Tiger Global portfolio BharatPe testing waters for IPO

Breaking News 29 May

 Tiger Global portfolio BharatPe testing waters for IPO

BharatPe, a Gurugram, India-based financial services company is working with Citi to gauge investor interest in an initial public offering, according to two sources familiar with the situation.  

The company backed by Tiger Global and Sequoia Capital is in an exploratory stage and may even look at a funding round before the IPO, the first source noted. Details including IPO size and timeline would be discussed at a later stage, the source said. 

The company has a Likely-to-Exit (LTE) score of 54 out of 100, according to Mergermarket’s LTE predictive algorithm,which tracks the likelihood of sponsors exiting a portfolio company since the entry investment. 

Earlier this month, the company announced an acquisition of a 51% stake in Trillion Loans, a Mumbai-based non-banking financial company for an undisclosed amount.  

Such an acquisition will beef up its muscle before an IPO, the first source noted. Trillion Loans provides secured and unsecured loans to small and medium-sized enterprises, offers credit products including gold, auto and education loans to retail customers, as per its website.  

In its USD 370m funding round in August 2021, BharatPe was valued at USD 2.85bn. The Series E round was led by Tiger Global, with participation by Dragoneer Investor Group and Steadfast Capital, per the company’s announcement at the time.  

The company had raised a total of USD 580m till then, according to a report by Tech Crunch. Its other investors include Ribbit Capital, Coatue Management, Steadview Capital and Amplo among others, as reported.  

BharatPe's existing investors are likely to partially or totally sell their stakes via the IPO, the first source noted.  

Citi declined to comment, while BharatPe did not respond to requests seeking comments.  

BharatPe’s co-founder and ex-managing director Ashneer Grover has been embroiled in a legal battle with BharatPe, after allegations of financial irregularities surfaced in January 2022. In March last year, Grover resigned from the company, after his wife Madhuri Jain Grover, who was head of controls, was fired from her position.

Founded in 2018 by Ashneer Grover and Shashvat Nakrani, BharatPe offers a full-stack service app for merchants across small and medium businesses, offering loans, investments, insurance and other financial services. It has an extensive network of over 5m merchants across the country across 35 cities in the country, as per its website.  

In FY22 ended March 2022, the company’s net loss widened to INR 55.9bn from a loss of INR 29.6bn in FY21, while revenue rose 169% to INR 3.2bn, as per the company’s announcement.   

“While our total loss for FY22 is INR 55.9bn, it includes an extraordinary item pertaining to loss in change in fair value of compulsory convertible preference shares amounting to INR 47.8bn. This is not an operating loss but only a change in the fair value (previous year INR 13.4bn). Excluding this, operating loss is INR 8.1bn (previous year INR 2.7bn),” BharatPe said in a statement.  

In January this year, the company’s then Chief Executive Suhail Sameer stepped down from the position. BharatPe appointed Chief Financial Officer Nalin Negi as interim CEO, per the company's announcement at the time.

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