BharatPe Posts Highest-Ever Gross Revenue Of $23.5 Mn In August 

Fintech unicorn BharatPe reportedly clocked a record gross revenue of $23.5 Mn (about INR 195 Cr) in the month of August. This translates to an annualised revenue rate of $282 Mn (about INR 2,340 Cr).

The growth was attributed to enhanced revenue from lending business and the successful introduction of new initiatives, Moneycontrol reported citing internal documents. It must be noted that BharatPe launched Swipe Android, a PoS device that offers multiple modes for digital payment acceptance, including debit/credit cards, UPI, mobile wallets and QR codes, in August this year.

The company, which launched Linux-based PoS devices in 2020, has a network of over 2 Lakh PoS machines across 400+ cities in the country as of August 2023.

In October 2021, the consortium of Centrum Financial Services Limited (Centrum) and BharatPe, was granted a Small Finance Bank (SFB) licence by the Reserve Bank of India (RBI).

BharatPe also entered the Buy Now Pay Later (BNPL) segment with the launch of postpe in October 2021, which now has over 8 Mn downloads and an annualised total payment value (TPV) of over INR 5,000 Cr, as per the company.

Further, in January 2023, BharatPe Group received an in-principle nod from the Reserve Bank of India (RBI) to operate as an online payment aggregator. In May this year, BharatPe also completed the acquisition of a 51% stake in Trillion Loans, a non-banking financial company (NBFC) based in Mumbai.

BharatPe’s Many Troubles

The increase in gross revenue comes as a welcome relief for BharatPe, especially after it recorded a substantial loss in FY22. The company’s total loss skyrocketed 3.4X to 5,610.7 Cr in the financial year 2021-22 (FY22) from INR 1,619.2 Cr in FY21.

This increase was primarily due to a sharp rise in expenses related to the change in the fair value of compulsory convertible preference shares (CCPS). Nevertheless, its revenue from operations rose 283% to INR 456.8 Cr from INR 119 Cr in FY21, indicating sustained growth for the company.

High burn and rising expenditure have been a cause of concern for the fintech giant. Advertising and promotional expenses surged over 400% to INR 245.5 Cr, while employee benefit expenses increased 145% to INR 184.7 Cr from INR 75.4 Cr in FY21.

In the midst of these developments, the company has been embroiled in a highly publicised legal battle with its former managing director Ashneer Grover. BharatPe has filed a criminal complaint against Grover and his family with the Economic Offences Wing (EoW) on 17 charges, including alleged criminal breach of trust, document fabrication, and embezzlement.

Furthermore, Suhail Sameer resigned from the position of CEO of BharatPe, exacerbating the leadership crisis at the startup. The company has also seen an exodus of top level executives, including cofounder Bhavik Koladiya, founding members Satyam Nathani and Tanmay Sagar, over the last year or so. Most recently, Nishant Jain, who was a chief business officer at the unicorn, stepped down.

Looking ahead, BharatPe has set its sights on its initial public offering (IPO) and is committed to overcoming all challenges in its path toward profitability. However, a more formidable task lies in stabilising its leadership and controlling its expenditure by restructuring credit costs, reducing non-performing assets (NPAs), and scaling back marketing expenditures.

In 2018, BharatPe launched India’s first UPI interoperable QR code, the first zero MDR payment acceptance service. In 2020, post-Covid, BharatPe also launched a card acceptance terminal – BharatSwipe. Currently serving 1 Cr merchants, the company claims to be processing 300 Mn+ UPI transactions per month (annualised Transaction Processed Value of over $26 Bn in payments).

Last valued at $2.9 Bn, the fintech unicorn’s list of investors includes Tiger Global, Dragoneer Investment Group, Steadfast Capital, Coatue Management, Ribbit Capital, Insight Partners, Steadview Capital, Beenext, Amplo, and Sequoia Capital.