Digital payments and lending startup BharatPe is inching closer to becoming a unicorn. The New Delhi-based startup has raised about USD 108 million in Series D round led by existing backer Coatue Management at a valuation of USD 900 million.
The latest investment deal, which entails the primary infusion of USD 90 million and USD 18 million in secondary funding, saw most of its angel investors exiting, a report by local media Mint said. BharatPe’s other existing backers including Ribbit Capital, Insight Partners, Steadview Capital, Beenext, Amplo, and Sequoia Capital also participated in this round.
The three-year-old startup had attracted USD 75 million in its Series C funding last year in February at a valuation of USD 425 million. Just last month, it raised USD 8.2 million in debt funding from InnoVen Capital, a Temasek-backed venture debt firm.
BharatPe seems to be eyeing another USD 100 million check after March to beef up its credit offerings.
“We will continue to focus on our plans with this fund-raise, and continue deepening the credit ecosystem for our merchants,” Ashneer Grover, co-founder and chief executive officer, BharatPe, told Mint. “We are clear that we want to stay aligned with categories in financial services that will provide us margins, contributing to our growth.”
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BharatPe, which has already raised USD 35 million from venture debt firms Alteria Capital, Trifecta Capital, and InnoVen, is also aiming to raise USD 200 million debt from banks and other institutions this year, Grover added. Overall, the company plans to raise close to USD 500 million in debt by the financial year 2023.
Founded by Ashneer Grover and Shashvat Nakrani in 2018, roughly two years after Unified Payments Interface (UPI), a government-backed payment mechanism for bank-to-bank transfers, was launched, the startup became a success in a short span of time by targeting small offline merchants.
Playing smart, it launched an interoperable QR code that could be used by retailers for free to receive payment from any UPI-enabled app. Most of the merchants who were juggling with a multitude of payments services—PhonePe, Paytm, Google Pay, Amazon Pay, and government-backed BHIM, among others—opted for BharatPe, since it made the payment process far simpler for them.
On the face of it, BharatPe seems like a collaborator that works with merchants and digital payment services to facilitate UPI transactions. However, it has since emerged as one of the most aggressive rivals for the big-wigs like SoftBank-backed Paytm, Walmart-owned PhonePe, Amazon Pay, and Google Play.
While other payment companies have been shifting their focus from peer-to-peer transactions to peer-to-merchant transactions over the past two years, BharatPe, which started with focus on offline merchants, is already eating their lunch. Payment companies are wooing merchants in the hopes of cross-selling financial services such as loans and short-term credit.
Other than loans, BharatPe offers merchants a digital ledger service to record their cash and credit sales and keep track of money payable to suppliers, among other things.
Since last year, the company has been adding new offerings in its product portfolios including point-of-sale card terminals called BharatSwipe, which aims to clock USD 1.5 billion in total payment value (TPV) run rate. It is in process of scaling this product to 100 cities by the end of FY23 from the current 10 cities, the report said.
The company will also target the secured loans segment and provide merchants with loans against gold and property while diversifying into newer segments such as automobile loans, it added.
At present, the company claims to have six million merchants across 75 cities on its platform and processes over USD 7 billion in annualized total payment value on UPI.