BharatPe – Company Overview
BharatPe was founded in 2018 by Ashneer Grover and Shashvat Nakrani to help small merchants and businesses accept digital payments in India. Headquartered in New Delhi, BharatPe provides a single interface for all existing UPI apps and POS machines that merchants can use to accept payments.
BharatPe – Founders and Team
The company was co-founded by Ashneer Grover and Shashvat Nakrani. Ashneer Grover is the CEO and manages operations. Shashvat Nakrani is the CTO and heads technology. The founding team also includes Bhavik Koladiya who heads product and technology. Key investors and board members include Rajnish Kumar, former SBI chairman, and Vijay Shekhar Sharma, founder of Paytm.
BharatPe – Mission and Vision
BharatPe aims to empower small merchants and kirana store owners with digital payments acceptance through their app and POS solutions. Their vision is to make digital payments accessible even in the remotest parts of India.
BharatPe – Industry
BharatPe operates in the digital payments industry in India. It competes with other payment gateway and POS machine providers like Paytm, PhonePe, MSwipe, and Ezetap.
BharatPe – Products and Features
Key products and services offered by BharatPe include:
- BharatPe Mobile App – To accept UPI payments from customers
- BharatSwipe Card Machine – POS machine to accept card payments
- Business Dashboard – Manage all transactions and generate reports
- Zero MDR on payments – Merchants get full amount without deductions
- Merchant lending – Credit solutions for working capital
BharatPe – Business Model
BharatPe works on a merchant-focused business model. The main revenue streams are:
- Transaction fees – Charges a small percentage as fee on payments processed through their POS and app.
- Merchant lending – Offers working capital loans and advances to merchants at competitive rates. Earns through interest spread.
- Advertisement revenue – Earns fees by selling advertisement space to brands on their merchant app.
BharatPe – Revenue Model
BharatPe primarily earns through three revenue streams:
- Transaction processing charges and convenience fees
- Interest earned on merchant loans and advances
- Advertising fees from brands
Additional revenue also comes from sign-up bonus from new merchants and equity funding.
BharatPe – Shareholding
BharatPe is backed by top investors and has a post-money valuation of $2.85 billion as of 2022. Key investors include:
- Coatue Management – $108 million
- Ribbit Capital – $50 million
- Steadview Capital – $75 million
- Beenext – $19.4 million
- Sequoia Capital – $15.5 million
- Insight Partners – $50 million
Co-founders Ashneer Grover and Shashvat Nakrani own nearly 10% shares each.
BharatPe – Funding
Since 2018, BharatPe has raised over $650 million in 8 funding rounds from marquee investors.
Key highlights:
- Raised $370 million in Series E in 2021
- Raised $75 million in Series C led by Ribbit Capital and Steadview Capital in 2019
- Tiger Global invested $50 million in Series B in 2019
BharatPe – Partnerships
Strategic partnerships play a key role in BharatPe’s growth. Key partnerships include:
- Banks like ICICI and SBM to expand lending
- POS machine manufacturers like PAX and Benow for card acceptance
- Fossil for BharatPe-Fossil smartwatches with POS capabilities
- OLA for digital payments for cab rides
BharatPe – Growth
Some key metrics demonstrating BharatPe’s growth:
- Processes over 10 million UPI transactions per month
- Serves over 10 million small merchants and half a million kirana stores
- Raised $650 million and grown valuation to $2.85 billion in 4 years
- Expanded operations from 6 to over 140 cities in India
BharatPe – Competitive Strategy
BharatPe uses the following competitive strategies:
- Zero MDR fees – Helps attract merchants with no deductions on payments
- POS machine network – Large deployment of POS machines across small towns
- Aggregator model – Unified payments interface across all UPI apps
- Merchant lending – Credit solutions help drive merchant loyalty
- Referral rewards – Cashback and incentives for new merchant sign-ups
BharatPe – Competitors
Major competitors of BharatPe include:
- Paytm – Leading digital wallet and payments company in India
- PhonePe – Digital payments app backed by Flipkart
- MSwipe – POS and card machine provider
- Ezetap – Payment services targeting SMEs and startups
- Amazon Pay – Digital wallet by ecommerce giant
BharatPe – SWOT Analysis
Strengths
- Zero MDR and full merchant payouts
- POS machine network across small towns
- Strong merchant onboarding and acquisition
Weaknesses
- Limited customer awareness in tier 2/3 towns
- Merchant defaults on loans can impact revenues
Opportunities
- Growing digital payments market in India
- Untapped small business demand for credit
- Strategic partnerships for growth
Threats
- Intense competition from Paytm, PhonePe, Amazon Pay
- Ambiguity in UPI transaction fee model
- POS machine operational issues and costs
BharatPe – Marketing Strategy
BharatPe uses the following marketing strategies:
- Referral rewards – Cashbacks for new merchant signups
- Brand ambassador – Hired Salman Khan as brand ambassador
- TV and print ads – Features ads targeting small merchants
- Social media – Strong engagement on Facebook and Instagram
- POS branding – BharatPe logo on POS machines for visibility
- Merchant testimonials – Build trust by featuring real merchant stories
BharatPe – Advertisements and Social Media Campaigns
Some popular campaigns by BharatPe include:
- “India ka Naya Dukandaar” campaign during IPL 2020
- Viral ad campaigns featuring Ashneer Grover
- Merchant testimonial ads focused on small towns
- Referral program ads incentivizing new sign ups
- Social media contests like PehleKamaoPhirUdaao
BharatPe – Innovations and Initiatives
Some innovative products and initiatives by BharatPe include:
- BharatSwipe Card Machines for contactless payments
- 12% Club App for merchant loyalty programs
- Gold loan service in partnership with RBI-approved NBFCs
- Launch of sachet loans for micro-finance
- WhatsApp Chatbot for merchant onboarding
- QR Code payments for merchants
BharatPe – Awards and Recognitions
Key awards won by BharatPe:
- ‘Best Fintech Startup’ at ET Startup Awards 2018
- ‘Emerging Company of the Year’ at ET Startup Awards 2019
- ‘Best Digital Payments Service’ at IAMAI’s India Digital Awards 2018
- ‘Most Promising Brand’ by The Economic Times Best Brands 2019
BharatPe – Investments
BharatPe has made strategic investments in the following fintech startups:
- PAYBACK India – to launch payment service PAYBACK Pay
- Unity Small Finance Bank – $60 million for 10% stake
- BOFA – invested $4.5 million in Bank of Future (BOFA)
- Paytm – invested $19.6 million in Vijay Shekhar Sharma’s Paytm
BharatPe – Mergers and Acquisitions
BharatPe has acquired the following companies:
- PAYBACK India from American Express – Acquired in 2018
- Multipl – Loyalty platform acquired in 2021 to boost merchant offerings
BharatPe – Controversies
BharatPe has seen some controversies recently such as:
- Allegations of wrongdoing and financial irregularities against Ashneer Grover
- Ashneer Grover resignation after public spat with investors
- Corporate governance issues raised by investors
However, BharatPe aims to move past the issues by strengthening corporate governance and management.
BharatPe – Challenges Faced
Some key challenges faced by BharatPe:
- Intense competition in digital payments space in India
- Merchant acquisition in remote towns with low digital literacy
- Maintaining POS machine uptime and service quality
- Loan defaults and provisions affecting revenue
- Compliance requirements and regulatory changes
BharatPe – Future Plans & Aspirations
BharatPe aims to continue its rapid growth and emerge as a top player in digital payments in India. Some future plans and aspirations include:
- Expand merchant network to over 25 million by 2025
- Launch more lending and credit products for merchants
- Enhance POS machine capabilities with value-added services
- Expand partnerships with banks, NBFCs and brands
- Explore international expansion in SE Asia and Gulf countries
- Pursue a potential IPO in the next 3-5 years
- Invest in new fintech startups synergistic to offerings
- Roll out personalized merchant services using data analytics
BharatPe aims to make digital payments accessible to the smallest merchants and empower them with loans and credit. The company has ambitious plans for growth despite recent challenges. With the vast growth potential in India’s digital economy, BharatPe looks to play a pivotal role in financial inclusion.
FAQs About BharatPe Business Model
What is Unique about the BharatPe?
BharatPe provides a super-app for merchants to accept payments from all UPI apps like Paytm, PhonePe, Google Pay, etc. in one single interface. Zero MDR fees, lending services, and nationwide POS machine network make BharatPe’s offerings unique.
How Does BharatPe Work?
Merchants can download the BharatPe app and start accepting UPI payments instantly. They can also opt for the BharatSwipe card machines for contactless transactions. The app aggregates payments across all UPI apps and settlements happen directly into the merchant’s bank account.
How Does the BharatPe Make Money?
BharatPe mainly makes money through transaction fees, merchant lending activities, and advertising/referral revenues. They also earn through POS machine rentals, subscription plans, and convenience fees.
Will the BharatPe be profitable?
While currently loss-making, BharatPe aims to turn profitable in the next 2-3 years. With its merchant-focused model and innovative offerings, BharatPe looks well-poised to tap into the huge growth potential of digital payments in India. Profitability will be driven by scale, merchant lending, and new offerings.
How does BharatPe earn money?
BharatPe earns money through transaction fees, interest on merchant loans, POS machine rentals, subscriptions, advertising/referral revenues, and convenience fees.
What is the source of revenue of BharatPe?
The main revenue sources for BharatPe are transaction processing charges, interest income on merchant loans, and advertising/referral fees. Additional revenues come from POS rentals, subscriptions, and convenience fees.
What is the technology behind BharatPe?
BharatPe uses a robust API integration technology to connect its platform to all major UPI apps like Paytm, PhonePe, Google Pay, etc. It also uses POS machine integration, QR code technology, and data analytics.
What is BharatPe model?
BharatPe works on a B2B model focused on serving merchants. It aims to empower small businesses with digital payments and lending services.
Did Ashneer Grover get money from BharatPe?
Yes, as co-founder and shareholder, Ashneer Grover received funds from BharatPe’s fundraising and owns equity worth around $130 million.
What percentage of BharatPe is owned by Ashneer Grover?
Ashneer Grover owns around 9-10% stake in BharatPe.
Why is BharatPe so successful?
BharatPe gained success due to zero MDR fees, UPI integration, nationwide POS network, merchant lending, effective marketing, and focus on small merchants.
Who is the owner of BharatPe?
The co-founders Ashneer Grover and Shashvat Nakrani are the main owners and shareholders of BharatPe. Investors like Sequoia and Ribbit Capital also own stakes.
Who is the first owner of BharatPe?
Ashneer Grover and Shashvat Nakrani were the first and original founders and owners of BharatPe.
Who are the competitors of BharatPe?
Major competitors are Paytm, PhonePe, Amazon Pay, MSwipe, Ezetap, Pine Labs, etc.
What is the difference between PhonePe and BharatPe business model?
PhonePe focuses on consumer payments while BharatPe focuses specifically on empowering merchants and small businesses.
Is BharatPe a successful company?
Yes, BharatPe has seen tremendous growth and success in a short span to become a leading player in merchant payments and lending.
What is the main company of BharatPe?
BharatPe Pvt Ltd is the main company under which BharatPe operates and provides all its services and offerings.
