BharatPe : the who, the what and the how.
[Written by: Alfiya Ahmed]
BharatPe is the brainchild of Ashneer Grover and Sashvat Nakran and is an Indian fintech company that offers a range of fintech products including interoperable QR codes for UPI payments, Bharat Swipe for card acceptance, and small business financing. The firm was founded in 2018 and facilitates small merchants to accept payments via Unified Payments Interface for free, through BharatPe QR codes. The other product includes a peer to peer lending product called 12% Club and Digital Gold, which allows the users to transact for 24-carat gold containing 99.5% purity.
Money matters: how they make it and where it comes from?
In June 2021, BharatPe acquired Payback India from American Express and ICICI Investments Strategic Fund. The same month, the Reserve Bank of India issued in-principle approval to Centrum Financial Services Limited to establish a small finance bank with BharatPe. In 2020 the e-wallet firm was looking to close the year at Rs 35,000 crore in annual total payment value while expecting the total merchants on the platform to increase from four million to six million by the end of the coming fiscal year.
BharatPe funding had raised a total amount of $720 Million in over 12 rounds it has witnessed and in 2021 had set to raise Rs 1,300 crores in debt, which seems to be the largest debt round for an Indian startup.
BharatPe has raised an investment of $370 million from Tiger Global Management LLC along with other existing investors like Dragoneer Investment Group, etc. With this, the fintech startup’s valuation has catapulted to $2.85 billion, thereby becoming the 19th unicorn of 2021.
The BharatPe news and recent studies say that the company is growing rapidly and presently it’s the 4th largest player in the UPI portion and is in the 3rd spot in the private POS category.
Allegations and Controversies: when the mask falls off
The journey for BharatPe has not been all positive with major challenges and controversies that the company has had to face in the last two years.
The employees of BharatPe distributed pamphlets information related to the fact that only BharatPe was completely “Indian” while other companies were not nationalistic to compromise the reputation of competitors and garner more support and users for themselves. The competitors responded with lawsuits and also approached the Reserve Bank of India to stop such activities by BharatPe.
The Directorate General of Goods and Services Tax Intelligence (DGGI) scrutinised the financial data of BharatPe. The company, which was fined by DCGI in October 2021, was fined again for an amount close to Rs 1.5 crores because of the reports that state that the company has generated invoices for non-existent vendors. BharatPe has to deposit Rs 12.5 crores in total.
BharatPe co-founder Ashneer Grover himself has been embroiled in controversy since an audio clip that is alleged of him abusing an employee of Kotak Mahindra Bank was leaked online in January and Fintech company on March 2 removed the co-founder from all positions of the company, accusing his family of extensively misappropriating the company’s funds. Madhuri Jain Grover, the wife of Mr Grover and head of controls at BharatPe, was sacked from the fintech company on allegations of misappropriation of funds. She was accused of using company money for family trips abroad and for paying her staff.
After the fintech company announced its plans for disbursing gold loans to merchants. The ex-MD Ashneer Grover has again targeted the current CEO, Suhail Sameer, claiming that the idea of launching the gold loans vertical was his and it was Sameer who is credited for the same.
What happens next?
Among the vast sea of controversies and problems, BharatPe has been dragged through every imaginable situation and its future is questionable at this point.
Reports indicate that hundreds of employees are already looking for a way out.
There’s also the Unity Small Finance Bank which could also be in jeopardy as SEBI and RBI could revoke the license in case Grover or other BharatPe directors come under investigation.
After the removal of Ashneer Grover, the company is now left with just one founder and with many holes to fill that and even as BharatPe is looking to distance itself from Grover, the former cofounder will not go down without a fight
With BharatPe engrossed in solving its internal issues, the competition majorly upped their game making the playing field even tougher and so the fintech company needs to get back on track and focus on recovering what was lost.
