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Ep 30: Leading Legal in Complex Regulatory Environments: Hardeep Singh, GC, CRED
93 Plays10 months ago
How is tech changing India’s financial services industry? How do you deal with complex regulations that change as rapidly as tech products do? And how can a multinational company expand into India’s culturally, geographically, and linguistically diverse market?
Hardeep Singh, General Counsel at CRED, has faced these challenges head-on. Starting his career in litigation, he moved on to in-house counsel for Uber in Delhi and helped pioneer solutions to improve the city’s public transit. Now he leads the legal team at CRED, a reward-based credit card payment app that integrates with India’s massive mobile payment system.
Hear Hardeep as he shares his experiences structuring M&A deals, navigating nuanced regulations, leading legal for a dynamic design-based product, and finding motivation from solving real world problems.
Read detailed summary: https://www.spotdraft.com/podcast/episode-30
Topics:
Introduction: 1:17
Launching your legal career: 1:52
Switching to corporate counsel from an appellate practice in Delhi: 5:27
Applying lessons from Uber to your legal leadership at CRED: 8:50
Explaining CRED: 12:45
Encountering a learning curve as a first-time team leader: 16:31
Considering the role of legal in an organization without titles: 22:18
Lessons learned from M&A at CRED: 27:46
Working in India’s legal landscape: 33:37
Driving communication, marketing and PR in legal: 37:15
Understanding UPI, India’s unified payment interface: 39:40
Advice to companies trying to expand into the Indian economy: 45:54
Book recommendations: 50:23
Advice to your younger self: 53:25
Connect with us:
Hardeep Singh - https://www.linkedin.com/in/hardeep-singh-863b1617/
Tyler Finn - https://www.linkedin.com/in/tylerhfinn
SpotDraft - https://www.linkedin.com/company/spotdraft
SpotDraft is a leading CLM platform that solves your end-to-end contract management issues. Visit https://www.spotdraft.com to learn more.
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Transcript
Solution-Oriented Thinking for Lawyers
00:00:00
Speaker
Never say no, right? Like you're a problem solver. So as lawyers, it's very easy for us to be any complicated problem. You can say no. For me, it was always try to go with the solution. Always think of two, three solutions before you go. So don't take the easy way out. Always go deep and find a solve.
Spotdraft: Enhancing Legal Efficiency
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Speaker
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00:00:57
Speaker
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Introduction to Hardeep Singh and CRED
00:01:17
Speaker
How is technology changing the Indian financial services landscape? How can legal support a company during hyper growth?
00:01:24
Speaker
And what should global legal leaders know about operating in India? Today we have Hardeep Singh, General Counsel of CRED, a reward-based credit card payments app. CRED is valued at more than $6 billion and has more than 12 million users across India. Hardeep, thanks so much for joining this episode of The Abstract. Thank you for having me.
Hardeep's Legal Journey and Skills
00:01:45
Speaker
I want to go back in time a little bit to start the podcast and hear about your early career. What was it like to be a young lawyer just getting started? Uh, it was, it was actually a lot of fun cause I was very clear when I was in law school that I wanted to do litigation, uh, to the extent that I'd never even sat for, uh, daisy replacements that happened with law firms coming to your, uh, to, to law schools.
00:02:12
Speaker
And in law for me happened by chance. So I was a good debater. I was always very good at co-curricular activities within law school, moot courts, et cetera. And I was always an average student, never really like, you know, top of the class or something. And just when I did my internships, litigation seemed to be the thing for me. So I was very, very clear that I want to do that.
00:02:35
Speaker
went to found a couple of nice lawyers who were kind enough to sort of have me in their office and started practicing with them. It was a great experience because like just doing the hard work and understanding how you know you're supposed to prepare your briefs and be ready to argue in court and to also brief your senior councils all of those things were
00:02:59
Speaker
an absolutely great experience. Both the laws that I worked with were very, very sharp, so they expected you to know the matters in and out. It wasn't like you could just prepare notes and hand it over to them. They would ask you deep questions, and it sort of made you want to read the brief better and do your research much better. I think just getting those basic skills of being able to research, of being able to find the answers to complicated legal questions,
00:03:23
Speaker
That was actually very, you know, a good positive impact on just feeling more confident that you could find the answer to any legal problem if you, you know, given that you have enough time to research. So I think that was a key skill to have as a lawyer, I guess. And I think that coupled with the fact that sometimes when you were in court and your, you know, sort of senior counsel is not around or you know, the managing counsel is not around and you're
00:03:48
Speaker
In India, the concept is called a Passover. So you could go to the judge and request them, can I have a Passover? Basically meaning that if I am item number two on the board, it will go to the end of the board so that my lawyer or this person that I work with who is in another courtroom can sort of do his matter and come and argue the matter here as well. Because typically one lawyer who's practicing will have on any given day a decent lawyer will have six, seven, eight, 10, 12 matters in a single day. So I think they could run around different courtrooms.
00:04:18
Speaker
So in those situations sometimes there would be some judges and this is like supreme court or you know the national consumer NCDRC which is the highest consumer sort of appellate authority and some of the judges started
00:04:29
Speaker
asking the juniors present to, why don't you argue the matter? Do you know the file? And that was another layer of complication because not just your senior can ask you a couple of questions, but on any given day, maybe a judge in the Supreme Court can ask you what you've really prepared for today. And I think that was very liberating and it gave me a lot of confidence because subsequently when I was at Uber and my other roles and when we had to engage with law enforcement and sometimes senior law enforcement officers,
00:04:59
Speaker
Just the inner confidence of knowing that this is OK, you can manage this because you argued in the Supreme Court and in front of people were very, very sharp. It just gives you the confidence that you need to really be like, OK, I will get this done and I will solve this problem and come back. So I think the problem solving, the hard work, and just knowing that you can do the legal research, all of that together was like a great first experience as a young lawyer.
Transition to In-House Role at Uber
00:05:26
Speaker
You referenced that you started your career in Delhi and a lot of that practice was appellate practice. I'm curious if most of that was corporate work, if it was corporate sort of appellate cases, and also then how you were able to make the transition from doing that work that's very courtroom focused to moving in-house and being within a business.
00:05:48
Speaker
So it wasn't, there was no corporate work, there was very little corporate work in court. A lot of it was family disputes, a lot of it was property disputes, a lot of it, there was some criminal law as well, which I really, really enjoyed. So no, it wasn't like the law that I was working with was like a very, you know, only corporate matters. And even at the time he was perhaps exactly as old as I am right now, 334, right?
00:06:15
Speaker
you don't really choose the matters that come to you. At that stage, you're just trying to do as much work as possible to expand your horizons, again, as much as possible. So I think there's a lot of variety of work, but primarily nothing to do with corporate law. But I was lucky with the transition, because when the transition happened for me from litigation, from just an arguing counsel in court to heading to Uber,
00:06:43
Speaker
I was actually supposed to do or help Uber with their litigation across the country. I was one of the lucky people who found an in-road into an in-house role where I could still do what I really enjoyed a lot and that was actually the reason why I took the jump because I was very very conflicted internally.
Impactful Experience at Uber
00:07:01
Speaker
And, I mean, when you're 23 and you're graduating, you know, going in-house is not an option. At the time, in-house roles were, I mean, the traditional in-house roles that were there in like the legacy industries were always like, you know, lawyers are paper pushers, especially in-house, you know, they're supposed to take the files and send it outside. And, you know, the external counsel of the law firm will actually do the work. So the concept of an in-house counsel becoming what it is now where, you know, in-house, where a lot of top
00:07:26
Speaker
partners want to move in-house. In-house lawyers are actually solving very, very complicated problems, working very closely with founders, CEOs, have a say in decision making and strategizing, all of those things. So that role was still developing. So as a 23-year-old, when you're graduating from law school,
00:07:42
Speaker
You're also sort of unaware of what is happening around the world. I mean, at least I was. And so in-house wasn't an option. So when the whole thing with Uber was happening, I was very like, I was like, okay, this is seems very interesting because it's a great company. I'd used the product and I really, really loved the product. I mean, Uber was sending, you know, very nice limousine service in Delhi as well at the time. I was very fascinated that, you know, sounds like a very cool concept. And then.
00:08:07
Speaker
And then somebody had referred me was a very close friend and it was a litigation specific role where the role was to work with in different high courts. So that was very interesting for me actually, that I will get a chance to learn how different high courts function, how different senior councils all over the country function because right now if you're a litigating lawyer, your only scope is Delhi. And while Delhi is a huge market in terms of litigation, just the getting out there, learning a lot more.
00:08:33
Speaker
was very, very interesting. So that is how the switch happened, and then one thing led to another, and then you start, once you're in a place, you do a bunch of different things, and I started picking up some corporate lessons and learning how a contract is drafted, actually, from scratch. So all of those things started happening.
00:08:50
Speaker
You joined Uber at a moment of real growth for the business. It was taking off in India, taking off globally as well. I'm sure you also had the ability to help the business navigate maybe some moments of controversy or crisis too. What are some of the lessons that you learned while you were at Uber that you continue to apply today at Cred in your legal leadership and day-to-day work?
00:09:20
Speaker
So Uber was, I mean, I think it was one of the best experiences I could have asked for. We had a great team. When I say team, I don't just mean the legal team. I think just the everybody on the ground was very extremely sharp people, extremely motivated.
00:09:34
Speaker
They genuinely believed that what we are doing is going to make a difference because I'm not sure how it is in the US or the Western world but in India public transport was an actual problem. At the time it was either buses which were unfortunately not very well maintained or you have to take the auto which is
Uber's Influence on Public Transport in India
00:09:53
Speaker
a great sort of workhorse.
00:09:54
Speaker
But it's not as safe and it's not as, you know, it's when it's hot, it's really hot. And in Bangalore is great weather. But Delhi, you should come to. I mean, if you've been to Delhi and, you know, other places, it's not it's not conducive to being in an auto. I've been there when it's about 90 degrees Fahrenheit and pouring rain and being in an auto is is.
00:10:12
Speaker
a slightly uncomfortable experience, even if it's very convenient. For Bangalore, it's actually brilliant because now I use an auto very regularly and I actually love it because it's nice and breezy and windy and sometimes it just lifts up your mood. But in Delhi when it's 45 degrees Celsius, I don't know what it is in Fahrenheit, but it's very, very hot.
00:10:31
Speaker
In those situations, you don't want to be in an auto. So I think they were really solving a problem. And I think a lot of the people believed that what we are doing is actually going to make our cities better. So that mission was inside every individual. And I think that coupled with really, really sharp people, very, very focused. I mean, that just was a perfect recipe for building a high growth, great company.
00:11:00
Speaker
There were a few values at Uber that I personally learned a lot from and then I of course learned a lot from my then manager and then I learned a lot from my team and these were
00:11:12
Speaker
It was like it was a crash course in just learning like every single day would be something very very interesting our team so there were a few for example the culture at Uber was you know that one value which is called meritocracy and toe stepping right so very very interesting that you know you can actually be comfortable speaking up to anybody
00:11:33
Speaker
And if you think you have a valid point to make, don't worry about stepping on Tyler's toes. Because if you have a valid point, it has to come through. And the meritorious idea wins always. That was a very, very interesting thought. And I took it too hard. There's a very funny instance at the time. I just joined. It was like a month or two into my role. And somehow, both the people who were in the legal team at the time were not in office. And there was an email chain that gets started regarding
00:12:02
Speaker
some auto rickshaw issue etc etc and there are a bunch of senior people in the team you know not just from India from all global offices marked over there and I am the only Indian lawyer who's on that thread and I just responded like you know to that thread not thinking that like okay there's a meritocracy and toe-stepping organization so if I have a good idea I should just send it through and turns out it wasn't that great an idea and my man is like
00:12:25
Speaker
You know, it's, it's a good way to calm down, learn, you know, be patient. You don't have to just like instantly, uh, you know, have an opinion and everything. Just, just learn and take it in. So that was actually the one key learning.
Becoming General Counsel at CRED
00:12:37
Speaker
That's a really good transition to talking about your experience at cred and making the transition to being general counsel for the first time. Uh, tell us a little bit first though, about cred. What, what's the business? What are you building? Cause it's, it's pretty cool.
00:12:52
Speaker
Cred is a very cool concept. The concept is that when you're a bad actor, you're penalized for it at multiple places. If you don't pay your loan back on time, you're penalized because your bureau score gets impacted, and then you're again penalized because the next loan will be at a higher rate of interest.
00:13:11
Speaker
in countries where credit score is very, very important. Like the US, you will perhaps not get a house on rent because Hari's credit score is not that good and he's not a reliable character basically. So what we're trying to solve was if bad actors get penalized, why can't we develop a system where good actors get rewarded? And that was the whole fundamental premise of the app. Now the app, what it effectively does is you can share your data with credit and
00:13:40
Speaker
What happens is we can remind you constantly when your bills are due. And it's also partly because the Indian government, the infrastructure that they developed was actually so enabling that these kind of services could be built in very easily. So for example, all your bills.
00:13:56
Speaker
all your credit cards, traffic tickets, all of those things we can highlight and we can tell you as and when they come about. And you can pay those tickets and your bills and your electricity and your internet and your credit card all on time. And if you're consistently doing it, and a lot of people actually do it, of course your credit score gets improved. So a fun fact is 50% of all credit active users have seen an improvement in their credit scores since they've been on the credit app.
00:14:26
Speaker
That actually sells very, very interestingly for users because a user is like, and especially if you're a multi-carded user, when I say you're a multiple card, it's actually very difficult to manage when your reminders or when what card is due. So you have one app that shows all of your statements, that shows when our builds are due, that can also help you pay very, very fast and just sort of solves this key headache for individuals. So I think that is the
00:14:55
Speaker
Core concept now around that we realize that these are people who also have financial needs these are people who also need personal loans these are people who also need insurance policies for their vehicles and a bunch of different things and we started partnering with key players in the ecosystem so key big banks key insurance companies and said okay we have this
00:15:16
Speaker
cool group of very good people who are actually paying their bills on time. They're actually very conscious. The credit scores are improving, all of those things. A lot of banks and insurance companies are actually very excited to partner with us. Now we have this partnership where we have become a platform for the good behaviors, the good, well-behaved people on one side.
00:15:39
Speaker
And then as and when they need a financial product, they can leverage the platform and get a great deal on either a personal loan or on an insurance or for that matter, a D2C brand. Like we're a great exploration area for D2C brands in the country because they want to sell to people who have disposable income, people who are spending on credit cards. So that concept has really taken off. And we have this internal thing called it pays to be good.
00:16:06
Speaker
That is the tagline for credit. It pays to be good. You can constantly do good behavior and it will add value to you and it will add value to your profile and just eventually lead to tangible benefits. I think we need something like this in the United States. Of course, you could set a bottom pay, but I have Google Calendar reminders for when different cards are due. Exactly. That's fantastic.
00:16:31
Speaker
This was your first role as a team leader or as the general counsel. I'm curious if the learning curve was particularly steep. I always talk about it now because I'm on the other side of it. It was, I think, more steep than I would have. If I would have known that this is going to be as steep as this, I would perhaps not have taken the role up. Or asked for a little more equity. Maybe, yes.
00:16:57
Speaker
No, but I think that way, credit is very fair. I think the idea for Kunal has always been that every single employee has to be a shareholder. So every single employee of credit is a shareholder in credit, which I think is a great way to get them to buy into the overall
Leadership Style and Company Culture
00:17:09
Speaker
concept. And I firmly believe, I think, the amount of... Because as people, we're all looking for, what is it called? Unequal outcomes? Yes. Or maybe that's the right way to say it, right? Asymmetric. Asymmetric, that's the right way. Asymmetric outcomes, right?
00:17:26
Speaker
As a salaried person, there's no real chance of an asymmetric outcome, but if you add ESOPs or shares or RSU's for that matter, I mean, I was also at Uber, which was also, I was a shareholder there as well, that actually adds a lot more, in my opinion, skin in the game. And that I think is very, very key, especially if you're working at a place where you know you're going to be doing
00:17:52
Speaker
12, 13, 14, 15, 18 hours days and working on weekends etc. I won't complain on that but just the learning curve was massive. It was initial days I remember. I was actually very anxious. I was actually unable to go to bed because there were so many things in my mind and you'd just be wondering whether I'm doing the right thing.
00:18:14
Speaker
You know, Kunal is a celebrated second-time founder in the country. He's very well-known. Massive Twitter following. Sometimes when I'm at the airport with him, people come and want to take selfies with him, and they ask me to take pictures with him, and he also doesn't like it. Sometimes people within the team want, younger people, when they join, they're at a company when they want to take a selfie with him, so it's sort of a celeb status.
00:18:39
Speaker
And when I was, I mean, because now I've been with the company for a few years, I'm sort of, you know, it's okay to just sort of have Kunal hanging around you and just this thing. But initially he was also, I was also slightly in awe of working with Kunal Shah. And I think he has a very, very good insight on people. He has a very, you know, he's a very deep thinker. So everything that you say to him,
00:19:01
Speaker
will be questioned. And he will ask you to break it down into smaller ideas or finer principles. And that is also true for legal and regulatory. So if I were to say, for example, let's not do this, he won't take it on face value. Like, OK, why can't we do this? What is this thing? Can you sort of walk me through the reasoning of your thing? And you know, you'll have to be very nuanced and you'll have to give this thing
00:19:25
Speaker
you also the great network of people, right? So he's been around for he's been around the payments game for 15 years is a great network of people. You can also, you know, make sure that what you're saying is actually validated by somebody who's also very, very ingrained in the system. So it was a lot of that, right? So it was but just the
00:19:43
Speaker
When I got the opportunity, I knew I had to take it. There was no way I could turn it down because I knew that the learning will be just the shared experience of working with him and would be brilliant. But like I said, it came along with having some sleepless nights, a lot of anxiety, a lot of imposter syndrome, wondering what you're doing is right, wondering whether I'm at the right place.
00:20:05
Speaker
Am I the right person for the job? So a lot of that. And then eventually, the more philosophical learning out of being here, I realized was that nobody else is going to tell you that you're good enough, right? Like you invariably get to that answer on your own. And I think if you're prepared, and if you are, you know,
00:20:27
Speaker
just willing to do the hard work. I think that is it. That is the answer to getting over anxiety because what it's a very I just stumbled across this one night when I was thinking about it because anxiety leads to inaction and inaction leads to anxiety. Yes. So the only way to get out of anxiety is to just start doing things. I think operationally it was just like you had to do everything. You had to how to think of a product through and through.
00:20:52
Speaker
And it just doesn't stop at regulatory thinking. Like, what is the copy going to look like? What is the customer support message going to look like? What if this breaks? What if that breaks? So just the product thinking from the day the product is conceptualized to the day it is rolled out, post-roll out, what is the approach? Are regulators reaching out to you? Is the media saying something which is not correct? And you're working with the comms team on did we go up with the wrong? Did we communicate something wrong about the product?
00:21:21
Speaker
just drafting the terms and conditions, drafting the privacy policies. So that was basically everything. You have to set up the whole structure from scratch and drafting the contracts, which is the more known part, but just working with the product teams, conceptualizing the product, thinking what the flow will look like, because that is a law, because credit is a very design-focused, it's a very good-looking app. So a lot of the decisions are taken design-backwards. So now, when it's a design-backward decision,
00:21:47
Speaker
because it needs to look like a certain man. It needs to look very, very suave and very, very affluent, right? Can you do this? Can you not do this? Can you say, you know, and then can you say this? But if you say this, which is a regulatory requirement where it looked like, you know, does it bring the kind of confidence that we're looking for or does it raise more issues? So a lot of interesting thinking, working with nice product managers, solving those problems end to end. I think that was very interesting.
00:22:14
Speaker
You're sort of getting at it already or anticipating my next question.
00:22:18
Speaker
If folks go on your LinkedIn, they're not gonna actually see general counsel or some other sort of fancy C-suite title. What they're gonna see is building cred. And I'm curious how you think about yourself supporting the business and also by putting that there, what you think you're sort of signaling to others within the organization, other stakeholders, and how they should perceive you and also perceive what legal is doing.
00:22:48
Speaker
Yeah, the I think so I think there's a actually if you've read the book and the hard thing about hard things they also exactly that it also talks about how at a younger state is always good to not have titles right because a title can act as a vanity metric right because and and it actually is a great in my opinion and I mean everybody sort of it suits each other every you know to each its own or his or her own but
00:23:16
Speaker
If you have a title, I've noticed you could have people who are focused upon, when is my next promotion coming in? When is that title going from senior vice president to vice president to director? I mean, how many vice presidents do banks have? I think there are some 300 vice presidents. There was a Twitter, this thing about how there's some X number of vice presidents at a massive MNC bank.
00:23:41
Speaker
I think the idea for me always was that you always have to try and do something which is interesting where you're learning and start being more accountable to yourself and what you're doing. So I think the two big and when I was thinking about this and it just so happened that cred made me think about it because there was no designation and I was very okay with it. It was never a question for me because I was like right now I don't need a designation. I'm the only lawyer so I can call myself
00:24:07
Speaker
If I'm meeting some key C-suite person at somewhere, I will be the general counsel. And if I have to go to meet the police, I'm the junior-most person in the team. I don't know what is happening. I will come back to you tomorrow with an answer. So it gives you the flexibility to change the narrative, depending on who you're meeting.
00:24:30
Speaker
And eventually, it is an outward facing thing, right? And in my this thing, everything that is an outward facing concept is sort of like, it's sort of, you know, just to make yourself feel good that I am the general counsel or I am so and so or maybe for that matter, I make this much money. That is also a sort of metric people tell themselves because that's the most objective way of comparing myself to to a person. So I think for me, the whole thing became about, OK, if I let go of this crutch,
00:25:00
Speaker
So to say, can I stand on just my own two feet and be like, I don't care what my title is. I don't want to put it on LinkedIn. Let's see if I can do something and be honest to my work so that tomorrow when.
00:25:13
Speaker
you know, when when when somebody wants to reach out to me or when somebody thinks they're looking for sharp people to work with or somebody is looking to call, you know, on somebody you're looking to call somebody on the abstract podcast that you can think of. He looks like a smart guy and perhaps want to speak to him. So I think that became a challenge and it became very, very liberating because now there's I mean,
00:25:36
Speaker
It's just you have to do your own thing and you have to tell yourself what you're doing and you have to hold yourself accountable to the work that you're doing and just try to improve that every day as opposed to hoping and thinking about other things that is my title changing or something like that. So I think that is very interesting. I also think for a company and going back to the hard thing about hard things, what Ben Horowitz says, it also is a great marker for the kind of people you're bringing through the door, right?
00:26:04
Speaker
Is Hardeep more worried about his title? And especially when you're hiring a startup, when you're hiring the first 20 people in the company, do you want to hire people who are coming in
00:26:16
Speaker
thinking about what it's going to look to the outer world. Like, you know, I am joining this cool startup. It should have this title because it will look good on my LinkedIn. Or are you bringing in people who are like, I don't care about all that. I want to come and solve a great problem. I love the concept. I'm here to go down to the bunkers with you and sort of kill it. So I think it's a great, great way to filter people. And one key learning that I think I missed to mention from Uber was on hiring. Uber had this thing called A's, higher A's and B's, higher C's.
00:26:47
Speaker
And if you hire a B, one, you are not an A, because A's always hire As, so you're clearly a B because you've hired a B, but the problem is B's can also hire C, so that is a downward slope that you don't want to be on, especially if you're putting together a fast space, like a fast company. So that is something that I just have, that is the philosophy for me. Come in, don't worry about titles, make sure you're doing good work, always try to
00:27:16
Speaker
move towards the next big problem and get somebody really, really sharp, most likely sharper than you to come and solve the problem that you're solving so that nobody else worries when you're trying to solve the next problem. So I think all of those things were like, and this, you know, designations just become a sort of a, you know, they block that, right? Cause they get, I have the wrong kind
CRED's M&A Strategy Insights
00:27:35
Speaker
of people through the door. I love that.
00:27:38
Speaker
A key aspect of building CRED has been the sort of M&A strategy that you've embarked on as a business. I'm curious to hear a little bit about some of those acquisitions and also maybe some lessons that you've learned since you've done quite a few that others who maybe are embarking on their first adventure in M&A might be able to pick up from you.
00:28:01
Speaker
I myself did a lot of my, all my first, as well at, so that was a very, again, one of the things that were very, very steep learning curve, but.
00:28:11
Speaker
We actually and again, I learned a lot from some of the people who are at credit who very very sharp They've you know done massive deals and and just to sort of work with them was Was absolutely brilliant and the one key thing that we looked at or I understood was that M&A is not just about acquiring a company that you can an M&A is a way of doing so many different things right you could you could scale up a product you could launch a new product and
00:28:36
Speaker
you could go to a new target audience. You can either build yourself and go to a target audience or you can buy someone who's working with that target audience and sort of let them continue the good work that they're doing. Sometimes it's a great way to get smart people through the door. So it's like a small company and they really want to do their own thing. So you pitch the M&A to them in the way that you continue doing the same thing. Just do it
00:29:01
Speaker
along with us. So it's an M&A can be so many different things depending on the situation that you are in and what you're going to solve for. So I think that was a key learning for me. And I think we've acquired a company, we've done all of these parts in different because we've acquired a small company to just bring because the founder there was super sharp and we thought he is somebody who should definitely be working
00:29:29
Speaker
you know within credit so we were like okay what will it take to make this happen and then you know they have some asks and you have some things on your in your mind and you you make sure that you sit down communicate well and and and you know get the deal done and then we acquired businesses because these were just like massive businesses in their own right right you know we acquired a sort of a corporate cards company that was that was doing really well
00:29:52
Speaker
And then we went and also, very recently, it's come out, we've acquired this company called Kubera, which is in the investment space. So they've also been doing a lot of great work on their in their own this thing. And for us, it was just about getting the right people to the door and making sure we when we see someone who's sharp and building for the for a target audience that is similar to ours.
00:30:14
Speaker
why not have them come and use their resources and let them use our resources. So I think that became the strategy. I think in terms of just doing the M&A, I think one mistake that I think we've made is or something that you learn from is that structure the deal right up front. I think the first thing you really have to
00:30:39
Speaker
close is basically that, you know, just have the structure very, very clear, build it out, talk to people, align everyone because it's very difficult to change the structure of a deal that you're planning to do midway through negotiations because then whatever you've discussed effectively, you know, sort of it gets wiped out. So I think that was one. The other key thing
00:31:04
Speaker
I mean, there are a few other things, small, small things that we also sort of learned, but I think this was the one big, big learning, which is that, you know, structure that you'll write upfront. I think the second is communication. As an in-house counsel,
00:31:14
Speaker
your role is not to or should not be to get into the weeds on what is happening in that diligence what is you know what is that what is that one contract that is there on page number 385 of that report doing right i think as an in-house counsel you you are much closer to the product and the you know your business and therefore your job should be
00:31:35
Speaker
I mean, if you have a large enough team, then great. I'm talking about from a vantage point of having a small team. So with us and a small team, I don't want my team to be focused on the diligence. I want them to be thinking about what the product is going to look like and what is it that you really, really want from the other side and make sure that doesn't get lost in translation between their lawyers and my lawyers and their product team and our product team.
00:31:58
Speaker
As a person who understands the law and understands the product, because it's in-house counsel, understanding business is absolutely key, you have a great vantage point to whether this deal will be able to solve for the ultimate objectives or not. And I think that is the metric that you really have to follow when you're doing an M&A, as opposed to making sure that you're squeezing all the value out, which is something that the other lawyers need to do. You're outside counsel. Yeah, outside counsel. Let the external counsel really
00:32:28
Speaker
Optimize for that clause or optimize for that change. And I mean, sometimes I'm sure all of us have been on calls where the lawyers are just going at it against each other and they're being aggressive and they're doing all of that. And in those situations, my job was always to
00:32:44
Speaker
pick up the phone while the call is going on, I'll pick up the phone, call the founder and be like, you know, don't worry. This is our understanding. Let them play their, you know, let them do their routine. And then this is my commitment. We'll solve this for you in this manner or something. So basically, if you just earn the trust, remember you're getting someone through the door to work with you. So don't over optimize for smaller things and leave some value on the table so that
00:33:12
Speaker
that value can grow and you can sort of, you know, you feel happy about the deal as opposed to going back thinking after the negotiation that, you know, I got squeezed or I should have just asked for that one more thing. That is not a great place to start a new relationship at is in my opinion. So I think those are some key learnings.
Understanding Indian Regulations
00:33:27
Speaker
I know that managing an evolving regulatory environment is a big part of setting cred up for the growth that you've seen and will continue to see.
00:33:36
Speaker
Can you talk us through maybe some of the novel legal questions that you're encountering as you navigate the regulatory landscape here in India?
00:33:49
Speaker
I think this is one of the key parts of the puzzle. Payments in India has become like this massive, massive thing with 350 million people using what is now what we call as UPI. And with that kind of scale, which is all of it has happened, I think, since about 2017, if I'm not mistaken. So last like six, seven years, very, very recent, there are a lot of
00:34:15
Speaker
It just naturally becomes the situation that the regulator keeps on evolving and learning and, you know, Frintechs keep on coming up and, you know, they want to move fast and they want to break things and they want to launch that new product that really adds a lot of great value and then the regulator comes in. So it's like a good battle to have. So managing all of that is
00:34:38
Speaker
is complicated on some days and in some days very very simple but I think the principle to look at and the way I look at it is just look don't go by what is written in the regulation. Every regulation when it is written has some context to it has some as a reason why it's drafted in a certain manner and that context and understanding which is
00:35:01
Speaker
in time, which is in time leading to that regulation, is what, in my opinion, is what is called the spirit of the regulation. And the principle for us at CRED, and something that I personally believe is that if you follow the spirit, you will more often than not be on the right side of when there is a subsequent interpretation,
00:35:22
Speaker
because you've gone by the principle as opposed to what is written. And what is written, we're all lawyers. We're all trained to interpret it from both sides. That's all of our law school. There's a paper, now argue A, now argue B, and brilliant. You're very, very sharp. You argued both points very well. But I think when you go into the spirit of a regulation,
00:35:43
Speaker
And that's something I had to do, because when I came in, I didn't have a lot of experience on financial regulation. So for example, if I were reading an NBFC, which is a non-banking financial corporation, or sort of regulations related to those companies, you would have to go back to 1998, 1999, when the concept was sort of first defined by the regulator. So the way I approached it was, OK, what was happening in 1997? What led to the regulator having to define this term? And before that, it was sort of an undefined, but still an existing business.
00:36:13
Speaker
These are some ways to understand and prepare yourself for what is coming because regulations come very fast in this space because it's just the nature of the game. So you have to be one step ahead or at least in
00:36:31
Speaker
You know, right in line with the regular, you can't, you can't lag. And this is one space where, uh, I genuinely feel the tech in the country is lagging behind because the regulation actually moves much, much faster. And it's very, very, it's not something which is very common tech generally outpaces regulation, but, but here in this payment space, very, very specifically, it's, it's completely the opposite. I like, I really liked that framework or that idea of, of trying to think about what the spirit of the regulation is.
00:36:56
Speaker
I spent a number of years advising different types of companies on privacy law, which I know is also an area that's developing here. Um, and I always saw my role as first saying, what can we do? But then moreover, what, what should we do? Right. Um, I just want to ask you a follow up here because I think it's interesting. Can you tell me or tell us a bit about how you think that mindset
00:37:21
Speaker
shifts the sort of comms marketing, uh, general PR strategy of a company like cred, right? I mean, I imagine you're also thinking, working very closely with, with those folks. I think that's a very, very important question. And I think that is, that is the actual question that you have to answer as lawyers. That's very pertinent, right? Because there is always, there is more often than not, there's going to be a different answer to what can you do and what should you do, right?
00:37:48
Speaker
And I think if you have to be a long-term player in any ecosystem, what should you do is what takes you there.
00:38:02
Speaker
My framework is what can you do is something which is right before you, which is perhaps the easier option to take, which is perhaps a slightly more aggressive interpretation of the regulation. I mean, if you're talking about data protection in that context, exactly. What can you do is, I can do this, and this will lead to this, an instant spike of my metrics. And then if it was 2021, then a big bump up in my valuation. So those kind of things are the can you do.
00:38:30
Speaker
But what should you do is when you actually reflect on if I do this, yes, this is the game, but if I do this, I take this hit and you take this hit in the short term, but we are establishing ourselves as a long-term player. And I think I personally, as well as Cred, I think we are very, very long-term players. I myself am a very long-term player. It's always about,
00:38:58
Speaker
And as a person, you can be a long-term player by just being a man of your word. I don't need a document to prove what I've said. I know I said something and today I don't want to do this, but because I've committed, we will do this. And as a company, that is a very similar value because you should do what is right. And sometimes what is right is not good for the revenue, but I think
00:39:23
Speaker
as responsible people, you're building shareholder value for the long term, right? You have to think of some of these things in a very long term. And if you think of, if you build that framework, it becomes very simple actually. So I think what you said was very, very important. What should you do is more often than not what you should be doing.
Unified Payments Interface (UPI) in India
00:39:40
Speaker
You mentioned UPI, and that's something that's, I think, unique to India and the sort of Indian financial services landscape. Just for maybe our international listeners, can you tell us a little bit more about UPI and how it factors into what credit is building and also how you think that benefits Indian consumers?
00:40:03
Speaker
So UPI is like, is a big, big, big innovation, right? And I just, I mentioned the scale, right? We have 350 million people using UPI today in the country. I think we did in December. And when I say we, I mean like the whole UPI ecosystem did, I think 12 billion transactions in a month. And I'm guessing the, I was some trillions of INR. So it's definitely like, you know, billions and billions of dollars of money moved through the, through the UPI rails.
00:40:30
Speaker
What is UPI is actually is because you have a few global listeners, so I'm just sort of trying to break down the concept. It's effectively Venmo plus plus, right? So the way I understand it, I think if you're in the US, if you have Venmo and I have Venmo, you can only transfer money from Venmo account to a Venmo account. Yes, exactly. That's the way it works, right? And the banks have gotten together and they have this thing called Zelle. And so you can transfer money instantaneously or at least very quickly
00:40:57
Speaker
from, say, Bank of America to someone else's Wells Fargo account. Okay, so that in the latter part is what UPI is, because UPI is effectively your bank account in itself being the wallet, right? So you don't need to put money from... So earlier in India, there was the concept of wallets, which was sort of the Paytm wallet, which was one of the largest use cases where you would take money from your bank account, put it to a wallet, and then that wallet could be spent at multiple places. But the merchant on the receiving end has to have a Paytm wallet.
00:41:26
Speaker
And Siler on the other side has to have a Paytm wallet to receive that money. And then the government went one step ahead and said, why do you need to have it to a specific wallet? Why can't we make this instant movement of money interoperable across all platforms? So they built the underlying rails and said these rails are this public infrastructure. The government built it. The government. So it's basically what's called the NPCI, which is a Section 8, which is not a Section 8 company, but NPCI is like this quasi regulator, which is now owned by the banks.
00:41:55
Speaker
which operates the system, has built this network, sets out all the guidelines, works very, very closely with the regulator. So that's how it's structured.
00:42:06
Speaker
So they built the rails, right? And now on top of those rails, you have different people, you know, applying their trains, right? So we have, we have, we have grid, we have big players like Google pay, phone pay, you know, Amazon, Paytm, all of these are sort of the large movers of, of funds and, you know, of transactions on the system. And the best part about it is I don't need to have the app that Tyler uses, right? I can just use my app.
00:42:35
Speaker
I can search for Tyler's, you know, VPA, we call it the virtual address or his phone number, and then transfer money to you. And it will happen even though we're not using the same app. And the same way the QR codes that are put up at the merchants, right? For example, if Google has gone and put a QR code at the merchant, you can use the CRED app to scan and pay, right? So it's completely interoperable. Basically, consumer first, instant settlement,
00:42:58
Speaker
delivered to you on a plate by the government. So it's quite fascinating and with 350 million people and something which is constantly innovating because there are masses. So this is like right now what we're talking about is the smartphone based QR scanning process. And now we know that the government is coming up with new concepts on 123 UPI, which is basically for feature phones, right? So people who don't use smartphones can actually dial a number and pick up the phone and make a UPI transaction.
00:43:24
Speaker
and then something called Hello UPI, so massive innovations to bring in the next 350 million people to use UPI. So that's the concept of UPI.
Advice for International Businesses Entering India
00:43:34
Speaker
But to come back to the question on what we are doing and how the whole is very beneficial for the system,
00:43:42
Speaker
I think it leaves a lot of India was actually cash-first economy. And when you're a cash-first economy, what Hardeep is doing in terms of, and if I don't have a credit score and I'm dealing always in cash, I cannot
00:43:57
Speaker
be eligible for a loan and I cannot really scale up my business etc. because I am unfortunately in a tier 6 town where those resources are not that easy to come. So I think the concept was that with the internet that was very cheap in India and the data being very easily available and I think there was a lot of effort put in by the government to get all the pieces together with cheap data, cheaper smartphones,
00:44:24
Speaker
and then having this UPI system etc. Because now what is happening is, so many people, for example in Bangalore, I'm sure you've used every auto driver, every place on the side of the road where you get a glass of juice which is 10 rupees, they're all accepting UPI. So what it does is, it leaves behind a digital trail of who you are and what you do and what is your cash flow.
00:44:47
Speaker
And I think that is a step towards bringing these people into the formal economy, bringing India's credit to debt ratio, credit to GDP ratio has been fairly, you know, the lower side as compared to the Western countries, right? And it needs to be slightly healthier, this thing, so that the right amount of credit is always very useful for people to scale up their businesses. So when you build
00:45:10
Speaker
a payments-led infrastructure to build a digital profile of people, you can use all of that data to see what are the cash flows like, what are the business that you do, et cetera, et cetera, et cetera, to build a profile which can then be used to augment if there is any other data available, or just do microlending. I think one of the key plans that this government has, and a lot of players are working with them, is on microlending and microcredit, so cash flow-based lending program.
00:45:37
Speaker
It's just been a huge, it has a huge potential to formalize large parts of the Indian economy, which were not so. And I think that is a great challenge and that's a lot of fun for, and to have private sort of companies participate in that is also very, very interesting. You mentioned some large
00:45:56
Speaker
companies, American-based companies, but large companies that are involved or leveraging this, Google, Amazon. I'm curious more broadly as you've worked with global businesses and global partners, for those listeners who are international who might be thinking about, hey, how do I partner with Indian businesses? Or maybe how do I expand or grow my business into the Indian economy?
00:46:20
Speaker
Do you have sort of general advice for, for those folks? I know it's a little bit of a tough question, but even mistakes that, that you've seen global businesses make here that you'd recommend that others try to avoid. Uh, I mean, we just, we just mentioned that word, right? India is not for beginners. So I think that is, uh, that I think is key. Just remember that. Right. Uh,
00:46:42
Speaker
India is actually, it's a tough place to do business because it's a culturally diverse, and I'm saying it's a tough place to do business for somebody who's not from India, right? Because it's very culturally diverse, it's a massive mass of land.
00:46:57
Speaker
was spread over different and you know that geographically very different culturally very different language wise very different I mean I frankly believe you know between when I am from Delhi I now live in Bangalore north and south these are like these could be two separate countries these are very very diverse different people right but but we sort of so when you're from India and you're born and you know you keep on doing this all the and you sort of you know keep on travelling the country slightly comes more naturally to you the whole cultural
00:47:27
Speaker
Sort of this thing and what are the what are the ways to do business, but I think for someone from a very Homogeneous, you know sort of country which is not as diverse as India that could be a challenge in and of itself I think that is one key thing that one should be aware of I think the other thing is like I think regulation in India is also very very
00:47:51
Speaker
is nuanced when I say you have to understand what happens in India to be able to appreciate what the regulation is.
00:48:02
Speaker
In India, when the RBI, for that matter, is building regulation. They're not just building regulation for Bangalore. They're also building regulation for a smaller town in some part of the country, in the Northeast, for that matter. These are smaller areas where people are not as financially aware as they should be, and then are susceptible to frauds or some other kinds of things.
00:48:27
Speaker
the regulator takes what is perceived to be an aggressive step by the industry. It's very easy to criticize and it's very easy to say that
00:48:37
Speaker
the regulator doesn't get it. Their job is to not innovate and stifle innovation. And there's a set pattern of things that you can say when the regulator does certain kind of things. But you have to put yourself in their shoes and be like, they are not just here for the top 10% of the country that you interact with. This is a huge country, and there are huge parts of this country that need this protective regulation from time to time.
00:49:04
Speaker
which keeps everyone's interests taken care of, so to say. So I think that is a very, very important thing as well. Having said that, specifically for payments, this is the wild, wild west. The speeder with the regulator comes up, analyzes the way they understand the nuance is very, very good.
00:49:30
Speaker
One key global player that entered the Indian space in a certain sector, I won't take names, but they came out on with a slightly more aggressive of this thing. Without really taking the prior consents of key government bodies, they started talking about how you could
00:49:48
Speaker
Do so and so by using the public infrastructure and the government didn't like it that much. Don't take us so granted if you come in. India is one of the places where Google and Amazon and Facebook and everybody has really done well. It's a very fair level playing field for all players, India or otherwise.
00:50:08
Speaker
But when you're coming to the country, at least make sure there's a checklist and make sure you follow the checklist. Don't skip steps. So I think these are a few minor 10,000 feet points to be mindful of. Really, really interesting.
Life Lessons and Reading List
00:50:23
Speaker
As we start to wrap up, I've got a couple of questions that I like to ask a lot of our guests. I know you like to read a lot, even listen to some audio books now too. And I travel a lot, so I read a lot of books on airplanes.
00:50:37
Speaker
Any books that you would recommend for our listeners, maybe that you've read recently? I'm reading a few books because I've sort of gone away from reading one book at a time to... I'm the same way. So yes, you're in good company. Yes, because that was also a mental model change, right? You go from reading one book, which you should open start to finish, to going reading multiple books. But I think I kind of like this because you're in a different mind space on a different given day and you can pick up that kind of book.
00:51:03
Speaker
But I think right now I'm reading, I'm actually, this one's kept here, I'm reading Atomic Habits. It's something I've always wanted to read and I'm trying to get more physically in shape in life. So I'm trying to sort of learn and see how can you build more or build better habits. I think the other book I'm reading is Siddhartha, which is on Buddha by Hermann Hesse. It was recommended to me by someone. I've got through to one part and it's a fairly deep book which you cannot read
00:51:32
Speaker
Every day it's something that you read a chapter and let it simmer inside you for a couple of weeks You know before it sort of and and it before it sort of starts enlightening you so to say so I think that's that's another great book The I'm actually I also just ordered this one Chris Dixon read write own which is I think his book on on on the on the upcoming web 3 and web 2 and web 3 so the interface between you know the new internet that is sort of being developed and
00:52:01
Speaker
On audiobook, I'm listening to Sovereign Individual, which is also this. That is actually a brilliant book. Since we're all in the tech space, if I were to recommend one book to read, that would be that one. It's a book written in 1998, which talks about the coming of the internet age and how the world will change because of the internet age. It makes some crazy bold predictions, which you can sense in 20 years.
00:52:24
Speaker
30 years are sort of coming, you know, you can see them come true now. So just that vision of an author when they're writing back in 98, talking about how the world is going to change because of internet is fascinating. So I think that's a great book to read.
00:52:39
Speaker
What I've read very, I'm a cricket fan. So I finished Vasim Akram's book very recently, which is called Sultan is Autobiography. That was a good light read on the side. Yeah. Just, you know, because I've seen him play, just read some of, you know, when you're reading, it helps you play back some memories of his game and, you know, he's coming bowling into Indian bowlers. And so that's some, I like reading autobiographies as this thing, especially sportspersons. So, so yeah, that end up sort of reading
00:53:06
Speaker
Slightly. It's not, it sounds like a lot of books, but I've been trying to read these for six months now. It's good. Yeah. Uh, we will add those recommendations to the show notes so folks can, folks can find them. Sovereign individuals sounds particularly interesting. Um, I just have one last question for you that I like to ask a lot of, a lot of our guests. Uh, if you could look back on your days, sort of just getting started as a, as a young lawyer in Delhi, uh, what's something that you know now that you wish you'd known then?
00:53:37
Speaker
Uh, I think the first thing I would tell myself, uh, would be, uh, it's, it's, it's a concept. Now I call 80 OP, which is at your own pace, right? Like, uh, and, and it's, I mean, one, the thing that came to me, so let's everybody's, everyone's running their race. Right. And, and your job is to make sure you're finishing the race. Don't leave anything midway.
00:54:02
Speaker
If you finish first, that's great, but the job is to finish. And the analogy that I drew when I was talking to one of my friends was, when someone comes and tells you, I just ran a marathon.
00:54:12
Speaker
The question that you ask them is not, did you come first? The question you ask them is, oh man, that's awesome. What time did you finish it? And when someone says I finished in two hours, the answer is mind blowing. And someone says six hours. I'm like, still mind blowing. Finishing a marathon is a massive thing in and of itself. You don't have to finish it in three hours.
Episode Conclusion and Engagement
00:54:31
Speaker
So I think that someone would, of course, when I was young, I was, you know, I want to, you have a checklist, you want to do this, accomplish X, Y, Z, you know, by certain time. And I think that for me was,
00:54:42
Speaker
I would tell myself that, just relax, things will happen at their own pace, just keep doing what you're doing. The other thing for me personally was, and I'll tell 23 year old me, or like a younger me was, money is not the goal. Money is a great byproduct. It is not the goal. So I think that is something that I realized at some point fairly early on in life. So I mean, a couple of years back failure, which I consider fairly early on, because you hopefully live till 60.
00:55:10
Speaker
Uh, but, but I think that was a massive moment of, uh, just clarity in life that, you know, this is not the goal. It's a, it's a good thing to have. There are a lot more important things you want to do in life. And that should be the goal. And once you start on something, finish that or let, let other things happen to you on the side. So those are two things that I'll tell myself. That's great advice. Uh, this has been such a fantastic conversation. Thank you so much for joining this episode of the abstract hard heap. Thank you so much for having me.
00:55:37
Speaker
And to all of our listeners, thanks so much for listening and we hope to see you next time.
00:55:45
Speaker
If you enjoyed this episode, I'd recommend that you give my other live interview from Bangalore, India with Siddharth Manchanda, External General Counsel at Unacademy, a listen. You can also subscribe so you get notified as soon as we post a new episode. And if you liked this one, I'd really love to hear your thoughts, so leave a rating or a comment. If you'd like to reach out to us, our LinkedIn profiles are in the description. See you all next week.