BharatPe: All About Bharat’s Flying Future Unicorn

Unicorns and Unicorns everywhere! 
Relax, we're not talking about the mythical creatures but something even more exciting! We're talking about the startup trend, which is on the rise in India these days. Yes, for the past few years, India has been witnessing a great startup uprising, with some of them being phenomenally good enough to put India on the maps of foreign investors. One such startup is Bharatpe, which is currently “the talk of the town”. 

The returns, growth and the magnitude of the business model held by Bharatpe are attracting a lot of attention these days.

Let us explore this in-depth and understand how it transformed itself from a small startup to a unicorn making millions today.

Start of the BharatPe

BharatPe is a startup based out of Delhi. Its CEO and co-founder Ashneer Grover, along with fellow co-founder Shashvat Nakrani, started BharatPe in 2018. The company's primary purpose was to offer the merchants and business organizations a platform to ensure financial inclusion. While many people adapted to the growing internet era, some are still stuck offline, and BharatPe focuses on them.

As a lot of companies focused on the consumer segment of the Indian markets, BharatPe is one of the few startups that focused on making the life of entrepreneurs and merchants easier. The company came up with an interoperable UPI QR code, using which the merchants can derive their payment made by customers on a varied number of wallets available on the internet. Further, its unique lending services put it on the charts of growth.

However, despite having a brilliant idea, everything was not merry for the fintech startup. They had to go through tremendous hardships in convincing the merchants to adapt their services. 

However, the fortunes eventually favored them in no time, making them a unicorn that is currently employing around 500 employees and is having a fully functional business in about 75 cities.

Business Model of BharatPe

Running a small scale business? Then you might be in need of working capital to fulfill your day to day requirement. The various documentation and processes involved in acquiring a proper loan can be a huge task. And that is where BharatPe jumps in.

BharatPe has a B2B (business to business) model that helps the merchants across cities acquire a loan to facilitate their working capital needs in just 5 minutes. Yes! You heard that right. The enhanced services offer merchants to undergo document verification from their very phones in less than 5 minutes. And thus, they can avail a loan in no time. 

Apart from that, the company also offers to act as a bridge between two merchants who wish to lend. Say you want to lend your excess money. Using the BharatPe platform, you can lend money to fellow merchants and traders who are in need of cash. 

BharatPe is also the first of its kind to introduce a 0 transaction cost on QR code-based transactions, enabling merchants to indulge in easy transactions with customers. However, the major portion of the startup's revenue is associated with its lending business and the related interest charged.

About 95% of the revenue comes from the lending business, which offers about 200 crore worth of loans to the various business merchants on a monthly basis. The fintech crossed the mark of dispensing 1000 crore worth of loans to its merchant friends in the previous financial year and is aiming at a more fancy number in the days ahead. 

The enhanced customer service and the focused business approach has enabled it to receive enormous trust from its users. It currently has about 50 lakh merchants using its platform. 

The business grew about 30 times in 2019. Despite the hurdles of 2020 and the lockdown, the business model of Bharatpe has fetched a 5-time growth.

As a part of its future plans, the company aims to explore the segment of small merchants and retailers. The need for excess working capital in the segment has prompted the company for the same. 

80x Returns!

Bharatpe, which has had an incredible ride so far, currently has its valuation staring at approximately $900 million. To top that, the startup gave a profitable exit to 18 of its angel investors with 80 percent returns, thus turning the world's attention towards itself in just 2 years!

Further, the company also offered a tremendous return of about Rs 102 crore to its secondary investors against the return of Rs 1.9 crore, which was given to its initial round of investors. 

The company that does not have a single Chinese firm on its list of investors recently finished its series D valuation. Some of the major investors include big names like Sequoia Capital, Ribbit Capital, Steadview Capital Management, Beenext, Amplo and Insight partners. 

With all this on one side, 9 of its earlier investors have decided to stick with the company. They currently hold stocks worth 102 crores. Entrepreneur Kunal Shah happens to be one among them. Series D fund valuation, which was aimed at raising about $108 million, was oversubscribed. Hence the company resorted to the consolidation of Cap and opted for ESOP. 

Having all that said, the company is not officially a Unicorn. It has not yet crossed the 1 billion thresholds to fulfill the criteria of a unicorn and falls short by 100 million. But the company is not aiming to fetch any time soon either. When asked, the founders claimed that they are not yet ready to be a tiny fish in a huge pond, becoming an easy target. 

The Bottom Line

Yes, the hunt for the tag of "Unicorn" is postponed but it seems as if nothing can stop the mighty roar of the young startup which is already turning heads towards their direction. 

With the right talent and the perfect aim, BharatPe is on the road to achieving great heights. With a constantly growing user base and the right plans for expansion, we can expect a lot more from this financial startup in the days to come.