India's BharatPe achieves $2.8b valuation on $370m Series E

Barely a week ago, OfBusiness became the 18th Indian start-up to surpass $1 billion in valuation this year, taking the overall total to 54. It underscores a surge in early and growth-stage technology investment, with more than $20 billion put to work so far in 2021, more than double the 12-month figure for 2020. Expectations of more domestic IPOs are a key contributing factor.

More than half the capital deployed in the sector this year has gone into growth deals. Tiger is among the most prolific participants. AVCJ Research has records of the firm participating in 17 transactions of $100 million or more.

Its individual contribution to the latest BharatPe round was $100 million, Mint reported, in a story referenced by BharatPe in a LinkedIn post. Dragoneer Investment Group and Steadfast Capital each put in $25 million, with additional commitments from existing investors Sequoia Capital India, Insight Partners, Coatue Management, Amplo, and Ribbit Capital.

The round included a $20 million secondary portion, creating a liquidity event for employees and angel investors.

BharatPe closed its $108 million Series D as recently as February at a valuation of $900 million. Coatue led that deal with participation from Ribbit, Insight, Steadview Capital, Beenext, Amplo, and Sequoia. Total funding is now around $640 million. Beenext and Sequoia were the first institutional backers in 2018, while InnoVen Capital and Trifecta provided debt funding earlier this year.

“Our initial plan was to raise $250 million. However, the round was heavily oversubscribed. We believe that the $350 million primary raise will give us enough runway for the next three years, after which we may look at listing in the public markets. We still have cash in the bank from our Series C and D rounds and an overall liquidity runway of $500 million,” co-founder Ashneer Grover told Mint.

Grover has assumed the role of managing director with responsibility for strategy, technology and product development, as well as capital raising. Suhail Sameer, formerly group president, has become CEO. He will drive monetization efforts and a push into banking through a recapitalization of Punjab & Maharashtra Co-operative (PMC) Bank in conjunction with Centrum Financial Services.

Established in 2018, BharatPe’s core business involves providing merchants with a QR code system compatible with any payment app using the government’s Unified Payments Interface (UPI) infrastructure. Payments transacted via UPI are free, while merchants have the option to earn interest on those payments and take out loans.

More recent initiatives include the acquisition of Payback India, a multi-brand loyalty platform, from American Express and a strategic investment fund under ICICI. This will extend the service offering to merchants to include reward and loyalty programs, while enabling BharatPe to enter the consumer lending space.

As of June, the company was serving more than five million merchants across 65 cities. It claimed to be processing $7 billion in transactions on an annualized basis, with $2 billion of that coming from a point-of-sale device business launched just three months earlier. By 2023, BharatPe expects to have 400,000 devices in operation.

On the lending side, nearly $300 million has been disbursed to merchant partners to date and the company has $100 million in outstanding loans.

Also in June, BharatPe and Centrum Financial Services, a non-banking finance company (NBFC) under local financial services player Centrum Group, received in-principle approval from the Reserve Bank of India to create a small finance bank. The plan is to amalgamate PMC into this entity.

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• Topics
• South Asia
• Financials
• Expansion
• Technology
• India
• Financial Services
• NBFCs
• Tiger Global Management
• Sequoia Capital
• Coatue Management
• Insight Partners
• Dragoneer Investment Group
• Growth capital
• Fintech