PhonePe’s valuation has more than doubled to over $12 billion in a new funding round as the Indian fintech giant readies for life without parent firm Flipkart. The Bengaluru-headquartered startup said it has raised $350 million and anticipates raising up to another $650 million as part of the round.
General Atlantic led the first tranche of the investment. The company has not assigned a name to the funding round, but said it was valued at $12 billion pre-money. TechCrunch reported last month that PhonePe was finalizing a large funding round at $12 billion pre-money valuation.
$12 billion is a staggering valuation for PhonePe, which was valued at $5.5 billion in late 2020. PhonePe currently does less than $500 million in annual revenue. Publicly-traded rival Paytm, which expects to hit $1 billion in revenue in the financial year ending March 2023, currently has a market cap of $4.2 billion.
PhonePe is a clear leader in the the mobile payments market on UPI, a network built by a coalition of retail banks in India. UPI has become the most popular way Indians transact online, processing over 7 billion transactions a month. Seven-year-old PhonePe commands about 40% of all these transactions.
A concern for PhonePe’s growth was Indian regulator enforcing a market cap check on each player, but the deadline for the new guidelines was extended last month and now won’t come into effect until 2025, giving PhonePe another two years of fast-growth.
“I would like to thank General Atlantic and all our existing and new investors for the trust they have placed in us. PhonePe is proud to help lead India’s country-wide digitization efforts and believes that this powerful public-private collaboration has made the Indian digital ecosystem a global exemplar. We are an Indian company, built by Indians, and our latest fundraise will help us further accelerate the Government of India’s vision of digital financial inclusion for all,” said Sameer Nigam, Founder and CEO at PhonePe.
“We look forward to delivering the next phase of our growth by investing in new business verticals like Insurance, Wealth Management and Lending, while also facilitating the next wave of growth for UPI payments in India.’’
More to follow
