BharatPe raises debt capital from Northern Arc

Resilient Innovations-run payments and financial services startup BharatPe has raised Rs 50 crore (approximately $7 million) in debt from non-bank lender Northern Arc Capital. 

The transaction marks the sixth round of debt financing for BharatPe this year. In January, the company raised a total of Rs. 200 crore ($26 million) from three debt firms - Alteria Capital, InnoVen Capital and Trifecta Capital. 

It also raised additional capital later from ICICI Bank and Axis Bank, the fintech firm said in a statement. 

“We have considerably ramped up our lending business in the last year and have set an ambitious target of facilitating disbursals to the tune of $1 billion to 10 lacs+ merchants by the end of current fiscal (FY22)… As we aggressively build this vertical and roll out products in the secured lending space, we will continue to partner with institutional debt providers to help empower millions of small merchants in India,” Suhail Sameer, group president, BharatPe, said. 

In February, BharatPe bagged $108 million in a growth round led by existing investor Coatue Management. The round included $90 million of primary fundraise and $18 million of secondary infusion which delivered exits for angel investors and employees. According to the company, 18 of its angel investors exited during the round, with returns as high as 80X in a period of two years.  

Its investor base includes Ribbit Capital, Insight Partners, Steadview Capital, Beenext, Amplo, and Sequoia Capital.  

Founded by Ashneer Grover and Shashvat Nakrani in 2018, the operator of a QR code-based payment app for offline retailers and businesses has raised nearly $300 million in equity and debt funding so far. Currently, it claims to process over 10 crore UPI transactions per month with over $10 billion of annualised transactions value. According to the company, it has facilitated loan disbursement of over Rs 1,600 crore to merchant partners since launch. 

The New Delhi based company announced in March that it has expanded its services to 100 cities in India.  The company said it has launched the first phase of the expansion, under which QR payment acceptance and loan services are being provided to merchant partners and small businesses in several tier 2, 3, 4 cities and towns. The second phase will see the rollout of other fintech products for merchants and will begin over the coming months. 

Chennai-based Northern Arc Capital (formerly IFMR Capital Finance) is a digital debt platform that caters to the under-banked in India. 

“Northern Arc has continually worked towards extending credit to like-minded organisations such as BharatPe that enable financial access to small businesses and merchants across the country. This transaction is a testament to Northern Arc’s commitment towards fulfilling the credit requirement of the under-banked segments of the country,” Bama Balakrishnan, COO, Northern Arc said. 

Northern Arc claims to have directly disbursed over Rs 3,500 crore ($500 million) over the last financial year to MSMEs, households, financial institutions and mid-market corporates. It has also enabled financing of over Rs 1,000 crore ($150 million) from development financial institutions from across the world to underbanked small businesses and households. 

It received Rs 40 crore of debt financing from mid-sized private-sector lender Kotak Mahindra Bank to support pandemic-hit MSMEs.