Embedded credit fintech companies are raising funds to expand their market share

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BharatX, an embedded finance startup, has raised US$ 4.5 million in seed funding from Y Combinator, 8i Ventures, Multiply Ventures, Soma Capital, and other investors. It has raised US$ 250,000 in a pre-seed round from angel investors in December 2021. Investors from various companies such as Arash Ferdowsi (Co-founder, Dropbox), Harshil Mathur (CEO & Co-Founder, Razorpay), Shashank Kumar (Founder, Razorpay), Varun Alagh (Co-founder & CEO, Mamaearth), Kunal Shah (Founder and CEO, CRED), Ankur Aggarwal (Co-founder, Dunzo), Vikas Choudhury (President, Reliance Jio) also participated in the seed round.

BharatX is a Bengaluru-based embedded credit startup founded by Mehul Nath Jindal, Eeshan Sharma, and Shyam Murugan, graduates of the National Institute of Technology (NIT) Trichy in 2019. The company aims to provide financial services on non-financial consumer-facing websites such as OTT platforms, e-commerce portals, etc. This way, the company can provide easy finance options instead of developing a financial arm. For instance, if a consumer is looking for a product on an e-commerce site such as Amazon or Flipkart, he can opt for the down payment, multiple EMIs, and pay later options at checkout provided by embedded finance fintech companies.

BharatX offers embedded credit options for users to access easy loans on third-party non-finance websites. It offers to Buy Now Pay Later and other credit options on more than 50 non-finance consumer-facing platforms. Since its inception, BharatX has been partnered with around 50 brands across India and provided zero credit risk & zero operational hurdles. It claims to grow more than ten times in volume in the last four months. Their Business-to business-to-consumer model allows the company to gain users' trust via the brand power of the players they are working along with the reach to millions of other customers at zero cost.

CEO and Co-founder of BharatX, Mehul Jindal, said, "we want to provide consumers of India a better class of credit products that they deserve but are not available. Most players in the market have low credit eligibility approval rates, long documentation processes, and unethical collection procedures. We want to give the middle-class consumers easy access to credit products".

This raised fund is used to expand the team, enhance the product, and market expansion. BharatX plans a 45-55% credit approval rate, which is almost four times the market standard. It plans to expand its credit stack by launching new product verticals such as Pay in 3, UPI Credit, and 15 or 30-day cycle products like credit cards. The Pay in 3 feature can capture new consumers as it allows a consumer to split a high transaction into three equal interest-free instalments.

The embedded finance market, which consists of embedded insurance, embedded lending, and embedded payments, has been growing exponentially. It is expected to reach around US$ 7.2 trillion by the year 2030. With a shift in consumers' preference toward digitalization, embedded finance fintechs are gaining popularity. BharatX is competing with key market players in the industry, such as M2P, Niro, Rupifi, FundFina, and Falcon.

To know more and gain a deeper understanding of the embedded finance industry in India, click here.