Indian fintech giant PhonePe’s valuation more than doubles to over $12 billion in new funding round Get ready for life without parent company Flipkart. The Bengaluru-based startup says it has raised $350 million and expects to raise up to another $650 million in the round, a remarkable feat at a time when global fundraising is fueled by investments. Those who become cautious and slow down.
General Atlantic led the first investment. The company has not named the round, but said it is valued at $12 billion pre-money. TechCrunch reported last month that PhonePe was closing a large funding round at a pre-money valuation of $12 billion.
$12 billion is a staggering valuation for PhonePe, Worth $5.5 billion by the end of 2020. PhonePe currently generates less than $450 million in annual revenue. Publicly traded rival Paytm, which is expected to generate $1 billion in revenue for the fiscal year ending March 2023, has a current market capitalization of $4.2 billion.
Walmart is a lead investor in PhonePe and is expected to participate in the round, according to people familiar with the matter.
To be sure, PhonePe is the clear leader in the mobile payments market with UPI, a network established by the Retail Banking Federation of India. UPI has become the most popular way for Indians to transact online, processing over 7 billion transactions per month. Seven-year-old PhonePe controls about 40% of all those deals. The startup says it has more than 400 million registered users and more than 35 million offline merchants rely on the platform.
One concern over PhonePe’s growth is that Indian regulators have imposed market capitalization checks on every participant, but the deadline for the new guidelines was extended last month and now Not effective until 2025Let PhonePe experience another two years of rapid growth.
“I would like to thank General Atlantic and all of our existing and new investors for their trust in us. PhonePe is proud to help lead the digitization efforts across India and believes this strong public-private partnership has made the Indian digital ecosystem a global model. We are an Indian company, founded by Indians, and our recent fundraising will help us further accelerate the Indian government’s vision of digital financial inclusion for all,” said PhonePe founder and CEO Sameer Nigam in a statement.
“We look forward to the next phase of growth by investing in new business verticals such as insurance, wealth management and lending, while also facilitating the next wave of growth in UPI payments in India.”
PhonePe was founded in 2015 and was acquired by e-commerce giant Flipkart within a year. The two companies parted ways last month and now Flipkart no longer owns a stake in the payments company. The spin-off will have some impact on Flipkart’s valuation. Last July, Flipkart Group raised $3.6 billion at a valuation of $37.6 billion. Flipkart has no plans to re-enter the mobile payments market, TechCrunch reported earlier.
PhonePe said it would use the new funds to make major investments in infrastructure, including developing data centers and building more financial services. The company also plans to invest in new businesses, including insurance, wealth management and lending.
“Sameer, Rahul and the PhonePe management team are pursuing a clear mission to drive the digitization of payments and significantly expand access to financial tools for the people of India. They remain focused on driving the adoption of inclusive products developed with an ‘India stack’ based on open APIs. This The vision is aligned with General Atlantic’s long-term commitment to supporting high-growth businesses focused on inclusion and empowerment,” said Shantanu Rastogi, Managing Director and Head of India, General Atlantic, in a statement. “We are excited to partner with the PhonePe team to help enable the next generation of digital innovation in India.”