YC-backed BharatX raises $4.5M in funding to enable embedded credit

Bengaluru-based BharatX, a fintech startup that enables consumer placing platforms to offer credit-as-a-feature, has raised $4.5 million (approx. Rs 34.8 crore) in a seed round led by Y-Combinator, 8i Ventures, Multiply Ventures, Soma Capital and other investors to enable embedded credit in the Indian market. Existing investor Java Capital also participated in the round.

The round also saw participation from several marquee angel investors, including Arash Ferdowsi (Co-founder of Dropbox), Harshil Mathur (CEO & Co-Founder of Razorpay), Shashank Kumar (Founder of Razorpay), Varun Alagh (Co-founder & CEO of Mamaearth), Kunal Shah (Founder & CEO of CRED), Ankur Aggarwal (Co-founder of Dunzo), and Vikas Choudhury (President, Reliance Jio).

Prior to this round, the fintech startup had raised $250,000 in a pre-Seed round in December last year.

Founded in 2019 by Mehul Nath Jindal, Eeshan Sharma, and Shyam Muruga, BharatX, a consumer credit venture, provides embedded credit by partnering with brands and websites to provide a credit feature in their apps to serve customers.

The startup operates White-labeled Buy Now Pay Later and other Credit products on more than 50 consumer-facing platforms via its APIs and SDK.

It aims to deliver seamless embedded credit experiences on several consumer-facing platforms across India, with zero credit risk and zero operational hurdles for the Brands it partners with.

“Consumers of India deserve a better class of Credit products out there. Today, if you look at the landscape, most players have low Credit Eligibility approval rates, long documentation sign-up processes and unethical collection practices. We want to give the Middle Class of India easy access to credit products that they deserve yet are not able to access today, while setting the bar for world-class UX and customer service while doing so," said Mehul Jindal, Co-founder & CEO, BharatX.

“Our B2B2C business model enables us to not only win trust of users via the Brand power of players we work with, but also enable us to reach to Millions of users at Scale with almost Zero Cost.. And with this new round of support from our investors, we’re looking to scale up faster & more aggressively in the near future,” he adds.

BharatX says the raised funding will be to build and expand the team, enhance and develop the product further, and for market expansion. Powered with a “credit approval rate” of 45 – 55%, which is 3-4X the market standard, BharatX aims to increase the credit stack on offer by launching new product verticals such as UPI Credit, Pay in 3 and 15/30 day cycle products like Credit Cards, it said.

Speaking on the investment, Vikram Chachra, Founding Partner, 8i Ventures, said:"It's rare to find this combination of clarity of vision and flawless execution at such an early stage of a venture. Mehul and his co-founders are carving out a whole new white label BNPL category for India's brands. We are delighted to partner with them as they pursue their audacious vision of building India's largest BNPL platform.”

Arash Ferdowsi, Co-founder of Dropbox, adds, “I’ve been very impressed by Mehul and the BharatX team. They have a clear vision for the future of e-commerce in India and the talent to make it a reality. In a short time, they’ve made the “buy now, pay later” experience seamless and instantaneous for both brands and consumers. I can’t wait to see what they build next.”

The fintech startup claims to have been working with more than 50 brands in India including the largest D2C brands in India, growing more than 10X in the last 4 months in volume. 

At present, nearly 480 million Indians don’t get access to credit due to lack of documentation, high-interest rates, and inadequate supply of credit in the informal sector. There is a $1 trillion credit gap in the Indian middle class wherein less than 3% of India has credit cards for making purchases using Credit.

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