Introduction
In India’s rapidly growing fintech industry, one company has redefined how small merchants and businesses manage digital payments—BharatPe. Founded in 2018 by Ashneer Grover and Shashvat Nakrani, BharatPe quickly rose to prominence as a QR code payment app designed to empower small kirana stores and offline merchants. At a time when digital payments were gaining momentum in urban India, BharatPe revolutionized the market by offering a seamless, no-cost solution for merchants to accept payments from a variety of platforms through a single interoperable QR code.
Despite the volatile fintech space and fierce competition from established players like Google Pay, PhonePe, and Paytm, BharatPe’s innovation and tenacity allowed it to scale rapidly, helping over 24 lakh merchants by 2021. What started as a simple QR code-based solution eventually transformed into a multi-faceted fintech powerhouse offering loans, POS systems, and a unique consumer lending platform. This is the story of how BharatPe overcame leadership challenges, pioneered innovations, and became a unicorn in less than four years.
The Challenge: Creating a Simple Payment Solution
India’s fintech landscape in 2018 was brimming with opportunities, but it also presented significant hurdles for small businesses and merchants. Digital payment adoption was growing exponentially, but most small retailers were bogged down by the complex ecosystem of QR codes. Merchants had to manage multiple QR codes from different providers—Google Pay, Paytm, PhonePe—which resulted in operational inefficiencies and reluctance to embrace digital payments fully.
BharatPe saw an opportunity in this chaos. Its solution: a single, interoperable QR code that allowed merchants to accept payments from any UPI-based app without paying transaction fees. This innovation was a game-changer, especially for India’s unorganized retail sector, where profit margins are often razor-thin. BharatPe’s ability to simplify digital payments quickly attracted millions of merchants across the country, fueling its rapid growth in a competitive market.
The Journey: Empowering the Indian Merchant
BharatPe wasn’t just another fintech company—it was a mission-driven startup focused on financial inclusion. Ashneer Grover and Shashvat Nakrani envisioned a future where even the smallest merchants, often left out of the digital revolution, could participate in the country’s fast-growing digital economy. The duo recognized that small merchants faced two primary barriers: the cost of digital transactions and access to capital.
By offering no-cost digital payments and seamless integration with existing UPI systems, BharatPe removed the first barrier. The next step was to address the credit needs of these small businesses. Many small merchants lack the formal documentation and credit history necessary to secure loans from traditional banks. BharatPe filled this gap by using transaction data to assess creditworthiness and offering small business loans, which became a cornerstone of the company’s growth strategy.
Overcoming Obstacles: Controversy and Leadership Challenges
BharatPe’s success story was not without turbulence. The company hit a major roadblock when co-founder Ashneer Grover became embroiled in controversy. Allegations of financial misconduct and a toxic work environment under Grover’s leadership cast a shadow over the company in early 2022. The board of BharatPe eventually asked Grover to take a leave of absence, and his subsequent resignation in February 2022 marked a turning point for the company.
While Grover was a key figure in BharatPe’s rise, his exit raised concerns about the future direction of the startup. His departure created leadership gaps, and the company faced intense media scrutiny over its internal culture. However, BharatPe’s other co-founder, Shashvat Nakrani, along with CEO Suhail Sameer, stepped up to steer the company through this difficult period. They maintained the focus on BharatPe’s core offerings and managed to retain investor confidence, ensuring that the fintech company continued to grow despite the leadership crisis.
The leadership transition also led to internal evaluations of the company’s culture and operations. The departure of Madhuri Jain Grover, who headed Controls at BharatPe and was also implicated in the financial irregularities, was another significant event. BharatPe’s leadership had to work hard to regain the trust of its employees, partners, and customers. Yet, they succeeded in maintaining their momentum, highlighting the resilience of the company and its leadership.
Achievements and Innovations: BharatSwipe and Beyond
BharatPe’s innovations have played a critical role in its transformation. In 2020, the company introduced BharatSwipe, a POS (Point of Sale) machine with zero rental fees. This was another revolutionary move that distinguished BharatPe from its competitors in the payments ecosystem. BharatSwipe allowed merchants to accept card payments without worrying about high rental costs, which were a significant burden for small businesses. Within a year, BharatSwipe had gained massive popularity, with over 1.25 lakh machines deployed across 250 cities.
But BharatPe didn’t stop there. The company further diversified its offerings by launching the 12% Club in 2021—a peer-to-peer lending and investment platform. The 12% Club allowed users to invest their savings and borrow money at a flat 12% interest rate. The platform became a significant success, tapping into a new consumer base and expanding BharatPe’s footprint beyond just merchants. By the end of 2021, BharatPe had disbursed over $300 million in loans, a testament to its rapid scaling in the lending space.
The Valuation Leap: Achieving Unicorn Status
BharatPe’s journey to unicorn status was marked by its ability to scale quickly while maintaining a laser focus on its core mission of financial inclusion. In August 2021, BharatPe raised $370 million in a Series E funding round led by Tiger Global, pushing its valuation to $2.85 billion. This incredible leap in valuation occurred in just six months, showcasing the immense confidence investors had in the startup’s growth potential.
Becoming a unicorn was not just about hitting a financial milestone—it was a validation of BharatPe’s business model, which combined payment solutions with small business lending. The company’s ability to provide affordable credit to small businesses, particularly during a time when many were struggling due to the economic impact of the COVID-19 pandemic, reinforced BharatPe’s value proposition.
Even after Grover’s controversial exit, BharatPe continued to thrive. By 2023, the company had its first profitable month, with annual revenue crossing Rs 1,500 crore, a 30% growth from FY23. The fintech unicorn had successfully navigated one of the most challenging periods in its history, emerging stronger and more focused on expanding its offerings and reach.
Timeline of Key Events
- March 2018: BharatPe is founded by Ashneer Grover and Shashvat Nakrani with a vision to simplify digital payments for small merchants.
- 2020: BharatPe launches BharatSwipe, a POS machine with zero rental fees, gaining traction across India’s merchant community.
- 2021: The 12% Club is introduced, expanding BharatPe’s reach into peer-to-peer lending and consumer investment.
- August 2021: BharatPe achieves unicorn status with a $2.85 billion valuation after a Series E funding round.
- February 2022: Ashneer Grover resigns amid controversy, leading to a restructuring of the company’s leadership.
- October 2023: BharatPe records its first profitable month with annual revenue exceeding Rs 1,500 crore.
Key Takeaways
BharatPe’s transformation from a QR code payment app to a fintech unicorn is a testament to its innovative approach, resilience, and commitment to solving real problems for India’s small businesses. The company’s key to success was its ability to identify a gap in the digital payments ecosystem and provide a simple, no-cost solution that addressed the pain points of merchants.
Through continuous innovation, such as BharatSwipe and the 12% Club, BharatPe diversified its offerings, ensuring its relevance in an ever-changing market. Leadership challenges, particularly the departure of Ashneer Grover, tested the company’s resolve, but BharatPe emerged stronger, with a renewed focus on growth and financial inclusion.
For budding entrepreneurs and fintech startups, BharatPe’s story offers critical lessons in identifying customer pain points, innovating with purpose, and maintaining resilience in the face of adversity. As BharatPe continues to expand its offerings and footprint, it remains a shining example of how fintech can transform the landscape for small businesses in India.
