In the aftermath of regulatory constraints placed on Paytm’s payments bank arm by the Reserve Bank of India (RBI) on January 31, 2024. BharatPe, a prominent fintech player in India, has rapidly leveraged the unfolding situation to boost its business operations to unprecedented levels.
BharatPe’s merchant onboarding surge and city-wise growth dynamics
BharatPe’s strategic manoeuvres post the Paytm debacle have yielded remarkable results, with a staggering 77% surge in merchant onboarding in February 2024 compared to the previous month. The surge was accompanied by a notable increase of over 47% in website traffic for onboarding inquiries during the same period.
This surge in onboarding was not confined to specific geographical regions but exhibited widespread growth across different city tiers. Tier-I cities witnessed a substantial 76% rise in onboarding, followed closely by a 63% growth in Tier-II cities.
Impressively, Tier-III cities and beyond experienced an exceptional growth rate exceeding 83%, contributing significantly to BharatPe’s expanding merchant base, which surpassed 13 million by the end of February.
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Kirana stores transition and accelerated growth with incentives
A significant shift was observed in the preferences of Kirana stores, with over 42% reported to have migrated to alternative platforms like Mobikwik, BharatPe, PhonePe, and GooglePay. This transition was primarily driven by the need for continuity and reliability in UPI payments, as the uncertainty surrounding Paytm prompted cautious merchants to explore alternative solutions.
Previously holding approximately 69% market share among Kirana stores, Paytm’s decline created a vacuum that BharatPe and other platforms swiftly moved to fill.
During the first half of February, BharatPe experienced an exponential 100% increase in merchant sign-ups compared to the previous month. This growth was particularly pronounced in metro cities, which recorded a remarkable 104% increase, while Tier-2 and Tier-3 cities saw a commendable surge of 95%.
BharatPe’s proactive approach, boosted by additional features and offers such as free QR code setup, flat earnings of up to ₹300, and instant settlements, played a pivotal role in driving this accelerated growth trajectory.
Financial resilience, merchant lending success
BharatPe’s robust financial performance reflects its resilience and adaptability in navigating the competitive fintech landscape. The company’s loss narrowed significantly to ₹886 crores in FY23 from ₹5,594 crores in FY22, signalling a noteworthy improvement in operational efficiency. Moreover, the EBITDA loss declined by ₹158 crores in FY23, highlighting BharatPe’s commitment to sustainable growth strategies.
BharatPe’s success story extends beyond merchant onboarding, with its merchant lending business experiencing an impressive growth of 129 %, reaching ₹5,339 crore. Total loan disbursements amounting to approximately ₹12,400 crore further showcase BharatPe’s emergence as a key player in the fintech lending domain.
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Since its inception, BharatPe has garnered significant investor confidence, securing over $583 million in equity from diverse investors.
Partnerships with Peak XV Partners, Ribbit Capital, Insight Partners, Amplo, Beenext, Coatue Management, Dragoneer Investment Group, Steadfast Capital, Steadview Capital, and Tiger Global have not only provided crucial financial backing but also validated BharatPe’s growth trajectory and market potential.
Conclusion
BharatPe’s impressive growth in merchant acquisition and strong financial performance, despite Paytm’s regulatory issues, highlights its adaptability, resilience, and strategic vision.
As BharatPe continues to consolidate its position in the Indian fintech landscape, its focus on innovation, customer-centricity, and strategic partnerships will drive sustained growth and market leadership in the foreseeable future.
