BharatPe, a payments startup in India, recently obtained an in-principle banking license and saw its valuation triple to $2.85 billion. The license, however, was not the only reason for the increase in value. The startup joined forces with Centrum Financial Services to bid on the troubled Punjab and Maharashtra Cooperative (PMC) Bank, with the intention of creating a subsidiary that focuses on the banking technology infrastructure market.
The aim was to build a digital-first bank, with BharatPe providing its technological expertise and the Centrum Group handling operations and compliance. This new entity, named Unity Small Finance Bank, was set to be the subsidiary’s first client, upgrading its core digital banking infrastructure and eventually generating around $100 million in annual revenues for the startup.
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Despite its steady progress, BharatPe recently encountered a turbulent period following controversies surrounding the former CEO, Ashneer Grover and allegations of financial impropriety. This led to numerous senior executives & founding members exiting the company which resulted in a setback for their tech plans. Despite facing a few difficulties, BharatPe’s tech team persevered and developed the digital banking system for Unity SFB. By March 2022, their hard work paid off as the first version of a mobile application was released for the new entity. We had planned to start beta testing of the app in July, followed by customer verification, payments & integrations to offer customers a short-term credit or buy-now-pay-later solution.
BharatPe took another step forward in June 2022 and formed Resilient Tech Serv Pvt. Ltd. This subsidiary strives to develop advanced technology solutions for the financial services industry. Unity SFB created a subsidiary in order to regulate its technology services, and dedicated teams were put together to manage this purpose.
Nevertheless, BharatPe’s standing among investors and the public was damaged subsequent to the controversy that occurred in January 2022 when a purported audio clip emerged in which Grover was heard hurling profanities at an employee of Kotak Mahindra Bank regarding the money for Nykaa’s public share offering. A few top executives, among them Nishit Sharma, Satyam Nathani, and the original founder & CEO of BharatPe Bhavik Koladiya had to depart from the organization. To recover his shares, Koladiya filed a suit against Grover.
Despite these setbacks, BharatPe’s subsidiary Resilient Tech Serv Pvt. Ltd continues to exist, but its future remains uncertain, casting doubt on the startup’s ambitions for a full-fledged entry into the banking-as-a-service sector.