“My view is that The Chinese government has strategically tried to gain market share and access across the world. But opening access to its own economy…It has to be quid pro quo. They have not played by the rules for 30 years and that is why they have built up all this capital,” he said. “Why should we give equity in our fast-growing companies, data and revenue streams to them (China)? Give to others, like Americans, Japanese, Britishers (who reciprocate).”
He backed the government’s decision to screen investments from China. But he said the government should come out with rules making a distinction between what is considered an investment and what threshold of shareholding is considered control so that local companies don’t get hurt in a potential backlash.
Dahiya is the first CEO of India’s unicorns (private tech companies valued at over $1 billion) to speak out openly about China. Many other large companies like Paytm, Zomato and MakeMyTrip have come under fire on social media and Google Play Store for having investments from Chinese corporations like Ant Financial and Ctrip.
He said that Tencent had purchased existing shares from another investor, US-based Tiger Global Management, and had not invested fresh capital in the company for business expansion.
“They have been a good shareholder. I don’t think it is a fair thing to ask. If they were willing, we would be happy to buy their shares. The company has the cash flows to buy it back. The company has $200 million in the bank and they bought the shares for $150 million,” said Dahiya, whose company is valued at $1.5 billion.
He added that the transaction was done last year when India and China had friendly relations. He added that back when the stand-off in Doklam was going on in 2017, PolicyBazaar had walked away from an investment by another Chinese conglomerate, Fosun.
“Eventually, one has to look at who has control and whose house are you breaking. Are you breaking your own house or your enemy’s house? Any smart business person knows that a 10% shareholding means nothing. A 40% shareholding means significant control and 100% means full control. If I had a 40% shareholding, then I may have something to hide,” said Dahiya.Dahiya’s rare stand among new-age entrepreneurs also comes as four generations of his family have worked in defence services. He said that the business of EtechAces, which includes insurance portal PolicyBazaar and lending services portal Paisabazaar, has been doing well despite the Covid-19 pandemic.
Its overall insurance business is up 50-60%, given increasing awareness and need for both life and health insurance. The lending business, which was hit in May due to the collapse of economic activity, has also registered a 4x growth in June and has started recovering.
Last week, TOI reported that Japan’s SoftBank Vision Fund has invested another $130 million in the company, taking its shareholding to over 15%. The company’s other major shareholders include Singapore’s Temasek and Info Edge, which owns portals like Naukri and 99acres.