The 39-year-old CFO of Chalo believes that cutting five percent here and ten percent there to save cost doesn't do much good, while also thwarting growth. Instead he decided to find opportunity in a crisis
Vibhor Gupta, CFO, Chalo
Image: Neha Mithbawkar for Forbes India
“Five percent here, 10 percent there… how is it going to make an impact?” As an investment banker who started his career with Bank of America in 2005, Vibhor Gupta was baffled with the strong arguments dished out by proponents of cost-cutting. The counter argument, too, carried punch. Sucking out cost can save pennies, but can’t push growth. It can definitely help survive, but kill all chances of flourishing. The IIT-Bombay grad and IIM-Calcutta alum, on the contrary, swears by the power of invisible. “Something which is unseen can be easily overlooked,” says the 39-year-old chief financial officer (CFO) at Chalo, alluding to a kind of cost which is mostly, and conveniently, skipped: Opportunity cost.
Back in July 2020, when Gupta joined Bharat-focussed mobility startup Chalo, the country was still in the midst of the first wave of the crippling pandemic. To make matters worse for the new joinee, who had spent almost a decade at UBS before taking a plunge into the startup world, the travel and mobility industry found itself badly battered. Around 2,000 buses under Chalo’s operations were off the road, which meant almost zero revenue. The startup had raised $15 million in February 2019, and the immediate task for Gupta was to raise more money.
The challenge was hunting for investors. The ravaging pandemic had seeded doubts in the minds of the funders who stayed away from the segment. Gupta spotted opportunity in the crisis. He prepared a business plan, interacted with potential investors, convinced them about the promising prospects of the mobility sector, and reached out to the existing backers with a pitch of a sustainable business with good fundamentals. The need of the hour was not to cut costs but double down on expanding operations. The logic was simple. Gupta wanted the company to be ready to make the most of the tailwinds whenever the pandemic subsided. In December 2020, the company raised an undisclosed amount. The GTV (gross ticketing value) then stood at $31 million.
Nine months later, came another funding round in September 2021. This time, the amount was $40 million, and the GTV had doubled to $62 million. Loaded with money, Gupta pressed on the pedal a month later when Chalo acquired Amazon-backed Shuttl. The guiding force behind the maiden buyout was again the invisible force: Opportunity cost. Shuttl, which reportedly used to fulfil about a lakh rides daily through 2,000 buses across cities such as Delhi-NCR, Pune, Mumbai, Kolkata, and Hyderabad before the outbreak of the pandemic, was Chalo’s best bet to not only expand operations but also give it an urban makeover.
(This story appears in the 25 February, 2022 issue of Forbes India. To visit our Archives, click here.)