PhonePe’s valuation has more than doubled to more than $12 billion in a new round of funding as the Indian fintech giant prepares for a life without parent company Flipkart. The Bengaluru-headquartered startup said it has raised $350 million and expects to raise another $650 million as part of the round.
General Atlantic led the first tranche of the investment. The company has not named the funding round. The startup said it was valued at $12 billion pre-money in the new round.
$12 billion is a staggering valuation for PhonePe, which was valued at $5.5 billion at the end of 2020. PhonePe currently generates less than $500 million in annual revenue. Publicly traded rival Paytm, which projects revenues of $1 billion in fiscal year ending March 2023, currently has a market cap of $4.2 billion.
PhonePe is a clear leader in the mobile payment market on UPI, a network built by a coalition of retail banks in India. UPI has become the most popular way for Indians to transact online, processing over 7 billion transactions per month. The seven-year-old PhonePe manages about 40% of all these transactions.
One concern for PhonePe’s growth was that the Indian regulator imposed a market cap check on every player, but the deadline for the new guidelines was extended last month and will now not take effect until 2025, giving PhonePe another two years can grow quickly.
“I would like to thank General Atlantic and all of our existing and new investors for the trust they have placed in us. PhonePe is proud to help lead India’s digitization efforts nationwide and believes that this powerful public-private partnership has made India’s digital ecosystem a global example. We are an Indian company, built by Indians, and our latest fundraising will help us further accelerate the Government of India’s vision of digital financial inclusion for all,” said Sameer Nigam, Founder and CEO of PhonePe.
“We look forward to delivering the next phase of our growth by investing in new business lines such as insurance, asset management and lending, while also enabling the next wave of growth for UPI payments in India.”
More to follow