and strategies.

[00:35:59] Byas: We be, started expanding on the bank front. We were doing well. We had done a last the last round we had done was in 2017. We had relatively low burn. We were, still living off of that. And I had gone back to the board and I said, look, if we hit these metrics then I will be, very optimistic of future growth and I want to go invest in that.

[00:36:22] Byas: And when we get to that, I’m gonna raise money. Yeah. I had set the expectation way back when I said second half of 2021, we’re gonna go out in the market to raise money for 2022.

[00:36:35] Akshay: But why did you need to raise money? Was it for spending on customer acquisition? Or on..

[00:36:40] Byas: It was discussed. So the, it was on spending on customer acquisitions.

[00:36:44] Byas: So the place that we wanted to go after, remember I told you we do SaaS, but we were missing out on a source of revenue, which is going after EMI. Okay. And this is where Pine had established a good franchise. And it’s worth tapping into. We needed to go into do that. But to do that, we had to both build the systems, get the people, there was investment needed.

[00:37:09] Byas: We also saw the convergence coming of online and offline. Okay. I knew I had to play in online in some manner. It didn’t make sense for me to go head to head with the big established people because that would require, deep pockets and a long lead time to, build that. But there were niches and ways that we were thinking of we could enter in and still be relevant.

[00:37:34] Byas: At least for certain segments. We had customers who were coming to us and said, Hey man, can you, do, you know both sides of this? Can we, and we were bringing to do offline, online payments in SMS pay, etc. So we were also looking to scale some of that. So that’s where I was looking to invest and I still am.

[00:37:54] Byas: So that hasn’t changed. So we were out in the market looking for that.

[00:37:59] Akshay: One question here. The EMI product would need a lending partner whom you would work with, right?

[00:38:05] Byas: To which we, yeah, so there’s different kinds of EMI. There is, obviously the credit card, debit card EMI, and that was, doing integrations with more and more banks to get more and more EMI debit card.

[00:38:17] Byas: Then there is brand EMI, which is doing in acquiring brands and integrating into their systems to offer brand EMI. Then there is NBFC EMI, which is integrating with, NBFC lenders to offer their EMI. Right? We wanted to offer all three, all of those forms we want to do.

[00:38:40] Byas: So we were out we had we got hired an investment banker to lead the round. But at about that time, Harshil came and talked to us and Harshil, the founder of Razorpay he had actually talked to us even before we had started the fundraise back in April or May of last year, had come and talked to us and we said, look, we’re not looking to be sold.

[00:39:04] Byas: We are actually going to be going raising money later this year. But, you want to chat, we are happy to chat with you. And we chatted then I didn’t hear anything from them. We continued and to go raise money. And then Harshil came back and, called me and he said, look, we’ve met with every player in the industry And we really think you, we looked at how you guys do product you do the product like we would do it, right?

[00:39:36] Byas: He said, look, the first time, we thought of going offline. We’re a product first company, and our first in inclination is to build the ourselves, right? We thought about it, but then there’s a lot of learning curve. It takes time. There’s more to it than just the product. And so we looked at partners, we found you guys have done it the way we would’ve done it, right?

[00:39:58] Byas: How is there any way we could, you know what come together? We said, look, we’re in the market to raise funds, but happy to entertain interest and let’s have a conversation. So that’s how it started. And as part of that was, it’s also, it was a process where, I needed to get to know them.

[00:40:19] Byas: And and then they weren’t the only ones who came and spoke to us. There were other people who were interested as well.

[00:40:25] Akshay: Okay. Like in acquisition or in funding?

[00:40:29] Byas: No, in acquisition. We had the conversation and going back to just my own personal journey of coming from Intel to Ezetap, some of the same metrics I was still looking for, where, who’s that?

[00:40:43] Byas: It wasn’t just a product fit, where is the cultural fit? Where is that complimentariness and one of the things we loved about what we saw with Razorpay was their vision of the market and where it was going was the same as us. Their operating philosophy was, similar to us, and their product philosophy was also very similar to us.

[00:41:07] Byas: Right. And so that gave good comfort, as we walk, went through that. .

[00:41:13] Akshay: So what is their vision of the market and how does Ezetap fit into that?

[00:41:18] Byas: Look, their vision is that, payments are effectively going to be omnichannel, right? Is that, today the notion of being able to service just the merchants one side versus another, and whether two systems don’t talk to another, isn’t going to be where the future, it’s a future is where it’s all the merchants sees everyone.

[00:41:42] Byas: And in theoretically, you could walk into a store and, the store doesn’t have the stuff, the item that you need, and you could just pay at the counter, order it from the online store, but you just pay at the counter on the store and you go home and the, from wherever the remote location is, it gets shipped to you, right?

[00:42:02] Byas: It’s it blends in the online, offline right? It provides the merchant with one single dashboard of what’s going on across the entire shop company from a sales perspective and it, but, and it wasn’t just omnichannel payments. Remember, we are all looking to do more than just payments, right?

[00:42:25] Byas: Razorpay is doing payroll for the smaller, right? They have corporate cards, they have loyalty. We had envisioned the similar structure of loyalty. We are seeing things and those things are also really omnichannel. You should gotta be able to do it offline or online, loyalty. You can have one solution for it.

[00:42:45] Byas: Online one solution for offline that doesn’t make sense. So the version of that, the convergence in payments and the adjacencies around payments within the merchant, there was a, we, I felt that, hey, we have the same vision right now. We were at different starting points and coming at it from different sides, but it was pretty complimentary in, how I saw it.

[00:43:09] Akshay: Okay. Okay.

[00:43:11] Akshay: So Razorpay acquired 80% stake. So who has the remaining 20%? Is it the founders and you and..

[00:43:19] Byas: It’s a complete, it’ll be a complete transaction. It’s just, there’s time, timing on a portion of it, but it’s really gonna. .

[00:43:27] Akshay: Okay. So yeah, like you would get shares in Razorpay now and the other founders and the investors unless someone wants to cash out.

[00:43:36] Byas: Yeah.

[00:43:37] Akshay: Okay. Okay. Got it. So what do you see your role now going forward?

[00:43:42] Byas: Look it, two things. One is, continuing to tackle the offline segment is there is a, there are differences in that business and we are the set of, people and managers who’ve come with that experience.

[00:43:54] Byas: And we need to continue to build that, together with Razorpay. That’s important. And that’s, why, we are doing this deal is to go after both markets and we need that. But I also have a role of making sure that, we integrate well, right?

[00:44:09] Byas: We execute well together. And I’ve been in. , lot of acquisitions in my time at Intel and seeing a lot of failure, right? So I’m very aware that there are things that either side can do that sort of will lend itself to success or to failure. And so part of my role is also just, shepherding that change and, making it successful because it’s in both our interests to make this tremendously successful.

[00:44:41] Akshay: At a tactical level what are those things that you can do to make an acquisition successful?

[00:44:47] Byas: I don’t know whether there’s one recipe. I’ll tell you what, things, examples of where it has failed, right? You bring a team and the teams now operate as us versus them. I’ve had, I look back even within our experience at Ezetap where we had acquired a company and for the longest time, they were referred to internally as “that team” they’re no longer there with us.

[00:45:18] Byas: Why? Because, we didn’t think of them more integrated holistically. And and I tell my team that, I said when we have meeting, I said, look, we’ve gotta now think of ourselves as Razorpay. We can’t be saying, Hey, we’re Ezetap, they’re Razorpay. No, we’re all Razorpay.

[00:45:34] Byas: We’ve got different charters and we’ve gotta go off the offline business. They’re going up the online, we’re going to go stuff together, but we’ve gotta think as one. And to me that’s super critical. And to me there is no ego on, hey, what do we call ourselves? Is it Ezetap?

[00:45:51] Byas: Is it Razorpay? No. I makes sense to me. You build one brand you have a master brand and you know what makes sense? Let’s do the right master brand. If you have subbrand under that, that’s fine. No issue, to me it’s about they just be successful. It’s not, I’m not tied into the ego of no.

[00:46:07] Byas: I, this, it is not my Ezetap is not my identity. So I want to make this business successful. You can call it Ezetap, you can call it something else. And in the past we’d even thought changing our names so I’m not wedded to it. .

[00:46:22] Akshay: Okay. Okay. Got it. Okay.

[00:46:23] Byas: The other thing, I’ve seen that leads to failure is when you try to over-engineer, I remember when, we, we’d acquired.

[00:46:31] Byas: Company at Intel and that, they’d have a hundred people coming down on the company. Somebody saying, okay, now all your systems have to change to X. Your, this has to change, that, this has to change that. And the management team was so overwhelmed, they let you know they were looking at the business.

[00:46:48] Byas: They were so consumed by the integration and the lost sight of the business. So that’s one of those things I’m gonna be looking out for and saying, Hey guys, if this is pushing too much in terms of, distracting to the business, then let’s find the right. A better timing for that.

[00:47:05] Akshay: Do you see yourself in this role in the long haul? Or would you like to start up again?

[00:47:15] Byas: I don’t think, I don’t think I wanna do a start early startup again. I’m just at a point in my career where, I’d like to build on this and I see the opportunity, will I do this forever? No, absolutely not. Do I see myself doing this? And, because we’ve got to a stage, I’m very proud of the journey we have.

[00:47:36] Byas: We’ve started coming and making it bigger and better. And with this, acquisition, now we have even deeper asset pool to go after the things we want to go after and make it bigger. I’m excited about that. And after that, I want to retire. And, I work on my passions, which are, I restore cars, I build cars.

[00:47:55] Byas: Yeah. So that’s my passion. So I’d rather go spend time on that, after the next 4-5 years. So

[00:48:01] Akshay: What kind of cars do you restore?

[00:48:04] Byas: So I restore vintage cars. I actually do all the work myself. I build engines. I build, I do body work, I do suspension, electricals. I have a full fledged garage.

[00:48:19] Byas: When I was in the US actually, this isn’t the US thing, although in the US it was much easier. I would go to a junkyard, buy a junk car, bring it home, tow it home, and then, rebuild it. But even as a kid growing up in Bangalore, I would do such stuff. I worked in a garage here locally on Infantry road, I used to build stuff at home, look after them, tear down our car or motorcycle, whatever, rebuild it.

[00:48:45] Byas: I love doing that stuff. In the neighborhood I live in, they call me mechanic wala because, neighbors when they’re walking by, they’ll see me under the lying, under the car, working on it, etc. The local staff there, just call me a mechanic wala.

[00:49:00] Akshay: Amazing. Amazing.

[00:49:01] Akshay: Working with hands must be able to give you that complete time off. And, the downtime from ,

[00:49:08] Byas: it’s, my brain is like not thinking about anything else. Why isn’t this car starting, or why is that thing not working like it should be what’s causing it, and how do I check for it?

[00:49:19] Byas: How do I fix it? How do I get that part? What is that part that I need? I’m looking at all of those. And for me it’s just complete, relaxation. So it’s a form of meditation, but I’m, it’s not meditation, but for me, it’s my brain. It’s completely switched off of work. So I love that.

[00:49:36] Akshay: Amazing. Amazing. Cool.

[00:49:38] Byas: I’ll end with look this, some tidbits over journey, we are now ramped to where we are processing 10 billion annualized GMV.

[00:49:49] Byas: We are used at 500,000 touchpoints across multiple countries. India, UAE, we started a journey with, simplifying the offline payment acceptance. And now we are growing into, making it an omnichannel acceptance. And we are very excited about the journey and it’s in an environment where there’s constant evolution of the types of payments, whether it’s cards, QR, UPI, SMS.

[00:50:17] Byas: There’s just so many things that are evolving, changing, and being able to handle all of that seamlessly for merchants and for consumers. I think it’s an exciting business.

Ezetap was created by some of the biggest names in the startup industry today, including Sanjay Swamy, who manages Prime Venture Partners, and Abhijit Bose, who was formerly the India Head of Whatsapp. Byas shares his experience of steering the company through turbulent times and his own learnings from the journey. Ezetap was recently acquired by Razorpay.

Know about:-

  • Winning a contract with SBI
  • Becoming device agnostic
  • Transition from CFO to CEO way of thinking
  • Tactics for a successful acquisition

Read the text version here:-

[00:00:00] Byas: Hi, I’m Byas Nambisan I’m CEO of Ezetap I was the CFO for Intel’s largest business, which was their mobile microprocessor.

[00:00:11] Byas: And we used to keep coming back home and during that time Bobby and Anuja would say, Hey, what are you doing in a big company? Come work for, come join us Bobby’s doing the start up soon And in 2014, when I had finished it, my finished the next stint at Intel, I said, maybe, I should consider doing this.

[00:00:33] Byas: I went from, I remember March, 2014, I was thinking, Hey, what should I do next? At that point, I’m still thinking I’m a lifelong Intel person. I’d already been there 20 years, and then Bobby called me. So I spoke to Bobby and he, Bobby said, look, if you’re interested in start ups, come here.

[00:00:51] Byas: This is the hotbed. You can, I’ll obviously show you my startup, but I’ll introduce you to flipkart. I know all the people here, you can talk to all of them. So I went back to my room and I told my wife, Irene, I said hey, Bobby said I should travel there and check it out. Maybe in a couple of months I’ll go and by the way, my wife, who’s not Indian, when, during the four years here, she loved India.

[00:01:18] Byas: She didn’t want to leave. By the time I came back to the room, she said, you know what? I booked you for a flight for this Thursday, your flight to meet Bobby. So that’s how I ended up in Bangalore. I met with Sanjay Swamy, who’s one of the founders Bobby and Bhaktha and I liked what I saw and I knew nothing about payments.

[00:01:41] Byas: And

[00:01:42] Akshay: One quick question here.

[00:01:44] Akshay: Bobby is Abhijit Bose, right?

[00:01:48] Byas: That’s right.

[00:01:48] Akshay: Okay. Who’s currently heading WhatsApp in India.

[00:01:51] Byas: He’s currently heading WhatsApp in India.. Correct.

[00:01:53] Akshay: Okay. Okay. Okay.

[00:01:55] Byas: And I met with the team. One of the things I was concerned about it was that, Typically a lot of the startups are, started up by people earlier on in the career, young.

[00:02:09] Byas: I had already been, working for 20 years and I was concerned about, just a cultural fit, and so this, it was reassuring to me that, this was Bobby and his co-founder Bhaktha was actually, had worked with me at Intel and Sanjay. So I found, the cultural fit was a big part of my decision making, and I found a fit there.

[00:02:34] Byas: And the environment, and that was going on in India was so dynamic that motivated me. I didn’t know all about it, but what I knew I found very exciting. The material piece didn’t matter to me. I was going from a big corporation to, a place that was, a tiny room, right?

[00:02:52] Byas: But that completely didn’t matter to me. In fact, about six months later, someone asked me, but, hey, how is this going? And my response, I wasn’t even thinking, I just blurted out. I said, I wish I had done this earlier. , that was my response, right? I was enjoying it. It was great.

[00:03:11] Byas: So that’s my story and I’m still here at Ezetap.

[00:03:16] Akshay: So one question here so yeah, Ezetap started in 2011 and you joined in 14. So from that 11 to 14 period just gimme like a history of it. What would be original idea with which, yes.

[00:03:28] Byas: So the original idea was really Sanjay.

[00:03:34] Byas: Okay. Sanjay used to be in FinTech. He was CEO of mCheck. And he’s a very creative guy, always has ideas, always thinking about ideas, and he had this idea and he was working on the site. So then he happened to meet Bhaktha actually, and said, I’m trying to do this. We want to do, make payment acceptance easy with a little device that plugs into the phone.

[00:03:58] Byas: And, Sanjay explained what he was thinking and Bhaktha told him, you’re completely wrong. It won’t work. The way you are saying it. But I know how I can make it work. And so Bhaktha started working with Sanjay in experimenting with little reader. A little plug-in reader. And as at the same time, Sanjay also

[00:04:18] Akshay: This was inspired by Square in the US I guess.

[00:04:22] Byas: Pardon?

[00:04:23] Akshay: This was inspired by Square, like in the US Square had some

[00:04:26] Byas: It was inspired. Yes. It was roughly the same. Square had done it and, we were looking to do it. They were looking to do it here. And now in the same, at the same time, Sanjay with two other players, Bala and Shripati, were also setting up an angel fund called Angel Prime.

[00:04:46] Akshay: Okay.

[00:04:47] Akshay: Which today’s Prime Venture partners.

[00:04:49] Byas: Yeah. Today’s Prime Venture fund. And Bala was also seeding, some other companies. So they were looking to hire some people to run the two different ideas. They were actually interviewing Barbie for the other company. Sanjay was interviewing Bobby for the other company.

[00:05:05] Byas: And now Bobby had also been in FinTech in India. He had worked in NGP before, and NGP and Antech used to be competitors and they knew each other and they were also neighbors, right? We all lived in the same neighborhood and it struck Sanjay that Bobby would be the better, Bobby would be a good fit for Ezetap versus the other company.

[00:05:27] Byas: And he stole Bobby from Baha for this, for Ezetap. So that’s how Bobby Baktha, came together with Sanjay and Sanjay since he was gonna run Angel Prime, which is now Prime Ventures. He said he wasn’t going to be acting actively in the execution. He’d be on the board,

[00:05:47] Akshay: And Sanjay had already seen one exit, like his previous venture Zip Dial was acquired by Twitter.

[00:05:54] Byas: But at the point they had not invested in Zip Dial yet. So Ezetap was the first company that they initiated. So it’s, in a way, it’s a little bit more closer to Sanjay’s heart than even Zip Dial. Yeah.

[00:06:08] Akshay: Okay.

[00:06:09] Byas: They made . Yeah. So that how it started and they started working on the first version, which was the magnetic card reader in, this was late 11 and got the first funding investment in 12.

[00:06:24] Byas: But then in 13 what happened was the government changed the rules that in you needed to have a pin and chip. So they needed to, we needed to go back to the drawing board, redesign, rebuild everything, and rearchitect the process because the economics changed from the simple reader that was there to now needing a more complex device.

[00:06:49] Byas: And at the time, there wasn’t an inexpensive device. At the time, it was, we had estimated, or they had estimated that India really needs a device that is not more than 3000 rupees really closer to 2,500 rupees and nowhere in the world, even from China, could, you could one get such a device.

[00:07:08] Byas: So we ended up building, designing and building our own device. And it was a little, ended up being a little bit more expensive at around 3,500, but we were pricing it at, 2,500 forward pricing and thinking, okay, once we get the volumes we can scale it down, we’ll drive down the volume now.

[00:07:30] Byas: That was very instrumental. When I look back in really driving down the market, because once we had that device and we positioned it at between 2,500 to 3000 others had to compete and, bring, drive down the prices and then, then we saw the Chinese step up in volume on these impulse devices and the prices started coming down.

[00:07:54] Akshay: Okay. What did the device look like? This was like not a standalone device, right? It would connect with your mobile phone.

[00:08:00] Byas: It needed to connect with the mobile phone.

[00:08:03] Akshay: A Bluetooth connection.

[00:08:05] Byas: It was a Bluetooth connection. It had two versions. We had a Bluetooth version, so it was roughly about the yay big, two inches.

[00:08:12] Akshay: Which is like calculators. Okay.

[00:08:15] Byas: Yeah. It’s a very tiny calculator device and you could connect it to your phone either with a USB cable or with Bluetooth.

[00:08:23] Akshay: Okay. Okay.

[00:08:25] Byas: That was the early version of the device.

[00:08:27] Akshay: And you’d have an app on the phone where you would punch in the amount that you needed to.

[00:08:31] Byas: Correct. So the app on the phone, the Ezetap app was in the phone, can talks to our server. It talks to this, and by the way, this had to be a very, it was a very secure device, had to go through full certification. I’m still proud that we are one of the few companies in the world that actually had a fully certified device.

[00:08:49] Byas: I don’t think any other Indian company has even done that. That we did it ourselves. It was built and manufactured out of Bangalore. Yeah, so very proud of what we did there. Of course, later on, once the volumes started coming, the Chinese volumes, we couldn’t keep up in terms of pricing and, manufacturing costs.

[00:09:08] Byas: And eventually we went. Device agnostic. And the device was always, for us, it was a means to an end. That wasn’t the purpose. The purpose was the software platform and enabling that and, whoever, whichever device was the right fit, we could use.

[00:09:25] Akshay: What was the end? The end was to make payments frictionless.

[00:09:29] Akshay: Or make allow merchants to accept digital payments instead of cash.

[00:09:33] Byas: Yeah, it was. The thinking was when you looked at the market back then there was digital payment acceptance, but it was typically in high end retail, 90% of offline retail and point of service was non-card accepting, non-digital payment accepting. Even Amazon and flipkart, the delivery people went around with pieces of sheets of paper. Bobby and team actually helped flipkart, digitize their first few. flipkart was our first customer back then by in the delivery space. They, they would ride with the agents, through a delivery process and show that, Hey, look, you take all these papers and the agent has to come back to the warehouse and now reconcile each of these papers with the systems.

[00:10:25] Byas: That would take a lot of time if you did it digitally. You saved a lot of time and you are increasing your productivity because you can do more deliveries in the same time, because you don’t need to come back and do all of this. You reduce your errors, you reduce, you increase customer convenience, etc, right?

[00:10:43] Byas: So they had to go through all that process of fine tuning and creating that solution. . And so then that was in 2012. So when I joined Ezetap had just started, changed over to the new pin and chip card and we were, the first version of the pin and chip card was being refined.

[00:11:05] Byas: And at the same time, we had just won this large contract with SBI. SBI had a vision of, reaching out to 500,000 merchants in India with an m-plus solution. And we had won that, we had won the contract and that’s when I joined.

[00:11:25] Akshay: I was under the assumption that most of these banks have their own feet-on-street who go out and sell devices to merchants.

[00:11:31] Byas: Yeah. So that, yeah, so this is where we had where I’ll take the blame.

[00:11:36] Byas: We’ll take the blame. We, in through the, and that was our, the process we had with other bank partners like HDFC, etc, where they did the sales, we did the servicing of the device. They would actually.

[00:11:51] Akshay: So you were like a device partner for software.

[00:11:55] Byas: We were the device and software partner. They would actually do the sales. We had envision.

[00:12:02] Akshay: For a bank this would help them acquire accounts. Cause every merchant who takes their import solution needs to open a current account.

[00:12:10] Byas: Right. So when we had bid in this RFP process with Citibank, we had followed a similar logic that, they would do the selling and we would only need to do the logistics and the support.

[00:12:23] Byas: And we had priced it that way. But as we jointly found out, they actually needed us to do more selling. And we, and then the economics didn’t quite make sense for us because that was more, a lot more expensive. And we were a small company back then and, couldn’t really afford that.

[00:12:40] Byas: And so we, anyway, we weren’t able to get the volumes we were thinking at back then.

[00:12:46] Akshay: Had it raised funds when you joined?

[00:12:49] Byas: We had, it had already raised two rounds. We just closed the second round when I joined.

[00:12:54] Akshay: How much had it raised by then?

[00:12:56] Byas: It had raised so that’s a good question.

[00:12:59] Byas: I wanna say it had raised three plus it had raised about 15, 10-15 million dollars total between the two rounds. Okay.

[00:13:09] Akshay: Which is pretty substantial for that time.

[00:13:12] Byas: Yeah. It was substantial for that time. And it was. And and then subsequent to that about a year and a half after I joined, we had raised another 26 million.

[00:13:24] Byas: Which was a, another, big race in 2015.

[00:13:29] Akshay: And so what was the the plan here? Was it to do like how Pine Labs does where they go and they have feet on street and they acquire merchants and allow them to accept digital payments? Or was it to

[00:13:43] Byas: It was a variant of that.

[00:13:44] Byas: The, our model was we wanted to work with the bank and really be the service partner for the bank. Okay. There were two areas we were trying to address. One was we saw a large tier of merchants who we thought would be best serviced by the banks because the banks have immense reach and we could be their technology platform and allow them to reach this at a very affordable cost.

[00:14:11] Byas: So we were focused on driving down the cost on the device and the service with the deployment being by the bank. The other area that we were focusing on was we felt there were there were enterprises that were not using digital and digital payment acceptance. And we wanted to provide a platform that could easily integrate into the enterprise ERP systems and enable them to offer digital payment acceptance at their delivery service agents.

[00:14:43] Byas: So for players like Amazon and, flipkart, etc, wherever you have an agent on the field, being able to accept payment on the field, but also having that payment completely integrated into, backend, so for example, one of the early customers who really take advantage of this was Airtel stores.

[00:15:05] Byas: were none of those. You walk in and you do did a payment transaction end of the day, all of those paper slips had to be manually reconciled. There was an entire department in the finance team in Airtel whose job was to call every store and say, please reconcile and hit the reconcile button.

[00:15:22] Byas: Otherwise our assistant, we won’t do it. Once we deployed our integrated solution where it’s automatically reconciled, every system is updated, they didn’t need all of that, right? It became so much more efficient. So we were addressing the enterprise segment with very, very complex integrations and a modular architecture that allowed us to do these complex integrations very easily.

[00:15:47] Byas: And at the same time, we were building a low cost platform for banks to deploy, right? In neither of these models will, did we actually have a large or did we have a large feet on street model, and we did experiment with it, and we found that as a very high burn model and we decided, we’re not going to go down that path.

[00:16:11] Akshay: Here, like the Airtel example you gave me this year talking of reconciliation of the card swipes. I remember there used to be a time when I would swipe a card and the merchant would keep one copy in their cash register.

[00:16:24] Byas: So you might have seen a little little metal stick that they just put the

[00:16:28] Akshay: yes

[00:16:30] Byas: on.

[00:16:30] Byas: They take it down and match everything.

[00:16:32] Byas: Yeah.

[00:16:33] Akshay: Yeah.

[00:16:33] Akshay: I had almost forgotten that they used to do that, and now they don’t. Oh,

[00:16:38] Akshay: yeah, okay.

[00:16:38] Byas: You don’t need to do all of that. So that was part of the revolutionizing, that we had achieved by driving down the cost and.

[00:16:46] Byas: And driving this digital digitization. , right? .

[00:16:49] Akshay: So you’re essentially for a large retail client, you would be like payments plus workflows. Not only would you do payments, but the workflows after that, you would auto get that as well.

[00:16:59] Byas: Absolutely.

[00:17:00] Akshay: And what was the economics of it like?

[00:17:03] Akshay: Typically, I believe there’s a 1.5 to 2%.

[00:17:05] Byas: If you were, yes. If you were. So if you are, there are two, again, there are two different models. One is you are the acquirer yourself. Okay. You are an aggregator, so you go out and acquire the merchant. The merchant then would be an Ezetap merchant and Ezetap would have a bank behind it.

[00:17:28] Byas: So in that case, when a merchant gets paid a hundred rupees, Ezetap could sell the merchant. We are offering you the service for, 1.5% fee. Okay? Ezetap will get to keep that 1.5%, but out of that 1.5% it has to also pay the issuing card. So the customer’s card company has to be paid, MasterCard has to be paid, visa has to be paid, etc.

[00:17:56] Byas: That isn’t a very, there isn’t a lot of margin. There isn’t actually, in some, most cases there is no margin. India was already very competitive, right? Because I don’t know if you are aware, but a, most cards today are platinum cards. The interchange on Platinum card is 1.8%, which means the acquirer has to pay the issuer 1.8% no matter what.

[00:18:22] Byas: So the, even if the acquirer is only charging the merchant 1% or 1.5%, They have to eat the delta. Okay? And now big acquirers like HDFC and others can do it because they also get float business. And a lot of the cards are already their cards. So they’re on both sides and they can, they don’t have the same cost, right?

[00:18:49] Byas: So that’s a very expensive proposition and we believe that. This is one of the things they told me when I joined as Bobby, I remember Bobby telling me, he says, look, we believe MDR is under pressure in markets like India. That isn’t going to be our primary focus. We are gonna focus on software as a service and just being charging a subscription fee to our banks, you pay us, a hundred rupees per month, per terminal, 120-150 rupees.

[00:19:20] Byas: And then if you wanted more integrated solutions, we would charge you, right? Customers were you taking more complex solutions would get charged a bit more. And the others was a monthly, subscription fee.

[00:19:33] Akshay: Yeah. For customers taking a more complex solution, it was per terminal pricing only, or a different?

[00:19:38] Byas: It was mostly still a per terminal per month fee.

[00:19:42] Byas: There was some exceptions where they said, Hey, we’re doing it in large volume, give us a platform fee, etc. But in general, it was a terminal per month fee.

[00:19:52] Akshay: Okay. Okay. Okay. Got it. And in addition to this you would still charge them the one-time cost of the terminal and that you became device agnostic.

[00:20:01] Byas: We became device agnostic. And in fact the terminal was often provided by the bank. The bank would buy the terminal. Initially, they were buying the terminal from us. And then giving it to the merchant. And they may sell it to the merchant. They may give it for free to the merchant. It just depends on their relationship with the merchant.

[00:20:20] Byas: And perhaps if you did so much transactions or you maintain so much balance, they will give it to you for free. Otherwise they’ll charge you something. But they were buying it from us. And today they don’t even buy it from us, they just buy it. We tell them, Hey, you just get whatever terminals you want.

[00:20:35] Byas: We’ll provision it on our system.

[00:20:37] Akshay: Okay. Okay. Okay. So like for Airtel they were just paying you for the software that was connecting the terminal to their ERP. The terminal itself was provided by their bank to them, or they bought it directly.

[00:20:51] Byas: Actually in that specific case with the Airtel, they bought it from us.

[00:20:56] Akshay: Okay. Okay.

[00:20:58] Byas: Yeah, we actually did more for them. We actually developed the app. So the app that was running on the agent’s terminal in the Airtel store was also developed by us. We had lengthier deeper work that we did with Airtel. They were, little different. But typically the merchant the enterprise would often get the terminals from their bank of choice, and we would deploy the software.

[00:21:23] Byas: We would, solution the additional linkages that were needed. And and then we would get paid typically by the bank or in some cases directly by the budget.

[00:21:34] Akshay: Okay. Okay. Okay. So this was a fairly good call of not rely on the MDRs because, we all know what happened to MDRs in India.

[00:21:43] Byas: Yeah. MDRs just collapsed, right? It. And we saw that coming there is, and and I think we, that insulated us even when, for example, when Covid hit and transactions stopped, our services didn’t stop. Our service fee didn’t stop. We obviously reduced some rates and we cut some deals, but our revenue didn’t go to zero.

[00:22:06] Byas: It dropped by 20% but it didn’t completely disappear. So that was the trade off we made in going down that path. And where we see opportunity to participate in the bips is when there are additional value added services like EMI, etc, being offered to the merchant or credit BNPL type credit.

[00:22:32] Byas: Then we can get. If a credit conversion happens, we could get a fee for that etc. So that’s an opportunity. We believe we’re still out there and we’re working on it. The transaction is the payment itself we believe is largely a commodity.

[00:22:49] Akshay: Got it. You date the 25 million fundraise in 2017. Why did you need to raise such a big round? Because you were not in a cash burn.

[00:22:57] Akshay: Your business model was not cash burn, right? There was no cash backs and you didn’t need to spend on feet on street and all.

[00:23:04] Byas: No, it was, yeah, you’re right. The reason we did that was. We were, we had just won that SBI deal and okay. And we were building devices, which at that point we were still losing money on the device because we, it was costing us 3,300, we were pricing it at 2,500.

[00:23:26] Byas: Which we felt once the volumes come down, we could make there. But for the next couple of, next year or so, we would need to sync some money. And then as we were trying to ramp our business, we also wanted to experiment to see if we could help SBI speed up the process by also deploying our own salespeople at the same time.

[00:23:46] Byas: So the device portion of it did suck up money in that interim. That was where our burn was. Even though we weren’t, we didn’t have significant burn on the acquisition side. We were having device side burn. . .

[00:23:59] Akshay: Okay. Okay. Got it. Got it. Okay. You went through that period where the original founders left and you transitioned from a CFO role to a CEO role.

[00:24:09] Akshay: Tell me about that period. Wa was it like a very high stress period for you and just tell me the story also what happened?

[00:24:15] Byas: So yeah. So we had been doing this was in 2018. We had I remember we had, I had just come back from a board meeting from the US and Bobby was still in the US at that point.

[00:24:32] Byas: And he was gonna come a few days later. When I landed at the airport, there was a WhatsApp message from him saying Hey man, when you get, when you land, give me a call. And I said, that was unusual. But anyway, I landed at whatever, two in the morning I was on, in the taxi, nothing to do.

[00:24:50] Byas: So I said, okay, hey, Bobby, you awake and it’s daytime in the US. And he called me and I had no inkling, I had absolutely no inkling, right? I was just completely surprised. He said, Hey, look, I’ve been doing this for a while, and, and I’ve been this opportunity has come, from WhatsApp.

[00:25:16] Byas: And, that seems like a really an opportunity to really make a big dent in India. And it’s something that I’m really, excited about. And I’ve told the board this, I was, my jaw was on the ground. Because I just, I hadn’t, it wasn’t that there was any flags saying, Hey, something like this might be coming.

[00:25:43] Byas: And I think it was. And then I thought about it and I said, okay, I was playing an active role in running the company. I could continue to do that. And then, in whatever capacity. So Sanjay came and talked to me and he said, Hey, this is happening, would you be willing to do the acting CEO role?

[00:26:03] Byas: We’re going to initiate a formal search. So I said, absolutely. And I hadn’t thought, I hadn’t come into this envisioning wanting to be CEO or it just so happened, right? And I just said, okay. I didn’t feel like I could walk away because if both of us walked away, then you know, the company would be really hit.

[00:26:24] Byas: We had split the job between us quite well, so either of us could have covered for the other but if both of us left, that would be a, that would be a big hole. It, and this was November, 2018. And, I took over as acting CEO and one of the decisions I’d made, and it was coming to that, wasn’t it just so happened that I was at the helm and actually pulled the trigger on it.

[00:26:49] Byas: Was that we would get out of our device business because that’s where our burn was. And as I was looking at, how we move forward, there were devices that were available at lower cost when, from other suppliers, didn’t make sense for us to keep burning devices. And it’s not just the cost of manufacturing the device.

[00:27:09] Byas: We actually had to have a hardware team that, engineered the device, certified the device kept up with every change. Every change requires a new certification. Okay? So very expensive, very complex process, very expensive. And we did really didn’t have the scale, you needed a scale of millions of units and nobody in India had a scale of millions of units to justify a device, which is why you don’t see any unique India only devices, because India doesn’t justify the volume.

[00:27:37] Byas: You need 5-10 millions of devices to justify that kind of scale. We had got out of that. But one of the, then the consequence of me making that decision to get out of the hardware business was that Bhaktha who was there as the hardware partner. There wasn’t the role that he was looking to play wasn’t, was, had gone away.

[00:27:58] Byas: So then Bhaktha said, Hey, look man, we are shrinking in our, we are now going to do, instead of designing new products, we’re just going to continue supporting the existing devices. That’s going to trickle down over time. Doesn’t make sense for me to stay on. I’m thinking of some new ideas and stuff.

[00:28:14] Byas: And, which was a consequence of the decision. But the decision was, economically it made sense. It, there was a lot of emotional attachment. I’m also a product guy, from the first day I was here, I would sit with Bhaktha and, with the product team trying to, Hey, why don’t we do this, do that, create.

[00:28:32] Byas: And it was something that was very dear to me, but, if I looked at it dispassionately, it just didn’t make sense to do it. And and I’m glad we made the call. It was the was the right call, was a tough call, but once we made that call, then it didn’t make, Bhaktha’s leaving then was made sense, or at least was a fall out of that.

[00:28:53] Byas: And then, so three months later, which is February of of 2019, the board came back and said they had done an extensive search. They had interviewed, they had interviewed me, they interviewed few other players and they felt that I was running the company well and would, ask me and, hired me to stay on.

[00:29:13] Akshay: When you made that transition from CFO to CEO your way of thinking, decision making, all of that must have also needed to evolve. Tell me about how your decision-making models evolved from the CFO lens to the CEO lens? .

[00:29:29] Byas: Yeah, it did. As much as I’d like to have thought no, I know.

[00:29:32] Byas: I was already thinking like this. No, it did. As a CFO, I took a very economics first look at the business and sometimes when you do that, you miss out the strategic aspects or you undervalue those or you get all, so overweight the economic factors versus the other factors.

[00:29:59] Byas: And that was okay for me to do because I knew Bobby would cover that, those factors. I would play the financial perspective card. He would play the business card. And then between the two, we’d get to the right decision, right? But when, once when I switched over, suddenly I had to do that.

[00:30:17] Byas: And I had to, I was coming from, this other space and I had to turn, transition over. And now there are employees, my team members will say they did see the difference, right? There were things that would’ve previously come and talked to me and said, Hey, should we do this?

[00:30:33] Byas: And I say this just makes no sense, right? Know, tell me how you make the money. And, I’d shoot it down and then he up the go. Then we’d have to more rounds. Now I’m like, yeah, but let’s try this. Even if it doesn’t make, economic sense up front let’s examine, all the other possible angles.

[00:30:51] Byas: And then make a decision. I had switched there, there was some decisions. I looked back and I said I was perhaps, maybe I did the, I took the wrong decisions. And then looking back in hindsight where, I said, Hey, look, this, that’s as low as we can go.

[00:31:08] Byas: I shouldn’t go any lower. Let’s cut our loss here. But in the process, I opened the door for somebody else to come in, into a customer where, into a, into a partner where I shouldn’t have, let that person come back in, someone else in cost us more to go back and get share, etc.

[00:31:26] Byas: So there obviously was earnings there. And so it is a switch that is required.

[00:31:32] Akshay: Yeah. So basically your appetite for risk increased, like you started taking more risks.

[00:31:37] Byas: I had to take more risk, so you have to have that ability to be willing to take risk. It’s not take, completely unjudged risk, but certainly your risk appetite has to go up.

[00:31:48] Byas: And for me, and I was in a transition where I was still CFO and then had taken on CEO , so I didn’t have that counterbalancing role. I viewed, Bobby and me, Yin and Yang and, I could go hard and he’d go, I know where he, I know where his mindset was. I could, be the counter foyer for that and, vice versa.

[00:32:06] Byas: And suddenly, when you had both roles in one it caused me to really think hard about, what I needed to do differently and what I perhaps was missing or didn’t do I had to change. And yes, that was a big change. .

[00:32:20] Akshay: How is the business doing in terms of what kind of top line was it generating?

[00:32:24] Akshay: If you could like, just to understand the growth like 2014, you joined since then, what kind of top line has it been growing at

[00:32:33] Byas: So far back man, you gonna ask me to like the numbers?

[00:32:37] Akshay: Not very broad. Try to remember, whichever you can.

[00:32:39] Byas: Yeah. When we were joined, we were sub I think at one, I remember the time we were trying to cross one crore in revenue.

[00:32:48] Akshay: Monthly? Annuall? What?

[00:32:49] Byas: In one we were trying to go across at the 0.1 crore of AR, of MR, monthly recurring. Monthly recurring revenue, right? . And so that would be, 12 crores monthly recurring. So let’s, at that point, let’s call it roughly 2 million, it might, if you was way less than that, and the goal was to get past that.

[00:33:11] Byas: So then on our, then with our SBI contract and HDFC and partnership, we were growing. Then, when I made the, the SBI, like I said, the economics didn’t quite work out, not blaming them. We had misjudged it when we did the the RFP of what the economics would be.

[00:33:32] Byas: We came a point we had to pull out of the partnership and we say, look, we can’t sustain this because we’re losing money on every deal. We’re not making money. So I had to pull out of that. And that took a hit onto our revenue, flattened our revenue, right? And and but then coming into 2018, into 19 we saw nice revenue growth 19 into 2021, 20-21.

[00:33:58] Byas: We were growing 50 to…

[00:34:00] Akshay: When you stop selling your hardware that would’ve also cost the

[00:34:04] Akshay: revenue to come.

[00:34:05] Byas: It also hit our revenue. Even though it didn’t hit our bottom line, it improved our bottom line, but it hit our revenue. So the revenue was, flattened because our device revenue just went away.

[00:34:17] Byas: And even though our subscription revenue was growing, it was being offset by the decrease in the device revenue. And and internally for management purposes, we really were only focusing on subscription revenue. We knew device was for us to a sort of a means to an end. And we knew that wasn’t the end goal because a device business margins are very low.

[00:34:39] Byas: You’re not going to get valuation of the device business, etc. It’s the subscription business. That’s the valuable piece, and that’s the one we focused.

[00:34:48] Akshay: Okay. Okay. So what did you close last year at revenue wise? And this would be like now a hundred percent subscription revenue, right?

[00:34:55] Byas: It was it’s almost, we do have some legacy customers who still have some device business there, right?

[00:35:02] Byas: And we were, but between if I look at just the subscription revenue last year we did over 10 million in AR on, on that. And that was a 50%, 60% growth over the prior year. Okay.

[00:35:22] Akshay: And this is not MDR shared. This is the part device.

[00:35:26] Byas: This is net revenue, right? This is not the inflated by MDR, etc..

[00:35:30] Byas: It’s just, pure subscription revenue. If you look at our total revenue last year we were closer to 14, 13 and a half to 14 million.

[00:35:41] Akshay: Okay tell me about razorpay the acquisition, which just happened what led up to it.

[00:35:46] Byas: So look what led up to it is we had, so I took over 2018, early 19 start we started changing some of our tactics and strategies.

[00:35:59] Byas: We be, started expanding on the bank front. We were doing well. We had done a last the last round we had done was in 2017. We had relatively low burn. We were, still living off of that. And I had gone back to the board and I said, look, if we hit these metrics then I will be, very optimistic of future growth and I want to go invest in that.

[00:36:22] Byas: And when we get to that, I’m gonna raise money. Yeah. I had set the expectation way back when I said second half of 2021, we’re gonna go out in the market to raise money for 2022.

[00:36:35] Akshay: But why did you need to raise money? Was it for spending on customer acquisition? Or on..

[00:36:40] Byas: It was discussed. So the, it was on spending on customer acquisitions.

[00:36:44] Byas: So the place that we wanted to go after, remember I told you we do SaaS, but we were missing out on a source of revenue, which is going after EMI. Okay. And this is where Pine had established a good franchise. And it’s worth tapping into. We needed to go into do that. But to do that, we had to both build the systems, get the people, there was investment needed.

[00:37:09] Byas: We also saw the convergence coming of online and offline. Okay. I knew I had to play in online in some manner. It didn’t make sense for me to go head to head with the big established people because that would require, deep pockets and a long lead time to, build that. But there were niches and ways that we were thinking of we could enter in and still be relevant.

[00:37:34] Byas: At least for certain segments. We had customers who were coming to us and said, Hey man, can you, do, you know both sides of this? Can we, and we were bringing to do offline, online payments in SMS pay, etc. So we were also looking to scale some of that. So that’s where I was looking to invest and I still am.

[00:37:54] Byas: So that hasn’t changed. So we were out in the market looking for that.

[00:37:59] Akshay: One question here. The EMI product would need a lending partner whom you would work with, right?

[00:38:05] Byas: To which we, yeah, so there’s different kinds of EMI. There is, obviously the credit card, debit card EMI, and that was, doing integrations with more and more banks to get more and more EMI debit card.

[00:38:17] Byas: Then there is brand EMI, which is doing in acquiring brands and integrating into their systems to offer brand EMI. Then there is NBFC EMI, which is integrating with, NBFC lenders to offer their EMI. Right? We wanted to offer all three, all of those forms we want to do.

[00:38:40] Byas: So we were out we had we got hired an investment banker to lead the round. But at about that time, Harshil came and talked to us and Harshil, the founder of Razorpay he had actually talked to us even before we had started the fundraise back in April or May of last year, had come and talked to us and we said, look, we’re not looking to be sold.

[00:39:04] Byas: We are actually going to be going raising money later this year. But, you want to chat, we are happy to chat with you. And we chatted then I didn’t hear anything from them. We continued and to go raise money. And then Harshil came back and, called me and he said, look, we’ve met with every player in the industry And we really think you, we looked at how you guys do product you do the product like we would do it, right?

[00:39:36] Byas: He said, look, the first time, we thought of going offline. We’re a product first company, and our first in inclination is to build the ourselves, right? We thought about it, but then there’s a lot of learning curve. It takes time. There’s more to it than just the product. And so we looked at partners, we found you guys have done it the way we would’ve done it, right?

[00:39:58] Byas: How is there any way we could, you know what come together? We said, look, we’re in the market to raise funds, but happy to entertain interest and let’s have a conversation. So that’s how it started. And as part of that was, it’s also, it was a process where, I needed to get to know them.

[00:40:19] Byas: And and then they weren’t the only ones who came and spoke to us. There were other people who were interested as well.

[00:40:25] Akshay: Okay. Like in acquisition or in funding?

[00:40:29] Byas: No, in acquisition. We had the conversation and going back to just my own personal journey of coming from Intel to Ezetap, some of the same metrics I was still looking for, where, who’s that?

[00:40:43] Byas: It wasn’t just a product fit, where is the cultural fit? Where is that complimentariness and one of the things we loved about what we saw with Razorpay was their vision of the market and where it was going was the same as us. Their operating philosophy was, similar to us, and their product philosophy was also very similar to us.

[00:41:07] Byas: Right. And so that gave good comfort, as we walk, went through that. .

[00:41:13] Akshay: So what is their vision of the market and how does Ezetap fit into that?

[00:41:18] Byas: Look, their vision is that, payments are effectively going to be omnichannel, right? Is that, today the notion of being able to service just the merchants one side versus another, and whether two systems don’t talk to another, isn’t going to be where the future, it’s a future is where it’s all the merchants sees everyone.

[00:41:42] Byas: And in theoretically, you could walk into a store and, the store doesn’t have the stuff, the item that you need, and you could just pay at the counter, order it from the online store, but you just pay at the counter on the store and you go home and the, from wherever the remote location is, it gets shipped to you, right?

[00:42:02] Byas: It’s it blends in the online, offline right? It provides the merchant with one single dashboard of what’s going on across the entire shop company from a sales perspective and it, but, and it wasn’t just omnichannel payments. Remember, we are all looking to do more than just payments, right?

[00:42:25] Byas: Razorpay is doing payroll for the smaller, right? They have corporate cards, they have loyalty. We had envisioned the similar structure of loyalty. We are seeing things and those things are also really omnichannel. You should gotta be able to do it offline or online, loyalty. You can have one solution for it.

[00:42:45] Byas: Online one solution for offline that doesn’t make sense. So the version of that, the convergence in payments and the adjacencies around payments within the merchant, there was a, we, I felt that, hey, we have the same vision right now. We were at different starting points and coming at it from different sides, but it was pretty complimentary in, how I saw it.

[00:43:09] Akshay: Okay. Okay.

[00:43:11] Akshay: So Razorpay acquired 80% stake. So who has the remaining 20%? Is it the founders and you and..

[00:43:19] Byas: It’s a complete, it’ll be a complete transaction. It’s just, there’s time, timing on a portion of it, but it’s really gonna. .

[00:43:27] Akshay: Okay. So yeah, like you would get shares in Razorpay now and the other founders and the investors unless someone wants to cash out.

[00:43:36] Byas: Yeah.

[00:43:37] Akshay: Okay. Okay. Got it. So what do you see your role now going forward?

[00:43:42] Byas: Look it, two things. One is, continuing to tackle the offline segment is there is a, there are differences in that business and we are the set of, people and managers who’ve come with that experience.

[00:43:54] Byas: And we need to continue to build that, together with Razorpay. That’s important. And that’s, why, we are doing this deal is to go after both markets and we need that. But I also have a role of making sure that, we integrate well, right?

[00:44:09] Byas: We execute well together. And I’ve been in. , lot of acquisitions in my time at Intel and seeing a lot of failure, right? So I’m very aware that there are things that either side can do that sort of will lend itself to success or to failure. And so part of my role is also just, shepherding that change and, making it successful because it’s in both our interests to make this tremendously successful.

[00:44:41] Akshay: At a tactical level what are those things that you can do to make an acquisition successful?

[00:44:47] Byas: I don’t know whether there’s one recipe. I’ll tell you what, things, examples of where it has failed, right? You bring a team and the teams now operate as us versus them. I’ve had, I look back even within our experience at Ezetap where we had acquired a company and for the longest time, they were referred to internally as “that team” they’re no longer there with us.

[00:45:18] Byas: Why? Because, we didn’t think of them more integrated holistically. And and I tell my team that, I said when we have meeting, I said, look, we’ve gotta now think of ourselves as Razorpay. We can’t be saying, Hey, we’re Ezetap, they’re Razorpay. No, we’re all Razorpay.

[00:45:34] Byas: We’ve got different charters and we’ve gotta go off the offline business. They’re going up the online, we’re going to go stuff together, but we’ve gotta think as one. And to me that’s super critical. And to me there is no ego on, hey, what do we call ourselves? Is it Ezetap?

[00:45:51] Byas: Is it Razorpay? No. I makes sense to me. You build one brand you have a master brand and you know what makes sense? Let’s do the right master brand. If you have subbrand under that, that’s fine. No issue, to me it’s about they just be successful. It’s not, I’m not tied into the ego of no.

[00:46:07] Byas: I, this, it is not my Ezetap is not my identity. So I want to make this business successful. You can call it Ezetap, you can call it something else. And in the past we’d even thought changing our names so I’m not wedded to it. .

[00:46:22] Akshay: Okay. Okay. Got it. Okay.

[00:46:23] Byas: The other thing, I’ve seen that leads to failure is when you try to over-engineer, I remember when, we, we’d acquired.

[00:46:31] Byas: Company at Intel and that, they’d have a hundred people coming down on the company. Somebody saying, okay, now all your systems have to change to X. Your, this has to change, that, this has to change that. And the management team was so overwhelmed, they let you know they were looking at the business.

[00:46:48] Byas: They were so consumed by the integration and the lost sight of the business. So that’s one of those things I’m gonna be looking out for and saying, Hey guys, if this is pushing too much in terms of, distracting to the business, then let’s find the right. A better timing for that.

[00:47:05] Akshay: Do you see yourself in this role in the long haul? Or would you like to start up again?

[00:47:15] Byas: I don’t think, I don’t think I wanna do a start early startup again. I’m just at a point in my career where, I’d like to build on this and I see the opportunity, will I do this forever? No, absolutely not. Do I see myself doing this? And, because we’ve got to a stage, I’m very proud of the journey we have.

[00:47:36] Byas: We’ve started coming and making it bigger and better. And with this, acquisition, now we have even deeper asset pool to go after the things we want to go after and make it bigger. I’m excited about that. And after that, I want to retire. And, I work on my passions, which are, I restore cars, I build cars.

[00:47:55] Byas: Yeah. So that’s my passion. So I’d rather go spend time on that, after the next 4-5 years. So

[00:48:01] Akshay: What kind of cars do you restore?

[00:48:04] Byas: So I restore vintage cars. I actually do all the work myself. I build engines. I build, I do body work, I do suspension, electricals. I have a full fledged garage.

[00:48:19] Byas: When I was in the US actually, this isn’t the US thing, although in the US it was much easier. I would go to a junkyard, buy a junk car, bring it home, tow it home, and then, rebuild it. But even as a kid growing up in Bangalore, I would do such stuff. I worked in a garage here locally on Infantry road, I used to build stuff at home, look after them, tear down our car or motorcycle, whatever, rebuild it.

[00:48:45] Byas: I love doing that stuff. In the neighborhood I live in, they call me mechanic wala because, neighbors when they’re walking by, they’ll see me under the lying, under the car, working on it, etc. The local staff there, just call me a mechanic wala.

[00:49:00] Akshay: Amazing. Amazing.

[00:49:01] Akshay: Working with hands must be able to give you that complete time off. And, the downtime from ,

[00:49:08] Byas: it’s, my brain is like not thinking about anything else. Why isn’t this car starting, or why is that thing not working like it should be what’s causing it, and how do I check for it?

[00:49:19] Byas: How do I fix it? How do I get that part? What is that part that I need? I’m looking at all of those. And for me it’s just complete, relaxation. So it’s a form of meditation, but I’m, it’s not meditation, but for me, it’s my brain. It’s completely switched off of work. So I love that.

[00:49:36] Akshay: Amazing. Amazing. Cool.

[00:49:38] Byas: I’ll end with look this, some tidbits over journey, we are now ramped to where we are processing 10 billion annualized GMV.

[00:49:49] Byas: We are used at 500,000 touchpoints across multiple countries. India, UAE, we started a journey with, simplifying the offline payment acceptance. And now we are growing into, making it an omnichannel acceptance. And we are very excited about the journey and it’s in an environment where there’s constant evolution of the types of payments, whether it’s cards, QR, UPI, SMS.

[00:50:17] Byas: There’s just so many things that are evolving, changing, and being able to handle all of that seamlessly for merchants and for consumers. I think it’s an exciting business.

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Byas Nambisan Co-founder and CEO, Ezetap

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