Unpacking BharatPe’s latest round and ownership structure

Fintech firm BharatPe has emerged as one of the most active startups in terms of raising money in equity and as well as debt in 2021. The company recently announced its $370 million Series E round led by Tiger Global, making it the fifth most valued fintech unicorn in India after Paytm, PhonePe, Razorpay and Pine Labs. 

While the company did not disclose crucial details of the round, Fintrackr dug deep into its regulatory filings to uncover the funding breakup and new shareholding structure.

Split of BharatPe’s Series E funding round and its valuation

BharatPe has approved the allotment to raise Rs 2,607.4 crore or $350 million in its Series E round in which Tiger Global is investing around $100 million, with Sequoia, Coatue Management and Insight Partners pumping in $50 million each.

The remaining amount comes from Ribbit Capital, Ampolo, Dragoneer International and Steadview Capital which invested $25 million each. The company also said that it raised $20 million in secondary financing.

According to Fintrackr’s estimates, BharatPe has raised the fresh round at a post-money valuation of $2.9 billion

Current shareholding structure of BharatPe

Following the allotment of fresh shares, Sequoia has emerged as the largest stakeholder in BharatPe with 18.58% stake followed by Coatue, Ribbit, Grace Software Holding and Beenext which hold 11.76%, 10.66%, 9.22% and 9.06% stake respectively.

The company’s promoters -- Ashneer Grover and Shasvat Nakhrani -- have 8.76% and 7.23% stake respectively, or just about 16% stake together. Importantly, these estimations are based on the fillings available and do not take secondary transactions into account.

The complete shareholding structure can be seen below.

Detailed queries sent to BharatPe on Tuesday did not elicit a response until the publication of the story. We'll update the post in case they do.

BharatPe’s plans and its emphasis on lending

As per BharatPe, the new fundraise will be deployed to grow its existing business and capitalise on distressed Punjab and Maharashtra Co-operative (PMC) Bank, which it took over in its JV with Centrum. The partners had announced plans to infuse $300 million into the bank over the next two years, after approval from the RBI in June this year.

Lending appears to be the centre of BharatPe’s revenue model as margins in payments are wafer-thin. This is also apparent from BraratPe’s claim: disbursal of $300 million to its merchant partners to date and has an outstanding loan book of $100 million (via third parties). 

Besides lending to merchants, BharatPe forayed into consumer lending (via P2P model) with the launch of investment and borrowing app 12% Club. Through 12% Club, it claims to offer up to 12% interest annually for consumer investments and consumers can borrow up to Rs 10 lakh at an interest rate of 12%.

Back to back debt rounds 

Since the beginning of this year, Bharatpe has scooped up $478 million in equity. The Ashneer Grover led company has also raised over $60 million in debt during the period which includes the recent fundraise of Rs 200 crore or $27 million from IIFL Wealth & Asset Management and Northern Arc Capital. The company counts ICICI, Alteria Capital and Innoven Capital as its top lenders.

Last month, it passed a special resolution to raise to Rs 1,300 crore or $175 million in debt from certain investors for a period of one year. Entrackr had exclusively reported the development of BharatPe’s plan of raising debt funds on July 21.

The company has set a target to raise $700 million in debt over the next two years to facilitate its credit growth.