BharatPe Business Model: Funding, Valuation & Success Story

BharatPe is a one-stop shop for digital payments. As per BharatPe co-founder Shashvat Nakrani, the idea of building an app like BharatPe was focused on the solving the challenge faced by merchants/SMEs to accept digital payments without losing out on margins. As no payment gateway was charging less than 1% of commission, Shashvat Nakrani who was working on a startup idea in 2017-18 decided to leverage UPI to build a digital payments solution that would remove all charges on receiving payments, build a network of merchants, and monetize through other financial products.

Most companies were following a closed ecosystem at that time, so merchants had to install different QR codes for receiving payments through different payment gateways. But BharatPe leveraged on key feature of UPI – interoperability. This helped merchants as they now needed only one QR code to receive payments from all Government backed payment gateways and that too without any transaction fees.

Suggested Read: Case Study – BharatPe

So, How Does BharatPe Earn?

A big question that surrounds BharatPe is that if it allows free transactions, then how does it earn? The co-founder and CEO of BharatPe, Ashneer Grover had an observation while working with different banking and investment firms. He noticed that since margins were low in retail, local merchants or shopkeepers were not ready to pay for services such as digital payments. But they were ready to pay interest on loans for expanding their business. However, it was tough for them to borrow loans from banks due to great deal of paperwork.

With its unique business plan, BharatPe decided to tap into this gap and offer loans to merchants or local shopkeepers for generating revenue.

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The Growth Of BharatPe

BharatPe commercially launched its QR Code in August 2018 and started lending loans six months after that. For loan disbursal, it partnered with financial companies or peer-to-peer NBFCs such as LiquiLoans and LenDenClub. Since its launch, BharatPe has seen immense growth and has become 19^th startup to enter the list of Unicorn startups in 2021.

BharatPe now offers multiple products to merchants. Here is a brief insight into the products offered by BharatPe:

BharatPe Solutions

BharatPe Swipe: BharatPe Swipe is a QR based Point Of Sale (POS) machine that allows the merchants to accept digital payments from multiple payment gateways or mobile apps such as PayTm, WhatsApp, Mobikwik, Amazon Pay, Google Pay, BHIM, and Freecharge. BharatPe solved two major problems of merchants:

• They do not need to install multiple QR codes for different mobile apps, as BharatPe QR code offers interoperability and allows them to accept payments from different apps via single QR code.
• BharatPe Swipe can be installed free of cost and does not charge a commission for transactions. Thus, merchants are not required to pay commission out of their margins.
• The payments are directly transferred to the bank account of merchants the same day.
• There is no daily or monthly limit on transactions.
• BharatPe has a streamlined payment system that minimizes technology-related issues.

These benefits resulted in a rise of BharatPe users resulting in more than 10,000,000 downloads from Google Play till date.

BharatPe Loans: BharatPe offers unsecured loans to SME merchants. The loan amount disbursed by BharatPe ranges between INR 20,000 to 7 lakh. The loan tenure is up to 12 months with an interest rate of 2% per month. Till date, BharatPe processes loans worth INR 3 Crore each month. BharatPe allows merchants to pay back loan in easy daily installments. Instead of requiring merchants to make daily payments, BharatPe deducts the installment amount from QR transactions amount before bank settlement each day. Owing to this method BharatPe has a repayment rate of 96%.

BharatPe Credit: BharatPe launched a credit line on XraIncome Card. The card has been renamed as BharatPe Card. This card can be used by merchants to draw credit worth INR 25,000. The credit card offers 30 day interest free benefit to the merchants along with 1% cash back on every transaction. BharatPe card can be used as either a debit or a credit card.

The Journey To Become A Unicorn Startup

After being launched in August 2018, BharatPe has come a long way and got listed in the list of Unicorn startups in August 2021. Till date, BharatPe has raised approximately $660.3M in over 8 rounds of funding. After its latest funding round on August 4, 2021 BharatPe has reached a valuation of $2.85 billion; thus, becoming a unicorn startup.

Here is a complete account of BharatPe funding:

• Seed Funding Round: The seed funding round of BharatPe was announced on October 1, 2018. The funding round involved 6 investors and generated $2M. The lead investors of this funding round were Beenext Capital and Sequoia Capital India.
• Series A Funding Round: Series A funding round of BharatPe, announced on February 21, 2019, involved 4 investors. The funding round generated $14.5M with Sequoia Capital India, Insight Partners, and Beenext Capital being the lead investors.
• Series B Funding Round: BharatPe announced its Series B funding round on June 4, 2019. The funding round had 5 investors and generated $50M. Series B investors were Ribbit Capital, Steadview Capital, Sequoia Capital India, Insight Partners, and Beenext Capital.
• Series C Funding Round: Series C BharatPe funding round was announced on February 24, 2020. It generated $75M and Coatue Management was lead investor. Other investors of this funding round of BharatPe were Ribbit Capital, Amplo VC, Insight Partners, and Steadview Capital.
• Debt Financing: On January 6, 2021, BharatPe announced its debt financing round and generated $2.5B with 4 investors. Lead investors of debt financing round of BharatPe were Alteria Capital, Innoven Capital, and Trifecta Capital Adisors.
• Series D Funding Round: Series D funding round was announced on February 11, 2021 by BharatPe. The funding round witnessed investments by 7 investors with Coatue Management being the lead investor. The funding round generated $108M.
• Debt Financing: On May 10, 2021, BharatPe announced second round of debt funding. Northern Arc was the sole investor in this funding round and it generated funds worth $500M.
• Series E Funding Round: BharatPe announced Series E funding round on August 4, 2021 and generated $350M which led it into Unicorn startups list. The funding round involved 8 investors with Tiger Global Management being the lead investor.
• Secondary Market: On August 4, 2021, BharatPe also announced a secondary market funding which generated $20M for the company.

Features Of BharatPe App

If you are also intrigued by the success of BharatPe app, here are some features that make BharatPe app popular:

• User Panel: BharatPe offers a powerful user panel that allows easy registration, login, bank account linking, credit card/debit card linking, and wallet. It also provide news about latest offers, cashbacks, gift cards, and bill payments with built in live chat feature.
• Merchandise Panel: The merchandise panel of BharatPe app allows easy registration, login, bank account linking, accept payment option, QR code generation, and chat support.
• Admin Panel: The admin panel of BharatPe allows complete control with analytical tools, geo-location tracker, content management, user management, and growth analytical tools. It also allows the admin to push notifications, offers, and deals.

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How Much Does It Cost To Build App Like BharatPe?

The development cost of app like BharatPe depends upon the location of development company, panels and features of app, UI/UX of the app, and supporting platforms. Depending upon the mentioned factors, the cost may range from $200-$250 in US and $40-$60 per hourly basis in Asian countries. Code Brew Labs offers an affordable solution to build app like BharatPe. The mobile app development company offers ready-to-use base solution to build BharatPe clone which can be customized to suit your business needs. Let’s connect now!