In this week’s edition
- 1 TLDR post – where we quickly simplify the “too long” arduous stories that you “didn’t read”
- 2 latest articles & 1 podcast from the Capitalmind research desk
- 5 conversations from the slack community
- 5 interesting reads from across the internet
What is BharatPe?
It is a B2B fintech player, that enables merchants to accept payments from all UPI apps, through a single BharatPe QR code.
Earlier, companies like Google Pay, PhonePe, etc kept the payments within their closed network. It means PhonePe users can only pay to the merchants who accepted PhonePe. Likewise for Google Pay, Amazon Pay, etc. This led to merchants requiring QR codes of multiple companies for them to accept payments from different UPI apps.
In 2018, BharatPe tried to solve this problem. They allowed small merchants & SMEs to accept payments on any app using a single QR code. That was revolutionary at that time. However, very soon everyone started to offer a single QR code for all payments. That is when BharatPe ventured into lending.
How BharatPe is different from others?
Unlike Phone Pe and Google Pay which are B2C focused, BharatPe is a B2B player. The app is exclusively designed for merchants, small business owners, mid-scale retailers, etc.
- B2C focused: Paytm, PhonePe, Google Pay, Amazon Pay, Mobikwik
- B2B focused: Paytm, BharatPe, Razorpay, Pine Labs, Mswipe
How BharatPe makes money?
BharatPe is free for merchants. No transaction charges, no processing fees, etc. However, they make money by lending. BharatPe offers loans to merchants who accept payments via the app for over a month. They have all the transactional information of each merchant & offer collateral-free credit to the merchants. These unsecured loans are in the range of ₹20,000 to ₹7 lakh for up to 15 months at an interest rate of 12%. The loans were sourced from its subsidiary Resilient Capital which was incorporated in May 2019.
The company has facilitated loans to over 3L merchants and disbursed around 3000 Cr in the last 18 months. It does monthly disbursal of 300 Cr. The company ventured into P2P lending with their new app 12% club. It allows you to invest or borrow at 12% flat.
Image source: BharatPe
What next for BharatPe?
The company had clocked around 700 Cr in revenue in FY21. BharatPe had become Unicorn in Aug 2021 after raising $370 Mn led by Tiger Global.
BharatPe had formed a JV with Centrum Group to foray into banking. In Oct 2021, the RBI had issued a small finance bank license to this Centrum Group – BharatPe consortium. Incorporated as Unity Small Finance Bank had commenced its operations in November 2021. BharatPe had become the first fintech to get a Small Finance Bank license. This consortium will take over the assets & liabilities of PMC bank.
Capitalmind Research 💡
- [Podcast] On today’s show, Shray asks Deepak about how to make sense of the past two years in the markets, macroeconomics, and the seeming irrationality of it all. They also talk about how to look at the year ahead. Listen in – Lessons from 2021, the year irrationality went viral
- CM Chase clocked 25.5 % vs 22.7 on NIFTY. A large part of outperformance came in the last three months when the Index was down-trending, and chase managed to hedge the downfall. Read – Capitalmind Chase in 2021: Euphoria to despair and back again
- Is it the right time to invest? We get this question all the time, but there’s no universal answer. If you have money that you must invest, you’re only looking for the answer: should I deploy it now or later? Put another way: will the market fall now, so I will keep my money in a fixed deposit and deploy it after it falls? Read – Wealth Letter Dec 2021: The right time to invest is when you’re sleeping
[Premium] School of Slack 😎
Putting together the best conversations from our slack community
- What happens to the REIT unit price when they sell an asset? [link]
- Uncle theta trade update [Wednesday trade] [Thursday trade]
- We discuss Alpha Low Vol and Momentum in #bonds-and-funds [link]
- A quick analysis on Low Vol ETF [link]
- Does your starting point matter in investing? [link]
Links we Like✨
In this section, we bring you curated articles from across the internet that we found interesting. Today’s links are curated exclusively from our slack community:
- We’re in the midst of a wild market, with people seeking to convert a thousand dollars into a million within the span of months, if not weeks. The only way to do this is to invest in highly speculative assets and commodities – things that use risk as a selling point, and not as a deterrent. Read – Speculation: A Game You Can’t Win
- The primary yardstick analysts use to measure the economy’s health is GDP. The RBI and multilateral agencies use GDP statistics to make claims about the future growth path. But how reliable is the Indian GDP data?
- Hero Motocorp, which sells its products in over 40 countries globally, has a manufacturing capacity of over 9 million units annually and churns out a new two-wheeler every few seconds from one of its eight production plants spread across India, Bangladesh, and Colombia, is valued for about ~1x Sales. The author tries to figure out – Why? Read – The Business of Hero Moto Corp
- Few things will change your trajectory in life or business as much as learning to make effective decisions. Yet no one really teaches us what it means to make consistently high-quality decisions. Read – How to Make Smart Decisions Without Getting Lucky
- Plugging in the last Finshots Markets story of the year! And since it’s the final edition for 2021, they don’t talk about a stock or an industry. Instead, it’s time for a little reflection. Read – Will the “bubble” finally pop in 2022?
That’s all, folks. Have a great weekend!
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