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How We Built a Fintech Unicorn in Just Under 3 Years | Ashneer Grover (BharatPe)
1.2k Plays4 years ago
"In India, people will never pay for service, but they will always pay for credit."
This was the powerful and disruptive thesis that Ashneer Grover used to build BharatPe. He understood that the real money in Indian fintech wasn't in charging for transactions but in using the data from those free transactions to create a massive lending business for the underserved merchant community.
Ashneer Grover is the former Co-founder and Managing Director of BharatPe , the disruptive fintech company he scaled into a $2.85 billion unicorn in under three years. Before his entrepreneurial journey, he raised $170 million as CFO for Grofers (now Blinkit) and executed deals worth $3 billion as an investment banker at Kotak. An alumnus of IIT Delhi and IIM Ahmedabad , he became a household name as a judge on the first season of Shark Tank India.
Key Insights from the Conversation:
- The "Free" Business Model: BharatPe's revolutionary model of offering free UPI QR payments was a "trojan horse" strategy to rapidly acquire merchants and their transaction data, which became the foundation for the real business: lending.
- "Feet-on-Street" Scaling: The company rejected expensive digital marketing, instead building a massive on-ground sales force to personally visit and onboard merchants. This high-touch model was crucial for building trust and was one of the cheapest acquisition models in the world at ~₹200 per merchant.
- Founder Conviction: When VCs were skeptical, Ashneer raised the first angel round of ₹1.9 crores from friends and family, pegging the amount to the value of his own house as a personal guarantee to his backers.
- Branding for B2B Trust: He believes B2B brands, especially in financial services, need strong, mainstream branding to build trust. This led to high-profile campaigns with Salman Khan and a team of 11 cricketers to appeal to shopkeepers across India.
- Solve a Big Problem: Ashneer advises founders to pick a big enough problem to solve. He argues that the effort required is the same whether the problem is big or small, but the scale of success is determined by the size of the problem.
Chapters:
00:00:00 - Introduction
00:01:31 - Life at IIT Delhi, IIM Ahmedabad & The Lure of an MBA
00:06:21 - 7 Years in Investment Banking at Kotak
00:07:54 - Investing in Startups at American Express (MobiKwik, Paytm)
00:13:46 - First Startup Role: Scaling Grofers as CFO
00:19:46 - Understanding the Merchant at PC Jeweller
00:22:48 - The Genesis of BharatPe: Meeting the Co-founders
00:25:18 - The First Fundraise: Betting My House on the Idea
00:29:50 - The Zero MDR Disruption & Monetizing Through Lending
00:48:31 - Scaling to 60 Lakh Merchants: The 'Feet-on-Street' Model
00:51:45 - The Science of B2B Branding: Why We Signed Salman Khan
01:09:28 - Unfiltered Advice for Aspiring Founders
Hashtags:
#AshneerGrover #BharatPe #FounderThesis #StartupIndia #Entrepreneurship #FintechIndia #DigitalPayments #UPI #StartupFunding #VentureCapital #Scaling #BusinessStrategy #ZeroMDR #MerchantAcquisition #StartupStory #BusinessPodcast #MakeInIndia #IIT #IIM #SharkTankIndia #FounderAdvice
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Transcript
Bharat Pe as a SUNICORN
00:00:00
Speaker
Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour.
Ashneer Grover's Entrepreneurial Decisions
00:00:31
Speaker
At the time of producing this episode, Bharat Pei is technically classified as a SUNICORN, a startup that is soon to become a unicorn. But I am very sure that in the next few months, Bharat Pei will become a part of the unicorn club and what an amazing feat that would be. Consider this, Bharat Pei was started in 2018, which means that it will be among India's fastest unicorns.
00:00:57
Speaker
Ashneer Grover who founded this talks of how his first round of funding was the market value of his house and his logic was that in a worst case scenario, I will sell my house to pay back the money I am taking from early investors.
00:01:11
Speaker
but the clarity that Ashneer had is what has made this success possible.
Transition to Entrepreneurship
00:01:16
Speaker
Listen to this conversation as Akshay Dutt finds out what made Ashneer become an entrepreneur after a long and successful career and how he scaled Bharatpay to become the largest UPI payment app for merchants in the country.
00:01:31
Speaker
It was great. I think first semester, I was a bit lost because it was a bit lost. But which proved to be a fallacy. The first semester, I had a SGP of 7.3. But thank you. So from second semester onwards, I always hit a 9.5 or above.
00:01:58
Speaker
In fact, I was very infamous to have hit a 10 pointer in the last semester, right? And which is, and infamous because by that time, most people have either got their master's calls or their MBA calls, right? And no one is willing to put any effort into studies, but I was speaking towards the end of the thing.
00:02:20
Speaker
And you did an exchange program in France also? I did. So IIT used to have an exchange program. They used to have a selection criteria. But that selection criteria was pretty awkward because you had to have a CGP of 8.5 and above to qualify. So only the more academically inclined folks went there. But it was a great experience because I got to learn French. All our classes were held in French.
00:02:48
Speaker
So in the summer of 2002 is when me and five other folks went to, went to Insa Lyon. Lyon is the second largest city of France. And two months we were just learning French and then the course started and then we did two semesters there. But amazing, amazing fun. Living in Europe is a different experience.
Living Abroad vs. Cultural Comfort in India
00:03:10
Speaker
Meeting people from different backgrounds is amazing again.
00:03:14
Speaker
I feel like you should settle abroad. Once you've tasted that quality of life, then it's hard to come back to India. Yeah, so in fact, the whole point of going on exchange was to get a taste of that life, right? And if you want to get a taste of it,
00:03:35
Speaker
My mama stays in Canada. And when I had traveled to Canada and US, it always sort of felt like another world. But when I stayed in France for a year, a few things became clear. It's a trade-off. It's not an absolute, absolute no-brainer kind of a thing. You can make that jump your quality of life. Day one will improve by 200, 300%. But then it's a platinum.
00:04:05
Speaker
The second thing is it's a bit lonely as well, right? Because you know socially what you are used to especially if you are living in joint families and then if you have to live by yourself, it can be very, very awkward.
00:04:16
Speaker
So, I always like going overseas. I've now traveled like 46 countries. But now the pleasure is only going on a vacation, right? Because fundamentally, you feel so much comfortable in your own country and you feel so much in control. And if you feel like you're in a market market, you feel like you've advanced.
00:04:41
Speaker
It's a lot more effort. And therefore, your best outcome can actually come in India rather than overseas.
Career Shift to Financial Investment
00:04:54
Speaker
So after IIT, you got straight into IAM, you didn't want to work first, like you wanted to get over with studies or like... Yeah, no, so I had two options. I had a call for my MS as well in the US and I got a call from IMM, the brother as well. Then what's simple there, like when you're that young, you're not thinking too much. It's like keep basic harmony, right? And that's what excites everyone.
00:05:23
Speaker
And engineering in 2004, especially if it was not computer engineering or electrical engineering, was not the best, highest paying option.
00:05:36
Speaker
And, you know, MBA felt like MBA and all of a sudden you can draw a salary, which is like four X, five X of an engineering salary. So, so that was the, that was the call that I took for first few years, you have to make.
00:05:57
Speaker
good money, do well for yourself. And before went down the MB route immediately. So then after seven years at Kotak, you decided to move on. What triggered that move and tell me about the next stint?
00:06:20
Speaker
Yeah, so one thing that started happening is, see, I don't sit idle, right? What started happening was the deal activity by 2013 started becoming very, very scarce, right? So, you know, number of deals you would close in a year, you know, a good number would be two to three transactions, which you could call your own.
00:06:45
Speaker
It started coming down to almost like one and a half transactions a year. And then I said, you have looked at multiple industries, you have looked at multiple products.
00:07:01
Speaker
And then, you know, it was like the seven-year age. And the other thing was, I was the only guy around who had stayed at the same place, even seven years after joining from campus.
00:07:22
Speaker
So just to get that tag away, maybe, or just for the heck of it, I think I decided to move on and say, because Coated is a great place. I loved it. I still love, you know, what bankers do, but it was the only thing I had done and therefore stagnation. And therefore in 2013 is when I moved to Amex.
00:07:50
Speaker
Okay. And what did you join Amex for?
Investment Experiences at Amex
00:07:53
Speaker
Like what role? So Amex was in a joining role. So I was responsible for investing in Indian startups, especially the one in payment space, because back in the day, FinTech came to the point where most of the people who had just started doing their own startups were doing payment startup.
00:08:15
Speaker
And my job was as head of corporate development for Amex in India to look at opportunities where I could put Amex money to use. So I used to report to this gentleman called Sanjurishi, who was the India country head of Amex. And simple mandate, go and speak with startups, figure out what they're doing. And then let's see where to put our money behind. But how does this benefit Amex besides maybe a possible ROI on the money?
00:08:45
Speaker
Yes, it's also about can Amex network be used or can the investment be used to give a different experience to Amex customers, right? Both on the consumer side and the merchant side. So that is the basic thing beyond the just of course, the return on investment itself. Okay. And this is where you also got your first taste of the payment industry with Moby Quick Investment.
00:09:12
Speaker
Yeah, absolutely. So while I was there, I had met almost 100 founders of different startups. So I got started getting a very good sense of where the market is.
00:09:29
Speaker
In fact, I had evaluated some eight transactions while I was at Amazon. I had looked at Movie Quick and Movie Quick is what I had led the round along with Sequoia. This was their series B.
00:09:44
Speaker
And I had also looked at BTM, incidentally. So this was when Vijay was doing the Alibaba round. So Vijay and Madhur both had come to our office in Amex to pitch to us for Amex to invest money. I'd also looked at Pine Labs. So all the big guys you hear about nowadays, at some point of time during those two years, I had evaluated foreign investment at different rounds.
00:10:11
Speaker
Okay, why didn't the others materialize like PTM and Pinelab?
00:10:16
Speaker
So Pine Labs was because by the time I picked the conversation, I decided to move on. I think PTM, with Vijay, it's very simple. He's a great individual. He's a force of nature. I keep telling people compete with him as a competitor, but respect him always. And even back in the day, I used to love him.
00:10:46
Speaker
The sheer energy he had and the sheer amount of ideas he had was unparalleled. And I was very supportive of him. It's just that the way he was operating and the Amex view of world was slightly divergent. Amex is all about do it slow, do it proper. And Vijay was do everything fast and break everything.
00:11:12
Speaker
I think it was hard to marry the two. It was a very dysfunctional marriage, very frankly, even if I look back. But personally, I loved Vijaya. In fact, not a lot many people know.
00:11:26
Speaker
When Madhur Devara, who is his CFO now, used to be at Shetty Bank and used to cover me a lot. So Madhur had one day asked me if I had told him that I was going to do something else, right? And I had told him that I was going to do something else, that I was going to do something else, that I was going to do something else, that I was going to do something else.
00:11:48
Speaker
Incidentally, two months after that, Madhoor had joined Vijay. So only then I realized actually he was doing a F-check with me. Vijay would say, is it a good decision or not? And why were you bullish on Moby Quick? What did you like about Moby Quick? So Moby Quick...
00:12:08
Speaker
What I liked about them is that A, they were the only other player other than Vijay back in the day. So there was Moby Prick and there was Paytm.
00:12:20
Speaker
And the other thing was that Bipin and Upasna were very clear that they wanted to build a profitable closed-loop business. Now some of the things spanned their way, some of the things spanned differently over time. What do you mean by closed-loop, sorry? We have a couple of wallets bananatha. We will be quicker than wallet-y bananatha.
00:12:45
Speaker
right and unlike PTM they were very clear they would make it slow and gradually right
00:13:00
Speaker
as against overnight and break everything, kind of on you. And both of them had amazingly great credentials, by the way. They're very good friends even now. So that's when I said, Kinney, I didn't pay. It's not early to bet
Grofers CFO Journey
00:13:20
Speaker
less. And in fact, from at the level, Amex put money to where they are now even. It's multiple times return already.
00:13:30
Speaker
Okay. So these experiences must have given you like an itch to join a startup yourself instead of being on the other side of the table where you are evaluating and funding startups. Is that why you joined Grofers?
00:13:46
Speaker
Absolutely. So I think it may be the founder of God Worship. It's all about taking the risk and taking the plunge. So around early 2015, Albindar, who's a batchmate from IIT, he was working on grovers.
00:14:13
Speaker
So he came to me and said, he came to me and said, he came to me and said, he came to me and said, he came to me and said, he came to me and said, he came to me and said, he came to me and said, he came to me and said, he came to me and said, he came to me and said, he came to me and said, he came to me and said, he came to me and said, he came to me and said, he came to me and said, he came to me and said, he came to me and said, he came to me and said, he came to me and said, he came to me and said, he came to me and said, he came to me and said, he came to me and said, he came to me and said, he came to me and said, he came to me and said, he came to me and said, he came to me and said, he came to me and said, he came to me and said, he came to me and said
00:14:36
Speaker
And before we knew, $10 million were raised from Tiger and Sequoia. And how, like, without any execution, that got raised? On the concept here, we knew logistics and hyper-vocal logistics. And now we're going to use that to our advantage and become a consumer-side company. And broadly, among the U.S. companies, the U.S. has been stuck in Bada Vandra.
00:15:08
Speaker
So we raised 10 million and there was, Albinar had a very skeletal team till then. So he said, I joined him as the CFO. I was the first major employee to actually join him. And then from there, you know, one thing led to the other and things became really big for us.
00:15:34
Speaker
Okay, so I want to understand more on the Grofer's fundraise. At this time there was like zero execution or for example was an app up and ready or something up and ready. It was just on the back of a PPT that the fundraise happened. No, so we had done a beta version of the app and we were already delivering in Gurgaon. So we used to deliver
00:15:59
Speaker
On behalf of Chemist, we used to deliver on behalf of some certain Kirana shops. But we were able to replay. We were not facing the customer. At the customer app, we had made ready. In fact, the first day I joined, that day we had done highest orders, which were 30 orders for the day.
00:16:24
Speaker
So that is how early I sort of joined them. And your role was largely about fundraise, investigations and like powering the growth in a way.
00:16:39
Speaker
Yeah, it was more to make sure that whatever we're doing is done with certain level of sanity. So I was basically looking at everything which was commercial, legal, finance, and of course, fundraise. So those were the four things I used to look at. And then over time, I almost became a co-founder to Urbinder, right? So anything that needed to be sorted would come my way.
00:17:09
Speaker
So why didn't you continue in that state? It must have been pretty exciting because Grofers has been through a rollercoaster of a journey. So, you know, what made you want to move on? Yeah, so we have to move on. We have to move on to the south, right? And this is a very dense time, right? Like, because these orders are outroaded, right?
00:17:36
Speaker
So you had seen that 1000X growth journey in two and a half years. And we also raised a lot of money. We had raised almost 170 million dollars while I was there, including from the likes of SoftBank. And our business, Shurume, Marketplace, Tamnozko, inventory, let be Vanadiyata over time.
00:17:56
Speaker
But one of the things which was itching me was that my equity was not being sort of upped. Because for the amount of value I was adding, my equity promise was not being put into place in terms of actual grant of ESOPs. And I had these conversations and every time it would be saying
Leaving Grofers and Starting Anew
00:18:23
Speaker
But I said, let's put it on paper and you know why I have an element of doubt even in my head because I am willing to put 110% as I have demonstrated. So, I think it is important that equity
00:18:42
Speaker
Intention, verbal action. The other thing now in hindsight when I start thinking is maybe it's not time for me to have the operator hat.
00:18:58
Speaker
But maybe, you know, now I had learned enough from Albindar Ki, what does it take to create a startup? And maybe that was also another itch which was not verbalized within me, right? It was a combination of... because...
00:19:33
Speaker
Did you meet Masa also when you were doing the Softbank Fundage? I met Nikesh. Nikesh used to be that time but not Masa. So after this you joined like a very traditional business of PC jewelers. What was that experience like?
00:19:54
Speaker
I was just speaking with people. I was just speaking with people. I was just speaking with people. I was just speaking with people. I was just speaking with people. I was just speaking with people. I was just speaking with people. I was just speaking with people. I was just speaking with people. I was just speaking with people.
00:20:15
Speaker
But somewhere we can see that there is a huge banana, right? But you wanted an operational role. I needed an operational role. And the second thing which was clear to me is that there is a sustainable banana, right? But there is no e-commerce, there is no passive food, there is no food, right? There is no food, there is no economics, there is no money, right?
00:20:41
Speaker
When you are in a perfume shop, you have to smell the coffee before you smell the next perfume. So for me, it was like smelling the coffee kind of event. When I said PCJ, in fact, I had taken them public back when I was in Kotak. So I had a priority with them. But when I was in the store, I couldn't go to bed. I was a fancy investor. Customers came and said,
00:21:12
Speaker
and therefore I joined them and there also my mandate was not to be part of the jewellery business, my mandate was to actually build a gold loan business for it because Indian merchant
00:21:39
Speaker
So I was clearly lending a business banana and I said this is a good place to learn the golden business. And you will also learn how does a typical lala who sits in Karolbach thinks.
00:21:55
Speaker
And if you look back now for what I do as a business, that thinking is critical, right? Understanding of the customer. Exactly. Otherwise you'll be creating irrelevant products.
00:22:09
Speaker
Did you launch that? Like, what was the goal of the business? I was very close to launching it. In fact, almost all my homework. And I was there for hardly six months. What happened there was the need of Modi scam happened.
00:22:26
Speaker
And then the jewelry sector went into a spin of its own. And then I realized that it was not going to work because you know, more business pay is not going to work. So then I decided to move on and you know, June 18 is when I started
00:22:45
Speaker
working on Bharati as an idea.
Conception of Bharat Pe
00:22:48
Speaker
So how did that evolve as an idea? What was the initial idea? Finally, when you launched it, you know, what was that journey? So I had actually met with... So, I met Ustaim B. Mein Kaafi, start off with Miltar Adada, right? Just to understand the market. And I met Shashwath and Bhavik in IIT Delhi, right? And I was meeting them for a minute.
00:23:15
Speaker
And who are Shashvat and Bhavik? So Shashvat is my co-founder and Bhavik is the founding team member and both of them were at IIT Delhi back then in 2018. A friend of mine connected me with them saying here they seem to be
00:23:33
Speaker
keen on doing something called UPI. Seems to be very similar to payments. What's the UPI launch? UPI launch, but I think it's the most expensive one. I think it's the most expensive one. Well, Paytm was offering UPI payments. No, Paytm was offering it. Paytm is often closed to quality. What kind of within-your-bank app do you have? I don't know.
00:24:02
Speaker
But when I met them on the phone, I used to call them on Google Pay and search for them. But the merchant side of the company was not at UPI. So when I met them and I said, what is UPI? They said, I am a merchant with a QR code, and the consumer side of the company is not at UPI. So I said, I am a merchant with a QR code.
00:24:30
Speaker
And they said, we are too young and we don't understand the ways of the world. Would you want to sort of be partners? And I said, and in fact, we were like, I had already come on board. We were sitting in front of investors. Everything happened like very fast, right?
00:24:56
Speaker
just, you know, something waiting to happen kind of thing. And then, you know, we got into things. And now after that, everything has been a blur. So again, you raised like pre-launch or you launched first and then raised like, how did the fundraise happen?
00:25:18
Speaker
Yeah, that's interesting. I think that Shuru has a lot of belief in him. I think that he has a lot of interest in him. He has a lot of coffee and vegetables. He has a lot of UPI. He has a lot of nami, nami and vegetables in India.
00:25:34
Speaker
If you are a boss and you have a handle, then you can download your phone. If you are a downloader, if you are a Google downloader, if you are a developer, if you are a developer, then you will be able to download your phone. But if you are a downloader, then you will be able to download your phone. If you are a developer, then you will be able to download your phone. But if you are a downloader, then you will be able to download your phone. If you are a developer, then you will be able to download your phone.
00:25:59
Speaker
If you try to look at the PTM, what is the PTM? If you look at the PTM closed loop, you can see that there is an open loop market for the PTM. So I said, what I said is, if you look at the VCC, you can see that there is an open loop market for the PTM.
00:26:26
Speaker
And that has been true. So I raised 1.9 crores angel from friends and family. And maximum I took from anyone was purchase log. Right.
00:26:55
Speaker
And the idea was very simple. So, that is how the 1.9K magical figure also came from. So, we put our product out first.
00:27:23
Speaker
I think it is a good idea to start an investor company. I think the idea stage is to start a remotely started company. So, this is market now.
00:27:39
Speaker
But back in the day, we had to actually put the product out, get the first 1000 merchants in. Did you visit Kirana stores and all that? Did you hire people? Online leads?
00:28:03
Speaker
And I think that even if you are a child of a child, you have to be a child of a child. If you are a child of a child, you have to be a child of a child. If you are a child of a child, you have to be a child of a child. If you are a child of a child, you have to be a child of child.
00:28:26
Speaker
But because of Frita as a service, it took very fast, very fast. And, you know, we started in August and by September we had even gone to Bangalore as a market. Okay.
00:28:43
Speaker
And you would have hired people here. Again, you personally went to Bangalore. No, so Shashwat went to Bangalore. Me and Babik stayed back in Delhi. I did a lot of work on bank partnerships, making sure we are hiring.
00:29:01
Speaker
people hiring the sales team and set up the new city. But everything from technically scratchy,
00:29:33
Speaker
So how many merchants had you onboarded by the time you got institutional investors in? I think by the time we got institutional investors in, we were already at like 20,000 merchants. And what was the pitch? Like this was a free service to the merchants. Well, you're not charging. Which was always clear. India with payments, revenue is tending towards zero. It was zero.
00:30:01
Speaker
You were clear on that at that time also. Today, of course, this is clear, but what is the time for you to tell me? I will tell you. Because you are based on 0% of the QR code, right? The first instance is clear, right? The first instance is clear,
Bharat Pe's Merchant Strategy
00:30:25
Speaker
right? The first instance is clear, right? The first instance is clear, right? The first instance is clear, right? The first instance is clear, right? The first instance is clear, right? The first instance is clear, right?
00:30:30
Speaker
The digital payment is still in use because of the 2% charge. If the charge is not charged, you will be able to charge it.
00:30:40
Speaker
So, uh, so, uh, 0% MDR is in fact, India may, uh, introduce him. Right. Uh, and you wish proponents lot, not many people know, but in fact, the government, when it made 0% MDR, uh, uh, we were a case study for them saying, Hey, this is this company called Bharat pen in one year, one and a half years, they've grown so big because they've been offering you pay for free. Right.
00:31:07
Speaker
And then the government said that the free currency is growing and the digital payments are growing. So in January 2020, the government made 0% MDR per hour. It was one and a half years after Bharati had already made it 0% for the merchant. At that time, I think Paytm used to take 2% cash into your account. Absolutely. So Paytm used to charge 2% on this.
00:31:33
Speaker
Okay, so like coming back to your pitch to investors. So you were clear that payment transaction could monetize as a like a transactional cut. So then what was the monetization? So monetization was always clear. What is the lending curve? What is the payment curve? What is the cash flow? What is the visibility of the business?
00:32:03
Speaker
So I was like, you know, coming back to my original point, I was always seen on lending, even at PCJ, right? The only thing I wanted to do was lend. And the principle is clear, that Indusar mein, Guptaji, or Jansab, abne employee ko bhi paisa nahi dengi, ko service ka paisa nahi dengi, but bhi aad ka paisa nahi dengi.
00:32:28
Speaker
I think it's a good idea to be able to do this. And I think it's a good idea to be able to do this. I think it's a good idea to be able to do this. But you need to be an NBFC to lend money. Like, did you set it up as an NBFC? Yeah, we partnered with NBFCs. So, I think it's a good idea to lend a business to NBFC.
00:32:56
Speaker
But we were fortunate enough and I had a network big enough that we had four or five NDFCs which were willing to partner with us. Right. And therefore we started that piece on partnerships. So payments or loan or partner in books. What was that customer journey like? You know, if he signs up for a free QR code to accept payments, how does he then become a revenue generating customer for you?
00:33:23
Speaker
So yeah, so in our first product and I would say for the first six months, the simple proposition for the merchant was key up QR link or set up in a bank account.
00:33:35
Speaker
and you can start taking payments within five minutes. But that was just our foot in the door with the merchant. The real place where we make money is actually lending. And in our journey, we were very early into lending. So by April 2019, I had already started lending to the merchants, which was just roughly seven, eight months after we started our business.
00:34:05
Speaker
And in that, the logic was pretty simple. There was already a history here. There were many transactions. There were many transactions. There were many history bases. There were a lot of computers. There were a lot of computers. There were a lot of machines. There were a lot of systems in the system.
00:34:30
Speaker
If you look at the history of the repayment system, you can see that the system has a repair system, and you can see that it has a bad credit score. Exactly. The Bureau of History has a bad credit score. So, if you look at the Bureau of History, you can see that there is an internal score, and you can see that there are no loan offers.
00:34:53
Speaker
So, unlike the QR, I don't know how to use it. For the loan, everything was digital. So, if you have a KYC document upload, you can offer the app to generate the data. If you have an E-Natch mandate, you can set it up.
00:35:17
Speaker
If the transaction is not in the queue, it is not in the queue. If the bank is not in the queue, it is not in the queue. If the merchant is not in the queue, it is in the queue. If the merchant is not in the queue, it is in the queue. If the merchant is in the queue, it is in the queue. If the merchant is in the queue, it is in the queue. If the merchant is in the queue, it is in the queue. If the merchant is in the queue, it is in the queue. If the merchant is in the queue, it is in the queue. If the merchant is in the queue, it is in the queue. If the merchant is in the queue, it is in the queue. If the merchant is in the queue, it is in the queue.
00:35:43
Speaker
And easy access to credit, he had just curious, a money loan book. I got my heart. They couldn't put so much he's so corrupt. Okay. Six twenty five crores or roughly 90, $90 million. He already won. But we have one lakh, 10,000 hundred and 10,000 live loans on the platform. Okay. How do these numbers compare? You know, six, 25 crores in a context of other similar companies like
00:36:12
Speaker
Yeah, so very frankly, similar businesses are comparable. But generally, I think that there is a lot of diversity in the business. There is a lot of diversity in the business. There is a lot of diversity in the business. There is a lot of diversity in the business. There is a lot of diversity in the business. There is a lot of diversity in the business.
00:36:41
Speaker
So we are going at a very, very good pace. So think of it this way, incrementally.
00:36:55
Speaker
which in the Indian context of small merchants would put us among the top five lenders to this segment clearly.
Scaling Bharat Pe and UPI Impact
00:37:08
Speaker
Other than overall business numbers, we do roughly 30 to 33 lakh transactions a day. Value wise, it's roughly 140 crores every day on UPI QR itself.
00:37:24
Speaker
that makes us the number one processor offline in the UPI context and in the overall merchant context, if we have offline or online, that makes us the number three player in India. And now we are much ahead of Google Pay. So, now we have to go to Google Pay for online and offline. So, offline is number one, overall number three.
00:37:53
Speaker
Okay. So this market share calculation is done. So like if a transaction happens and excite my PTM user, excite my Bharat per user, to both of these get equal credit. No, no, no. So may I guess if a market share is still in account of land which is in the transaction?
00:38:12
Speaker
If you look at the consumer side market share, you can see on the phone or Google, you can see 40-40% market share roughly, given any market share. But on the consumer side, you can see 40-40% each market share. But if you look at the merchant market transaction,
00:38:35
Speaker
Okay. Okay. Got it. Okay. Okay. And you are almost at a unicorn valuation now. How did that funding journey evolve from that initial value 1.9 karol? Sochkar, who raised half of friends and family sales to today, like tell me about that journey.
00:38:59
Speaker
Yeah, so the fundraising fund is, you know, in hindsight, you have to pay for it, but this time, you have to pay for it, right? You have to pay for it, but you have to pay for it.
00:39:22
Speaker
So, we were always stacked against the Goliaths of the world. So, we were always stacked against the Goliaths of the world. We were always stacked against the Goliaths of the world.
00:39:40
Speaker
So it's always been a very, very tough journey as against the numbers we had. Right. So, you know, I keep telling people. Right.
00:39:59
Speaker
Personally, I personally value my product and branding. I personally value my product and branding. I personally value my product and branding.
00:40:14
Speaker
Uh, but having said that, uh, thankfully a chain, Mr. Caffee here. Probably world cause one of the strongest captables. Uh, could you, uh, inside state view be next. Uh, so not a single Chinese shareholders. Thankfully, uh, because it would have gone against us. Um, so on all American lineup in some, some sense.
00:40:43
Speaker
And I have at least four investors who have an ability to write $100 million, $200 million checks even going forward. So in Kondarlana, I think that there is a lot of conviction for investors. So I think that there is a lot of capital there with you for the long haul.
00:41:08
Speaker
So, and how has the product evolved? So, you started with QR code, then you added lending and what next after that? There are some other additions also.
00:41:18
Speaker
Absolutely. So we started tying up with P2P NBFCs. So help me understand what does a P2P NBFC do?
00:41:40
Speaker
So, P2P and BFC can be used as an individual, as an individual's end-to-end, right? So, if the interest rate is higher, then the market can be used as an option.
00:41:59
Speaker
So, we work with a couple of P2P NVFCs and they offer an opportunity for you to earn up to 12%. And the good thing is P2P NVFC can be introduced by TDS Vini like that. So, if you have an option like this, P2P NVFC can be used by P2P NVFC.
00:42:21
Speaker
So, how long have you been in the NBFC? We have also applied for our NBFC license. In the last one year during COVID, RBI had gone slow on certain jurisdictions.
00:42:48
Speaker
We will reapply for the MVC license.
00:43:28
Speaker
So, is that the reason for looking at PMC bank?
00:43:49
Speaker
So, financial product is not a constraint, but regulatory guidelines can operate. So, in BFC, there is a guideline for lending. The bigger universal guideline is the banking guideline, right? And especially in Hamariko, small finance bank is very small.
00:43:55
Speaker
Yeah, it is one of the reasons.
00:44:13
Speaker
Because unlike other banks, they are intentionally making big business houses.
00:44:42
Speaker
And we automatically become eligible at a later stage for a SB license.
00:44:49
Speaker
That was the other
00:45:04
Speaker
I think PMC Bank is also trying to solve that problem and in solving their problem also solve for ourselves in getting the license much ahead of time. So, our intentions are to bid for PMC.
00:45:25
Speaker
What will a small finance bank give you? What else would you be able to offer to your multiples? What else would you be able to offer to your multiples? What else would you be able to offer to your multiples? What else would you be able to offer to your multiples? What else would you be able to offer to your multiples? What else would you be able to offer to your multiples?
Tech Advancements and Future Plans
00:45:52
Speaker
In addition, there are multiple partnerships. In addition, there are multiple partnerships. In addition, there are multiple partnerships. In addition, there are multiple partnerships. In addition, there are multiple partnerships. In addition, there are multiple partnerships. In addition, there are multiple partnerships.
00:46:42
Speaker
So, and the other thing is we also feel fundamentally.
00:46:49
Speaker
Right. Because of consolidation.
00:46:54
Speaker
Because of consolidation and because of the use in electricity, there is a lot of work to be done. There is a lot of UPI exchange, a lot of digital transactions. There is a lot of construction of transactions. There is a lot of bank money. There is a lot of cash withdrawal. There is a lot of digital transactions. There is a lot of bank money. There is a lot of cash withdrawal. There is a lot of digital transactions. There is a lot of money.
00:47:23
Speaker
If you want to buy a pizza order, you can buy a Domino's outlet. If you want to buy a fire order, you can buy a pizza order. You can buy a pizza order. Similarly, if you want to buy a bank, you can buy additional milk. You can buy more money. If you want to buy one, you can buy one.
00:47:44
Speaker
It is not a minimal physical footprint or a majority digital footprint. It is a profitable, healthy bank. It is an experiment and a proof. And it is a proof that we have to take care of it. We have to take care of it. We have to take care of it.
00:48:08
Speaker
So, how many merchants do you have today now using Bharat? So, we have close to 60 lakh merchants acquired cumulatively till date. How did you scale 1000 merchants to initially manual efforts acquired to getting 60 lakh merchants? How did you build for scale?
00:48:31
Speaker
So, you know, build-for-scale is very simple. We have to make sure that the feet are in the street model. We have to make sure that the ground floor is on the ground floor. We have to make sure that the ground floor is on the ground floor. So, we have to make sure that the employees are on the ground floor and that they are convinced that the service is free.
00:48:55
Speaker
There is a lot of money, there is a lot of insurance, there is a lot of additional facilities. So, in person, that is what we have done. We have done a lot of Google, Facebook, Facebook, etc. But we have done a lot of things. There is a lot of foreign exchange in India.
00:49:34
Speaker
that is more nation-building as again saying that Facebook and Google are facilities employees that are digitally acquired.
00:49:47
Speaker
So, if you want to pass it, you can pass it to India. And you can pass it.
00:49:53
Speaker
I am an Indian employee, to make his livelihood. So, we are on Feton Street. And we continue to be predominantly on Feton Street. I don't like digital acquisition. I am a merchant acquirer. I don't have a service based on it. I am purely digital. Do you have an app or phone? I have an app. I have a physical app.
00:50:34
Speaker
So what is the economics of the feet on street people? Like one person, each person, how many merchants does he add?
00:50:50
Speaker
And essentially, you have to be able to sell your merchant. So, you have to be able to sell your merchant to a platform live. So, the cost of acquisition is $3.00 or $200.00 per day.
00:51:14
Speaker
which is one of the cheapest in the world for acquiring either a merchant or a customer. So economics wise also it makes a lot more sense than doing things digitally.
00:51:28
Speaker
And you also did an ad with Salman Khan. What was the effect of that ad? How did that help? Is it something which you will do more of or it's a one-time thing and you don't need to do more of it?
00:51:45
Speaker
No, I don't know. I don't know. I don't know. I don't know. I don't know. I don't know. I don't know. I don't know. I don't know. I don't know.
00:52:05
Speaker
And therefore, there is a lot of comfort and there is a lot of trust. So, trust is important. Financial services especially trust is important. So, if you have a big company, you have a big company, you have a big company. If you have a big company, you have a big company. And if you have a simple reason, in India, if you have a small company, you have a big company.
00:52:35
Speaker
The first criteria is that the superstar is on-the-ground shopkeeper who is appealing to his personality. And this is why we have to look at his brand. In 2019, he was the other brand ambassador.
00:52:53
Speaker
And if you add ads, you will be able to add ads. If you want to add money, you will be able to add serious ads. If you want to add money, you will be able to add more ads. If you want to add money, you will receive more market. And overnight, you will be able to establish a brand brand.
00:53:13
Speaker
If you want to contract a contract, you can experiment with the crickets. So, if you want to be a cricketer, you can do that. If you want to have a unique concept, because if you want to be a cricketer, you can do that. If you want to be a cricketer, you can do that.
00:53:34
Speaker
And the team pulled in, because they had no idea what was going on in the game. They had a business team, they had a manager team, they had a team team, they had a team team, they had a team team.
00:53:56
Speaker
There are a lot of different parts of India. There is an appeal to Pan India. There is a Bollywood appeal. North, west, up to a bit east, but south there is a film industry. And there is a super star. So there are a lot of people who are from the south, and there are a lot of deluges.
00:54:20
Speaker
We have to appeal to the national level, right? So, we have to scale around the world, right? We have Sanju, Samsung, right? And we have to have a role in the world, right? We have to have Suresh Rana, right? So, we have to have the original city association, we have to have the IPL team association, right? But we have to have the association, right? So, for example, Suresh Rana is a big name in Chennai because of Chennai Super King, right?
00:54:50
Speaker
So, I think that there are many pan-indians who are based on this. So, I think that this category started being associated with Bharatpek.
00:55:07
Speaker
So, at least financial services may cricket as a category and monopolize in some sense, right? So, I think it is important for marketing people to know that the Indian Indian Indian team is a good team.
00:55:29
Speaker
Okay. Okay. That's amazing. So what is, according to you, going to be like now grow drivers for Bharatpe Matlab? Like, is it that, you know, keep hiring more feet on street? Because each feet on street gets you 100 merchants every month and that is the way to grow the business. And out of those 100, 10 of them become monetizable. So is that your vision on how to grow this further? You know, like, what do you see as the way to grow?
Growth Strategy and Partnerships
00:55:58
Speaker
You know, when I look at it, I think that it will expand the city more in the future. So, I think that the cities of Portugal, in fact, are the next growth vector. And I think that our team member, Nishanjan, who is a Zumato member, who is known as Zumato Po,
00:56:29
Speaker
So, he has joined us one year back and he has created a plan to take us to 300 cities. So, he has automatically created a plan to take us to 300 cities. So, he has created a plan to take us to 300 cities. So, he has created a plan to take us to 300 cities. So, he has created a plan to take us to 300 cities. So, he has created a plan to take us to 300 cities. So, he has created a plan to take us to 300 cities. So, he has created a plan to take us to 300 cities. So, he has created a plan to take us to 300 cities. So, he has created a plan to take us to 300 cities. So, he has created a plan to take us to 300 cities. So, he has created a plan to take us to 300 cities. So, he has created a plan to take us to 300 cities. So, he has created a plan to take us to 300 cities. So, he has created a plan to take us to 300 cities. So, he has created
00:56:53
Speaker
and the membership of each of our products will have additional benefit. So, in the past, we have been talking about the matter world. We have been talking about how consumers can benefit from this. We have been talking about how they are purely shopkeepers.
00:57:14
Speaker
If you have recently launched a shop, you can see that the membership is already paid to you. So if you look at the membership, you can see that there is a stickiness with the merchant, and there is a proposition that the business with the merchant is automatically paid to you. So if you have a nice share, the existing merchant has a deeper, stronger relationship.
00:57:38
Speaker
I don't think it's going to work. Do you think it's going to work? Do you think the club membership can benefit from this? Like some examples? Like a lower rate of interest? I think it's going to work. I think it's going to work. I think it's going to work. I think it's going to work. I think it's going to work. I think it's going to work. I think it's going to work. I think it's going to work.
00:58:04
Speaker
In addition, if a card is spent on a spend, the card will be paid 500 rupees. So, first time use card. That's like a debit card. You can use it on any cost. It's a prepaid card. It's a prepaid card. If a merchant has money with us, it will be settled. If a settlement is used, it will be used.
00:58:30
Speaker
But it will work on any post, like any master gratification post. Any post, any ATM, and online as well. So, if you have a normal loan, you have 2% processing fees charged at the upfront. You have to have a card machine. If you have a card machine, you have to have 5,000 rupees per day. If you have a machine, you have to have 4,000 rupees per day.
00:59:11
Speaker
So, multiple cheezos pay them.
00:59:21
Speaker
And the concept is that if a merchant has Rs.1000, he will be able to maintain his investment. And he will himself deepen how many products he will use.
00:59:35
Speaker
Got it. Okay. Okay. And are you also planning to sell like wealth products, you know, like mutual fund investment, insurance and things like those insurance. In fact, in fact, insurance premium worth selling.
00:59:57
Speaker
We were the first ones to launch covid insurance. Without hospitalization, no questions asked. The insurance would have paid you 25,000 rupees, right?
01:00:25
Speaker
I feel more confident about P2P kind of investment products rather than stock market and mutual fund product.
01:00:49
Speaker
So let's say the market will be fixed in return. So let's say the market is fixed in return. Let's say the market is fixed in return. Let's say the market is fixed in return. Let's say the market is fixed in return. Let's say the market is fixed in return. Let's say the market is fixed in return. Let's say the market is fixed in return. Let's say the market is fixed in return.
01:01:20
Speaker
But on the ground shopkeeper, right? It's not worth his time, right? They are more comfortable there. And I think, therefore, this segment, P2P investments are much more pertinent than, you know, Muflifer.
01:02:00
Speaker
But the default map, is it like one-to-one mapping? Is it like one-to-one mapping? Is it like one-to-one mapping? Is it like one-to-one mapping? Is it like one-to-one mapping? Is it like one-to-one mapping? Is it like one-to-one mapping? Is it like one-to-one mapping? Is it like one-to-one mapping? Is it like one-to-one mapping? Is it like one-to-one mapping? Is it like one-to-one mapping? Is it like one-to-one mapping? Is it like one-to-one mapping? Is it like one-to-one mapping? Is it like one-to-one mapping? Is it like one-to-one mapping?
01:02:12
Speaker
Okay, and what is the risk in the P2P investment?
01:02:29
Speaker
I think it's a bit of a disaster for me, right? I don't know how much I can do, but I think it's a good thing to do. But I think it's a good thing to do at scale. So, I think it's a good thing to be partners with technology, and I think it's a good thing to do. So, I think it's a good thing to do at scale.
01:02:53
Speaker
So, that way Aik borrowed and Aibhi paid for it. Yeah, Aapka had a specific risk right. Of course, Aapka has defaulted. But, normal course has a high risk right. So, when Aapka had a specific individual risk right, on Aapka,
01:03:18
Speaker
individual cost is 8% and 0.1% is the cost of the product. Is this like a sweep product? If you look at the price of the product, if you look at the price of the product, if you look at the price of the product, if you look at the price of the product, if you look at the price of the product, if you look at the price of the product, if you look at the price of the product,
01:03:44
Speaker
And we request that we have an investment that we can invest in. If we invest in our investment, then we have to invest in our investment. So we have to invest in our investment. So we have to invest in our investment. So we have to invest in our investment. So we have to invest in our investment.
01:04:05
Speaker
Okay, so speaking of regulatory landscape, you know, what do you feel are things which can help fintechs grow faster, things which if they were changed, like if those guidelines were changed, then companies would grow faster.
Regulatory Changes and Fintech Role
01:04:21
Speaker
No, I think there should be some sort of a universal license. There should be some sort of a universal license. There should be some sort of a universal license. There should be some sort of a universal license. There should be some sort of a universal license.
01:04:51
Speaker
So, it is a universal license home.
01:05:12
Speaker
Right. So that the NVCIO actually market.
01:05:24
Speaker
If you solve this problem, if you solve this problem, if you solve this problem, if you solve this problem, if you solve this problem, if you solve this problem, if you solve this problem, if you solve this problem, if you solve this problem, if you solve this problem, if you solve this problem, if you solve this problem, if you solve this problem, if you solve this problem, if you solve this problem,
01:05:40
Speaker
So I think that will help you. The other thing I feel is that fintechs can play a huge part in reducing frauds. Because India has a lot of transactions in India, right? And there are many people who want to make money quick and all that.
01:06:19
Speaker
I think it is important to be able to automatically debark your data. I think it is important to be able to automatically check your data. I think it is important to be able to have a centralized database. I think it is important to be able to have a centralized database. I think it is important to be able to have a centralized database.
01:06:29
Speaker
So other than the central data base, right?
01:06:48
Speaker
I don't know if it's true or not, but I think it's true. Yeah, the credit bureau is not a capital. The existing credit bureau... This is not a credit default, right? This is a fraud, right? I think the customers are paying the goods, right? I think social engineering companies are paying the banks, right?
01:07:16
Speaker
You know, after the OLX platform came out, they were both very prevalent, right? So, after the OLX platform came out, they were both very prevalent, right? So, after the OLX platform came out, they were both very prevalent, right? So, after the OLX platform came out, they were both very prevalent, right? So, after the OLX platform came out, they were both very prevalent, right? So, after the OLX platform came out, they were both very prevalent, right? So, after the OLX platform came out, they were both very prevalent, right? So, after the OLX platform came out, they were both very prevalent, right? So, after the OLX platform came out, they were both very prevalent, right? So, after the OLX platform came out, they were both very prevalent, right? So, after the OLX platform came out, they were both very prevalent, right? So, after the OLX platform came out, they were both very prevalent, right? So, after the OLX platform
01:07:34
Speaker
I think it's actually the best way to do it, right? So, all our fintechs have enough, you know, data and analysts who can put checks in place. So, that's your platform.
01:07:58
Speaker
At the KYC stage only there is a flag, like a red flag. Exactly. You have a red dot against your name in the central database and you cannot avail of this service.
01:08:35
Speaker
But it is politically difficult because you know privacy concerns and private privacy concerns.
01:09:06
Speaker
As an Indian, you are putting yourself out there every day. So don't overvalue your privacy.
01:09:16
Speaker
OK, cool. So any last messages that you want to leave aspiring founders with, you know, people who are listening to the podcast and want to have their own startup one day? Yeah, I think...
01:09:43
Speaker
For every success story, we saw failure stories. Because that does not make for good hearing. People in India are optimistic.
01:09:59
Speaker
Success is a big problem. Is it a big enough problem, first of all?
Advice for Future Founders
01:10:29
Speaker
So, I would rather try for something big and take a failure there because the success scenario may scale up a little bit. So, the problem is that it's not a job solve problem. Second, intention is not a problem. It's not a fancy problem. It's not a fancy problem. It's not a fancy problem. It's not a fancy problem. It's not a fancy problem. It's not a fancy problem.
01:10:57
Speaker
I think it is important to know that there is a lot of insecurity. There is a lot of insecurity. I think that many of the series, many of the series, many of the series, many of the series, many of the series, many of the series,
01:11:17
Speaker
8th level, next problem, solve the problem, time, you know, the finer things of life and joy. So it is a lot of hard work. It is a lot of pain. It is a lot of heartburn. You should be ready for everything.
01:11:38
Speaker
And don't be fascinated by only the good things that come with doing your startup, right? Be ready for the bad things because...
01:11:57
Speaker
I think the negative element of the market
01:12:12
Speaker
I have a doctorate degree so I have to be a founder. I have a doctorate degree so I have to be a founder. I have a doctorate degree so I have to be a founder. I have a doctorate degree so I have to be a founder. I have to be a founder so I have to be a founder. I have to be a founder. I have to be a founder. I have to be a founder. I have to be a founder. I have to be a founder. I have to be a founder. I have to be a founder. I have to be a founder. I have to be a founder. I have to be a founder. I have to be a founder. I have to be a founder. I have to be a founder. I have to be a founder. I have to be a founder. I have to be a founder. I have to be a founder. I have to be a founder. I have to be a founder. I have to be a founder. I have to be a founder. I have to be a founder.
01:12:38
Speaker
I think it's a great job. Doing a job is a great thing. I think it's a great job. I think it's a great job. I think it's a great job. I think it's a great job. I think it's a great job. I think it's a great job. I think it's a great job. I think it's a great job. I think it's a great job.
01:12:57
Speaker
There are a lot of reasons why. If you are a start-up, if you want to be cool, if you want to be a college drop-out, you can do anything you want to be successful in.
01:13:15
Speaker
That was the inspiring journey of making Bharatpay into one of India's fastest growing FinTech companies. Do check out the Bharatpay app from the app store of your mobile to make and receive UBI payments.
01:13:29
Speaker
If you like the Founder Thesis Podcast, then do check out our other shows on subjects like Marketing, Technology, Career Advice, Books and Drama. Visit thebotium.in that is T-H-E-P-O-D-I-U-N dot I-N for a complete list of all our shows.