PagarBook bought Indonesian rival Vara in an all-stock deal worth $5.6M

PagarBook makes a staff and employee management app for small businesses and their workers.

Acquiring Vara would leave PagarBook the last specialist standing in SME staff management, with a ready-made Indonesian market paid for in its own shares.

PagarBook: $15M Series A (December 2020) plus a small June 2021 tranche at a valuation above $100M; Vara: $4.8M seed (July 2021).

PagarBook came out of Sequoia India's Surge (fourth cohort) and raised $15M in December 2020. Vara, founded in November 2020 by Vidush Mahansaria and Abhinav Karale, joined Surge's fifth cohort and announced a $4.8M seed in July 2021 from Go Ventures, RTP Global, AlphaJWC, FEBE Ventures and Taurus Ventures.

Both hit the 2022 wall. PagarBook laid off around 80 employees and failed to extend its round beyond a small June 2021 tranche; OkCredit discontinued OkStaff and Khatabook shut Pagar Khata to refocus on bookkeeping and fintech. Vara's websites were erroring at login even as Sensor Tower credited Bukugaji with about 1.27 million downloads, mostly from Indonesia.

In June 2022 PagarBook's board approved acquiring Vara Technologies' securities from its shareholders in stock: 122 equity shares and 1,006 Series A4 CCPS at Rs 3,88,030 each — about Rs 43.7 crore, or $5.6 million, against the $15.5 million Fintrackr said Vara was worth at seed.

Entrackr read the deal as consolidation in a cutthroat market where OkCredit and Khatabook had both abandoned staff management, leaving PagarBook the last specialist standing.

PagarBook could not raise fresh equity, so paying in stock turned its own shares into acquisition currency without touching its runway.

Vara needed a way out: a $5.6M stock offer against a $15.5M seed valuation, with its websites failing, beat burning down alone.

When fresh capital dries up, stock becomes the currency: a cash-poor acquirer can still consolidate a category, and a struggling founder can still exit, in discounted shares.

As of the June 24, 2022 report the acquisition was imminent — Entrackr wrote that PagarBook was 'all set' to acquire Vara per the board resolution. The deal handed PagarBook a route into the Indonesian market through Bukugaji while it was still searching for a funding round that had eluded it since June 2021, and crystallised a steep markdown for Vara's 2021 seed backers.