The Paper Millionaires: What BetterPlace's Pravin Agarwala Knows About ESOPs That Most Founders Don't
The man managing 30 million frontline workers explains why employees ignore equity, what makes them believe in it overnight, and how he acquired 8 companies without losing a single founder.
The most instructive product failure in BetterPlace’s history happened in a basement.
The company had built a facial-recognition attendance system. Pravin Agarwala’s engineers, trained in the same enterprise-software tradition he absorbed over 18 years at SAP, tested it exhaustively. Every test passed. Then they installed it at a client site and it died on day one.
We launched it at a customer and it failed. And every test that we did, it worked. It failed because we realized that their attendance actually is at the basement of the building, and there’s no network connection there.
The client could not move the punch-in point above ground, so BetterPlace had to reinvent the product for a world without connectivity. The gap between what the engineers knew and what the basement knew is, in miniature, the story of India’s frontline economy. It is also, as I discovered over an hour with Pravin on Built to Share, the story of how the startup world thinks about ownership.
Check out the video of the conversation here or read on for insights.
From a news story to 30 million workers
In 2014, Pravin was running SAP’s cloud ERP product globally, the peak of an 18-year career that began with writing C++ code. Then a news story broke in Bangalore: a five-year-old girl molested by her school teacher, a repeat offender whose earlier offences had never been formally reported. Pravin had two daughters of similar age. He quit.
His first instinct was to build a trust layer on top of Aadhaar as an NGO, with mentorship from Nandan Nilekani, the architect of Aadhaar itself. Then he hit a wall: the data he needed did not exist. Not with the government, not with companies, not anywhere. So in 2015 he made the pivot that defined everything after. If the data does not exist, build a business that creates it. BetterPlace began as a background-verification company for frontline workers, with one design choice that still shapes it.
We decided that we will not build an exclusion system, we will build an inclusion system. If you exclude them, then they will become even more criminal in the future. You are actually not solving the purpose at all.
A decade later, that seed has grown into a full-stack workforce platform, spanning hiring, attendance, payroll, compliance, upskilling and gig-work matching, that the company says has touched over 30 million workers across India, Indonesia and Malaysia. BetterPlace has raised about $98 million from investors including Jungle Ventures, CX Partners, 3one4 Capital and Macquarie Capital, reported revenue of Rs 533 crore in FY23, and is preparing for an IPO Pravin targets within 12 to 18 months.
The scale of the problem it serves is hard to overstate. In BetterPlace’s sectors, attrition runs at 10 to 25 percent. Per month.
If you have a thousand employees, you end up hiring one thousand to three thousand employees every year.
The puzzle, and the heresy
Here is the thing I run an ESOP secondaries fund to solve, and the reason I wanted Pravin on the show: employee stock options were designed for a five-to-six year journey. Building a company now takes 15. Nobody redesigned the instrument. Everyone just kept issuing it.
Pravin sees the consequence up close. Inside his own company he describes three kinds of ESOP holders: senior leaders who ask to cut their salaries for more equity, mid-level believers waiting for an event, and a majority who see only paper. What changed the mix at BetterPlace was not education. It was visibility of liquidity. With the IPO in sight:
No one talks about salary hike. Everyone is talking about, can I get some more ESOPs?
The instrument didn’t change. The horizon did.
And there is a way to shorten the horizon without waiting for an IPO. In 2020, mid-COVID, BetterPlace ran a small secondary sale, letting some employees convert vested options into cash. The amounts were modest. The effect was not.
If you do a secondary for twenty people and they get even thirty thousand, fifty thousand, a hundred thousand in their pocket, the entire belief system will change from one day to the next day.
This is what I call the hydration break. Everyone says a startup is a marathon, but in an actual marathon, somebody hands you water at the five-kilometer mark. The industry is catching on: Flipkart’s July 2025 buyback put $50 million into the hands of roughly 7,000 employees, and with 28 startups having filed DRHPs by mid-2026 while late-stage private capital stays selective, secondaries are becoming retention infrastructure rather than exotic events. BetterPlace has gone further than most, running three parallel ESOP tracks: standard four-year vesting, IPO-linked options that vest fully on listing day, and an EBITDA-linked structure where over-performance against profit targets is split roughly 50-50 between cash payouts and fresh equity.
Then came the moment I have thought about most since. I told Pravin about two of our fund’s client companies, one that gave ESOPs to all its cooks, another to all its dhobis. I expected polite enthusiasm. Pravin, who has more data on frontline workers than perhaps anyone in Asia, declined to be polite.
You look at large manufacturing, large retail, large BFSI, they do not think this way. Even if you give it, you might end up giving something which is not significant enough for the person to stay back. Is this going to happen? I don’t think so.
His reasoning is uncomfortable because it is grounded in his workers’ actual lives. A person earning Rs 60 an hour, roughly Rs 15,000 a month, needs a refrigerator in two years, not an IPO in three. What works for that person is an emergency fund, a visible career ladder, and an earning path from Rs 60 to Rs 120 an hour through upskilling and gig work. The state, meanwhile, is building the floor while startups experiment with the ceiling: India’s four Labour Codes came into force in November 2025, giving gig workers statutory social security for the first time, mandating double overtime pay, and making principal employers liable for vendors’ compliance failures. NITI Aayog projects India’s gig workforce will reach 23.5 million by 2030, up from 12 million in FY25. Pravin’s own estimate runs far higher, at 5 to 9 crore, a gap he attributes to how much informal work the official numbers miss.
The acquirer who asks a strange question
There is a second playbook in this episode. BetterPlace has acquired eight companies, including OLX People, OkayGo, Indonesia’s MyRobin and Malaysia’s Troopers, and has lost none of the founders it acquired. One of them, OkayGo’s Saurabh Chawla, was recently elevated to co-founder of BetterPlace itself. The filter behind that record is not financial. It is a single question Pravin asks before any deal:
Number one, as a principle: can I report to that guy or not? That defines whether I can work with that person.
The rest of the system is equally people-first. Acquired employees get day-one commitments to staged ESOP buyouts, cash rather than messy share swaps. Founders keep running their businesses with their own KPIs. Town halls get timed for Jakarta, not just Bangalore. Eid greetings are audited as seriously as revenue numbers.
Business KPIs, I’m 100 percent sure you will achieve, because that’s the reason you got into the acquisition. It’s the other things that will make it successful or derail it.
Acquisitions, equity, retention: by the end of the hour it was clear these are the same subject wearing different clothes. Ownership is a belief system, belief requires evidence, and the founders who win the next decade of 15-year journeys will be the ones who manufacture that evidence early, in small, regular, visible doses.
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Satish Mugulavalli