BharatPe had last raised a major equity round in 2021 when it had achieved the valuation of $3 billion. However, this round is being negotiated at a lower valuation, the sources said.
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This comes even as the exodus of top-level talent from the company continues.
Nishant Jain, chief business officer, Prashant Gagneja, vice president of organised trade (mid-sized retailers), Ashish Aggarwal, vice president in charge of user growth, Anurag Rathore, vice president of products, and Rahul Chauhan, who was head of product design at the company, have all moved on, another person in the know told ET.
“There have been talks for new capital at BharatPe, but the contours are not finalised yet and valuation will be tricky because of its troubles as well as the broader correction in valuation,” said a person aware of the goings-on at BharatPe, adding it is still a couple of months away, at least.
Responding to emailed queries, a company spokesperson said BharatPe remains focused on achieving profitability and being IPO ready. “Our business is scaling well across business lines, and we are witnessing growth on all important business metrics,” the person said.
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While we have witnessed few exits recently, our attrition levels are below industry standards, and we continue to attract and induct new talent across levels,” the spokesperson said.
While the company wants to keep its valuation intact, given the top level exits and a slowdown in the overall funding climate, BharatPe might have to settle for a lower number, people cited above said.
“They could agree to settle for around $2 billion valuation, which will be a good point to start fresh,” one of them said.
The other person said the Peak XV and Tiger Global-backed company has been in the market for some time now, but discussions have not progressed to an advanced stage. “I do not think they have closed any term sheets yet,” the person added.
Rajnish Kumar, former chairman of State Bank of India, who is currently the board chair at the firm, has been driving all key changes including in fundraise talks, people in the know added.
BharatPe has seen a complete reshuffle at the top. Its cofounders Ashneer Grover and Bhavik Koladiya left the company in 2022. In January this year, chief executive officer Suhail Sameer also stepped down. Recently, it was reported that Dhruv Ranjan Bahl, chief business officer in charge of merchant lending, quit the company.
To keep the ship running, BharatPe had appointed Nalin Negi as CFO and elevated him to interim CEO after Sameer left. Former Razorpay senior executive Pankaj Goel joined as CTO, and former ICICI Bank executive Kohinoor Biswas joined as head of consumer lending. Prior to that, BharatPe got Aparna Kuppuswamy as chief risk officer and Sandeep Indurkar as chief business officer for banking and other alliances.
BharatPe had set a target to achieve Ebitda-level profitability by March 2023 and score a turnaround in the business with stronger revenue flows and an eventual public listing in the next two years. Showcasing these plans, BharatPe is hoping to raise fresh money and scale up its business operations.
“There has been a recovery in metrics after the clean up at the firm across businesses and the management. The firm has set an internal target to hit operating profitability by October,” one of the people mentioned above added.
In FY22, the company had reported total revenue of Rs 680 crore and a net loss of Rs 5,610 crore.
BharatPe had last raised equity funding in 2021, raising around $370 million at a valuation of $2.9 billion, when Tiger Global Management came into the company.
The new round could also assume significance in the context of BharatPe’s commitment towards Unity Small Finance Bank where it is a significant shareholder.
In a recent release BharatPe said it has around 200,000 devices deployed across more than 400 locations in the country. It intends to double its network of terminals over the next one year with the launch of its new Android-based PoS terminal.
While BharatPe was early to disrupt the offline payment space with its aggressive deployment of QR code terminals, players like Paytm and PhonePe have now gotten into deploying terminals that can accept both card and UPI payments.
On Monday, both Paytm and Pine Labs launched payment devices that can accept contactless card payments as well as QR code-based payments.
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