What if we say that you have to build your start-up in a sector where big, giant companies have already established a name? You would definitely hesitate to establish your startup as there is a risk that your start-up won’t get recognition because of the pre-established giants in that sector.
Consider this hypothetical scenario: suppose you want to launch a mobile smartphone company. But some top brands such as Redmi, Realme, Apple, and One Plus are already present. As a result, your start-up has very little or no chance of success.
But don't give up hope. Today, we will tell you about a fintech company that was founded in a sector dominated by giant fintech companies such as Google Pay, Paytm, and Phone Pe, but that start-up became a unicorn in India within three years of its incorporation and achieved massive success.
Yes, we're talking about Bharat-Pe, which has grown to become a successful and well-known Fin-tech company in India.
THE BHARAT PE STORY
 |
| Ashneer & Shasvat |
BharatPe was co-founded by Ashneer Grover and Shashvat Nakrani in 2018 with the vision to make financial inclusion a reality for Indian merchants. Ashneer is currently doing a show called "Shark Tank India" on Sony. Before Bharat-Pe Ashneer was CFO of Grofers, and after resigning from Grofers, Ashneer decided to work with Shashvat and wanted to establish their own self-reliant start-up.
NECESSITY IS THE MOTHER OF ALL INNOVATIONS
The main problem that both faced was that they didn’t have any idea of what start-up they should choose and how to do it.They don't just wanted to make a profit; they wanted to solve a common problem for people, and that solution can be turned into a start-up.
So as to rectify the problem, they started to visit different markets in Delhi and talked to many shopkeepers of different market places. While communicating with different shopkeepers, they identified a problem that, due to the pandemic, the profit margins of small shopkeepers were reducing at a very high pace in a very short period of time. The shopkeepers were not able to make a profit; most of the shopkeepers were at a loss at the time of the pandemic.
PROBLEM :- THE IDEA
Two major problems with UPI transactions were that :
1. Whenever a customer makes a payment through UPI, 1% or 2% transaction fees are deducted by the service provider of UPI. This was the first problem identified by Ashneer and Shashvat.
2. The second major problem was that different companies were having different QR codes, so as a result, shopkeepers had to keep the QR codes of all the UPI service provider companies, which became quite hectic for shopkeepers to keep all the companies' QR codes in one place.
SOLUTION :- THE INNOVATION
As a result, Ashneer and Shashvat desired that shopkeepers not face problems that would have a significant impact on their business.So Ashneer came up with the idea of creating a single QR code that could be used to conduct transactions for all UPI service providers. This will benefit both the customers and the shopkeepers. Customers no longer need to request a separate QR code for payment. Under one QR code, customers can conduct transactions with various UPI service providers.
This was the business strategy of Bharat-Pe. Soon, Ashneer and Shashvat got into work and they built a QR code so that from that code, transactions of phone pe, Google Pay, and Paytm can be made, and they also provide 0% transaction fees on customers' transactions, and the payment was transferred to the shopkeeper on the same day.
EARNING AND REVENUE MODEL
Now a question arises: if Bharat-Pe was not charging transaction fees and was also providing services, how were they able to make money out of it?
So Bharat-Pe started a new a peer-to-peer lending platform called 12 percent Club. The 12% Club, in which different businessmen were invited to give loans to small shopkeepers under Rs 500000 without collateral.It also provides merchant loans of up to Rs. 7 lakhs for terms ranging from 3 to 12 months.
This was introduced because banks were not giving loans to small shopkeepers because they didn’t have anything to use as collateral. Bharat-Pe launched an app for 12%club that was easy to use and did not require much paper work to grant loans to small shopkeepers. The money was directly transferred to the investors' accounts without making the process complex and diverse. The interest on the loan was quite reasonable, i.e., 12%. This was a very tempting opportunity for shopkeepers, so they started to take loans from 12%club.In 2020, they launched the Digital Gold product, which allows users to transact for 24-carat gold with a purity of 99.5 percent.
OUR FINAL WORDS
Today, Bharat-Pe is a company worth more than 285 crores, and they have an ample amount of funds in the company. They make loans totaling more than 300 crores every month.Bharat-Pe is now among the top fintech startups not only in India but across the world. Bharat-Pe is currently bested by phone-pe on the basis of customer acquisition and company valuation.
Customers are pleased with the services offered by Bharat-Pe. Bharat-Pe treats their customers like gods, and they always believe that once a customer uses their services, they will definitely use them again because Bharat-Pe has solved all of the problems that a customer and shopkeeper can face during any online transaction or in the case of loan taking by the shopkeepers/entrepreneurs.
Happy Learning
The Successlogy
2 Comments
Great article.He is an amazing business man and shark.
ReplyDeleteGreat write-up! Bharat Pe is surely one of the great startups in India here is the BharatPe Business Model- Foundation of BharatPe based on Total Revenue and Market capitalization.
ReplyDelete