Payments and lending app for small merchants and kiranas BharatPe is now $100 million short of joining Paytm, BillDesk, Pine Labs, Razorpay, PhonePe, and others in the unicorn club of fintech companies in India. BharatPe’s valuation has jumped over 2X from around $400 million during its $75 million investment round in February last year to $900 million in its latest Series D fundraising of $108 million. While $90 million of the new investment came in primary funding, $18 million was raised by providing secondary exit to its angel investors and employees. The current round was led by existing investor US-based investment management firm Coatue Management while BharatPe’s other six existing investors including Ribbit Capital, Insight Partners, Steadview Capital, Beenext, Amplo, and Sequoia Capital also participated. The latest round took the company’s total equity and debt investment to $268 million.
“With the balance sheet well capitalized (more than $ 200 million in bank), we are now going to keep our heads down and deliver $3 billion TPV (total portfolio value) and build a loan book of $700 million with small merchants by March 2023,” said Ashneer Grover, Co-Founder and CEO, BharatPe. According to Grover, BharatPe’s payment business grew 5X, and the lending business scaled 10X in the last 12 months. BharatPe had announced $35 million in debt funding last month from Alteria Capital, InnoVen Capital, Trifecta Capital, and ICICI Bank. The company claimed to facilitate more than Rs 200 crores of loans to its merchant partners every month through its NBFC partners and had deployed over 50,000 point-of-sale machines that enable over Rs 900 crore of monthly transactions. BharatPe currently has a presence in 75 cities in India.
India’s digital lending market has grown from $33 billion in value in FY15 to $150 billion in FY20 and may hit the $350-billion mark by FY23, according to Statista. BharatPe’s lending business competes with the likes of Paytm, Capital Float, Indifi, Lendingkart, FlexiLoans, ZipLoan, Paisabazaar, and more. Importantly, the Reserve Bank of India had last month set-up a Working Group (WG) to study all aspects of digital lending activities in the regulated financial sector as well as by unregulated players amid growing concern around possibilities of digital lending-based financial frauds. The digital lending market has seen multiple platforms, majority startups, cropping up in the recent past across models including peer-to-peer, pay later, invoice financing, bank-led digital models, marketplaces, and more, adopted by consumers and enterprise-facing businesses.
In a written reply to a question in the Lok Sabha on Monday, Ministry of Finance MoS Anurag Singh Thakur said that the RBI got complaints against 1,509 digital lending applications including 1,019 unregistered or unregulated digital loan applications and 490 registered NBFCs engaged in digital lending. The central bank had cautioned small businesses and individuals in December 2020 against securing loans through unauthorised digital lending apps.