Navigating Startups as a CFO: An Interview with Varun Gehani

Interviewed by

Leen Shami

January 25, 2023


Tell us a little about yourself. If your life was a movie, what would your career look like?

My life is like a movie for me, and I am thankful to god for every day and for being where I am today. 

I think honestly, hand on heart, I would be flying a jet, whether that led me to the heights of success or not! 

When you start your journey in a suburban background, in a dynamic country like India with fierce competition, you really have to hustle your way out. 

I started with setting up and achieving small goals that organically opened new doors and new opportunities for me, especially in times when I was exposed to new boundaries.  

But embarking on my journey as a Chartered Accountant, I continued sailing in the vast ocean of the financial sector and kept following the most logical path I felt for myself throughout my career.

This has led me to where I am today; continuing to contribute to a socio-economic cause via Buy Now Pay Later. And as for my movie script, I feel this is just the beginning. 

"A CFO's role has completely evolved from being a closed-door, finance-focused function to a strategic leader steering the company’s ship in the right direction."
You mentioned in an earlier conversation that stepping out of your comfort zone is really important. Can you tell me about a time when you stepped out of your comfort zone throughout your career journey?

Looking at my two-year-old daughter, it starts from childhood, doesn't it? From crawling to walking, walking to running, and so on, a child simply has to go beyond their comfort zone to grow.  

In a similar thread, my career has not been without challenges and moments of discomfort. Whilst I have always loved numbers, I never imagined I would qualify as a Chartered Accountant in the corporate world, a career that has led to 14 years of experience across 8 roles in multiple sectors and markets.

I'd like to believe that I have done justice to each of the roles, as for me,  the life cycle of learning and contribution has always been a constant. So, if we were to place these in 3 buckets. I'd say the first one would be three months of grasping, then six to nine months of excelling in a role, and then it's about a year plus of contribution. Now, as you climb the ladder, it’s inevitable to experience  multifaceted complexities; success does not come without overcoming barriers or the drive to exceed expectations.

But I think, in a nutshell, it remains the same, the overall dynamics, right?  

It's quite natural initially to feel like a fish out of water when you are thoroughly taking a plunge into a completely different domain, which is definitely not your comfort zone.

For me, the most memorable moment of stepping out of my comfort zone, amongst others, would be when I moved from a senior credit underwriter to coverage (business side of the bank), and I eventually ended up in a more strategic role in building the digital ecosystem at the bank. 

However, you learn on the go, and over a short span of time, you develop your new comfort zone! 

I think you can only realize your true potential by exploring your boundaries, not to mention your personal intellectual growth in a given role will also be finite. 

You joined Postpay in August 2021, roughly 2 years after it was founded. Typically, how do startups know when it's time to hire a CFO?

Just two years; it feels nothing less than five years now ! The growth has been immensely steep from an intellectual perspective.

Coming to your question, I wish there was a textbook answer. 

From experience, I would say it’s that moment when you have successfully launched your product as a business in the market, and you're breaking your shackles as a startup and heading into a hyper-growth phase. And this could be at any point in time through the life cycle of the startup - for a couple of startups, it could be at just post-seed, I would say, or closer to series A. A couple of the other ones would be post-Series A. So the ideal timing is at a point in time when as a company, you are growing so fast that financial management requires proficient and undivided attention. It is truly that time when a startup should think that this is the right time to hire a CFO.

How does your role as CFO generally evolve throughout a startup's lifecycle?

If I were to answer, what's the role of the CFO? I would say it is to ensure the lights of your company are always on. That's truly your primary goal!

However, as with any senior leadership role within a startup, you become agile and embrace multiple hats whilst maintaining close to your core. And whilst my core will always be finance tied to fundraising, financial management, budgeting, treasury management, etc., my role at Postpay today is not without overseeing risk management, operations, compliance, governance, and customer experience. And not to mention the value I contribute to sales and partnerships from a strategic perspective. 

So to summarize, as with most other key stakeholders at a startup, the role has to be multifaceted.  It can't be one-dimensional.

Like you said, it's multifaceted, and it has become more common for CFOs to play a strategic role in their companies. Have you introduced new strategies to Postpay since joining?

Absolutely! A CFO's role has completely evolved from being a closed-door, finance-focused function to a strategic leader steering the company’s ship in the right direction.

At Postpay,  I have driven major strategic decisions across various functions alongside our CEO. At any startup, a CFO should not be confined to finance and fundraising alone. It’s important to contribute and influence the strategy across multiple domains; sales, marketing, and tech to name a few.

Every day I find myself asking business case questions that aren’t restricted to finance; “Is this product truly valuable to our customers and partners? Does our commercial strategy line up with our business goals? Do we need to evaluate any variables within the product roadmap?”

And I wouldn’t change a thing, honestly! I'm grateful to have the opportunity to continue to grow personally as well as positively contribute to every function and domain that drives our company's success.

And you mentioned you work with Tariq Sheikh, the CEO of Postpay, right? Typically, CEOs set the direction for a company, while the CFO supports that direction. At Postpay, how closely do you work with the CEO? And how do you ensure building a strong CEO-CFO relationship?

Yes indeed! Any key leadership position in an organization, and that of CFO, would typically have three elements to it; your vision, strategy, and execution.

If you've laid a clear and lucid plan across these three elements, then you're aiming for success. And to plan this effectively, you have to be hand in hand with the CEO and other key stakeholders. 

As far as relationships are concerned, I'm a strong believer that relationships cannot be either created or fabricated, they have to naturally build over time with confidence that you generate amongst each other.

One of the key fundamentals that both of us truly come in and bring to the table is the hustling mentality. It's a common word that we hear in the startup eco-space, but it's truly the need of the hour, every day! You wake up in the morning, and it's hustling from one desk to the other. So taking the most logical decision in the organization's interest has been a clear common motto.

One of our key principles at Postpay is to ‘Be Real’, which only means you have to ‘Be Yourself’. How long can you wear a mask, or can you be someone else? When you're portraying someone else, you will eventually have to give in, and you might not make the same decisions. That’s true for yourself as well as the company. And hence, we truly acknowledge and appreciate each other's perspectives.

There would also be times when you need to challenge each other in decision-making, but I think with mature individuals, sanity always prevails, right? If you have a logical rationale for a decision that you are challenging, then I think the results would eventually be positive.

So overall, both of us believe in the motto that processes are also as important as the outcome; hence we continue to focus on them. As long as the paths are aligned, I don't believe a situation of grave conflict will arise. Having a relationship with a few undercurrents wouldn't truly help either of us or the organization, so it has to be a naturally evolving relationship. 

Looking at your career journey, it is evident you’ve had extensive experience in the banking industry. Are there significant differences between the financial roles in the banking industry and a startup? Can you elaborate on that?

Yes, absolutely! I think, to be honest, it's more like a 180-degree change in my career. I wouldn't say a complete 360 switch, because I probably continued the same role but from the other side of the table.

So during my career with Citi, it was more of an advisory role I played, advising the CEOs and CFOs of my clients. The major difference now is moving from an advisory position to executing it, right? In a nutshell, you put your money where your mouth is, and this is exactly the thought that's coming by now. Standing by your opinions and decisions in creating a successful business is, essentially, what you end up being on the other side.

I think another major difference is moving from a thoroughly structured and also risk-averse place to an unstructured and completely agile one. So every small or large decision that you make today will shape the future of the company. The overall time spent in large structure organizations (banks ) versus a fintech is at least 10x. A few of us, as leaders within the organization, make a logical decision, and it is executed the very next minute. As against a completely structured organization, like a bank, where you would have to go through a variety of chains of approvals. Nothing wrong with it, right? But it's just about speed to market. 

Another major factor is the sense of creation. While you are empowered to steer the ship of the company, the sense of owning something, whether great to not so great, is immense. This is something that is not rare to find in a startup.

An effective CFO not only prepares financials but also adapts the financial data to the decision-making process. How do you ensure you’ve chosen the right analytical framework and context for the problem?

Preparing and presenting the financial statements is an outcome or a result. The decision making, all the strategic alignment is truly what's done before that, which is the key. 

One of our principles at Postpay is to be obsessed with data. A decision or challenge to a thought process would not be considered or evaluated without seeing the data to support its case; whether this is financial data, product analytics or even marketing data. It is this ethos that fuels us with confidence when presenting a new framework or finding a solution to a problem. 

Creating business models, strategic alignment of the company, and aligning with the board; all of these are first steps and eventually feed into the financials. So, the preparation of the financials, and presentation of the financials is just a result. It's an outcome of what has gone throughout the journey of the company or its operations.

"The most important role of the CFO is to ensure the lights stay on, and that means having a constant laser focus on your business and runway."
In your experience, have you encountered any challenges related to expense management? 

You are opening up a pandora's box! Expense management is not really plain and easy as it sounds. You think, do you really need a tool? Why can't you do it to yourself? You're certainly behind the eight ball if you don't get it the right way - as we say in the game of pool. 

The challenge is right from identifying the need to putting up a clear structure of governance in place. Having the background of a complete structure of the organization, you can surely set up an extremely watertight expense management policy. I've seen this all my life throughout the 14 years of my career; as I have always been in a structured place; we can have a 50-pager expense policy that articulates each line and all the different policies of who you should go to for approval, or what can be approved, what not. 

But you can't have overkill in a startup, right? It has to be fairly agile. People also understand the purpose of the policy. The purpose of the policy is not to create an artificially creative expense structure. The policy's purpose is to have the right framework and the lightest one. So while keeping that in mind, I think if you are able to place the right controls and ensure that you don't overcomplicate it, you have cracked the code.

It's a catch-22 situation every time you think about what kind of expense policy you need to adapt to. But, what we've also seen at Postpay from when we started, which is 2019  up until today, we've also evolved from a startup to a scale-up, and certainly, there is a need for a decent expense management policy and tool.

We have created something in-house, at this point in time, but we continue to explore external tools, which could be a more efficient way to manage our expenses. 

And if I may ask, how did you manage expenses at some of your previous roles? 

I've always worked in larger corporate houses and institutes and the expense management tools have been completely structured. The likes of large audit firms, multinational banks, etc., all have their self-created in-house tools. If you ask me now, sitting on the other side, could it have been simpler, yes definitely without a doubt. It is surely a bit overcomplicated. 

Do you think you need to go through the entire chain of approvals throughout the life cycle of a journey for a small expense? It is also about the overall timelines - right from the time you put up the expense till the time you get paid. I think there's a lot of pain to be solved there. And if you ask me, whether people have really got the right recipe , I don't think they have. And that's not only in organizations as large as banks or financial institutions but also in mid-tier companies. When I used to speak to a lot of my clients in the mid-tier, and when I'm saying mid-tier, it's a $ 100 to 500Mn (revenues) company, they also continue to face a similar dilemma. 

You want to have a reasonably decent expense management tool, but as I said, it's a catch-22, you don't want to complicate it beyond a point. 

In such unprecedented times, where the IMF and World Bank have warned us about the risk of a global recession in 2023, how do you navigate the turbulence as the CFO of a startup?

Truly we've heard time and again about a weak outlook for 2023. Whether the climate has a deep or shallow impact,  here for the short or long-term, these are warnings that can’t be ignored. Costs are on the rise, interest rates are starting to bite and consumer spending is in decline. All of these symptoms naturally learn towards an incoming recession. What’s more, the return of Covid-19 in China is another symptom to add to the list of concerns for our economy.

Navigating a startup through these turbulent times is not a piece of cake. As a prudent CFO, you need to be prepared for the worst whilst planning for the best outcome with the right amount of growth. This period of economic uncertainty demands agility, quick adoption, creative thinking, and faster decisions.

As I mentioned earlier, the most important role of the CFO is to ensure the lights stay on, and that means having a constant laser focus on your business and runway.  Now, I think runway, all of us are well aware of this term; it's the cash that you have in hand with respect to how much you burn every month. So curtailing your burn could be a double-edged sword when you are placing that in context with growth, and hence one really needs to circumnavigate the situation very meticulously.

In these times, it’s not important to become a unicorn, but more a camel that conserves its resources. 

Now, given that we have noted early signs of upcoming turbulent times, we at Postpay are reasonably well placed as a company to navigate it. Having said this, we are also cautiously optimistic as we've seen these signs and have a decent adaptive plan in place; and are all set for a good 2023 !

For startups looking to raise in 2023. Would you have any advice for them? 

2023 is coming with its own unique challenges and I don't think this is truly the time to go out and possibly do a fundraise, or if you want to do it, then do it now rather than in Q3 or Q4, only if we could predict the future, but it probably is going to be a bleak later on.

What we've seen across the GCC is more like a ripple effect. So you see the signs earlier in the west, you see what steps they're taking, and then eventually this kind of falls down here. Apart from a couple of crises that we saw earlier in 2015, unique to the region, that was more around the Small and Mid-Market segment. 

Overall, we at Postpay are thankful to not be completely dependent on fundraising at this point in time. Valuations might not really stack up, but it is really not as bad as it looks like from the outside. And If there is a region to watch for in the year I believe it is the GCC !

Is there any advice you can give young accounting and finance professionals?

Finance and accounting professionals will continue to be at the core of every economy. The passing ratio of candidates across various accounting and finance bodies globally – CPA, CA, ICWA, amongst others is really encouraging and it only proves that Gen Z’s are very much keen to make a career in the finance stream.

The world of finance has a lot to offer, certainly more than a successful career! I would really encourage the upcoming professionals to truly explore their boundaries from inception and not be bound by a 9 to 6. It includes exploring a career in the large corporations, financial industry, government bodies, audit firms, startups  and a lot more. 

You shouldn’t be afraid of making difficult career choices at different stages in your career. Making such bolder calls will only help you develop as an individual and as a great finance professional in the true sense. It will give you a 360-degree view of the world which will enable you to appreciate every point of view thereby creating a perfect recipe for a successful leader. 

 I truly wish everyone - good luck!


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