BharatPe earns the horn, triples valuation to $2.85bn after Tiger Global-led oversubscribed round

Merchant payments and financial services provider BharatPe raised $370m in a primary and secondary mix, as a part of a Series E funding round led by new investor New York-based Tiger Global Management.

Other new investors include Dragoneer Investment Group and Steadfast Capital, who also participated as a part of this round as well as existing investors Sequoia Capital, Insight Partners, Coatue Management, Amplo and Ribbit Capital.

The primary component of the round is $350m and a secondary component of $20m, to create a liquidity event for employees and angel investors in the company. This is the third liquidity event for BharatPe’s employees with vested options.

The startup was looking to raise $250m until inbound requests from investors prompted an oversubscription. The round makes BharatPe the latest entrant to India’s growing list of unicorn startups, with its valuation rising more than threefold to $2.85bn in six months. The company had raised $108m in February this year at a valuation of $900m.

BharatPe’s key business verticals include its merchant payments business, financing and financial services offerings to merchant partners. To make its merchant partners comfortable with accepting digital payments, BharatPe relies on QR codes and point of sale machines that support government-backed UPI payments infrastructure.

It has a presence in close to 140 cities and plans to increase its reach to 300 towns over the next two years. It also plans to take its deployment of point of sale devices from 100,000 at present to 400,000 over the next two fiscals. BharatPe has disbursed close to $300m in financing to merchant partners to date and has an outstanding loan book of $100m.

It plans to scale its overall financing to $3bn by March 2023 with an outstanding loan book of $1bn. The company aims to raise $700m in debt capital over the next two years to facilitate this credit growth. About $10bn in annual payment value is being processed on the BharatPe platform and the company looks to scale this to $30bn by 2023. In addition, BharatPe plans to double its merchant partners to 14 million by the end of fiscal year 2023.

On turning into a unicorn with the latest funding round, BharatPe co-founder Ashneer Grover said, “We now have $0.5bn cash on books and are extremely well capitalised to deliver on our mandate to build India’s first truly Digital Bank. Rarely does one witness the original thesis play out without any pivot.”

Ashneer affirmed that BharatPe would be solely focused on lending as its core business with small merchants as the primary target segment. BharatPe also announced that two executive-level changes. Ashneer has been elevated as co-founder & managing director from the earlier role of CEO. Suhail Sameer is the new CEO of the FinTech startup.

Ashneer will lead strategy, product, technology, capital among others. Suhail would be responsible for the overall business and P&L, merchant network expansion, monetisation, lending, banking foray and the brand. On the appointment of the new CEO, Ashneer said, “He has delivered during the last one year and his ability to lead from the front. I am also honoured to invite him to the Board of Directors.”

BharatPe recently acquired a multi-brand loyalty platform PAYBACK India to help its 7 million offline merchants roll out rewards and loyalty programmes for customers. This marked BharatPe’s entry into the consumer-facing segment, as it looks to launch ‘Buy Now Pay Later’ services on the PAYBACK platform.

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