PhonePe, a Walmart-owned fintech platform, has raised an additional $100 million from private equity firm General Atlantic and its co-investors. In January 2023, General Atlantic invested its initial $350 million in the business.
The Bengaluru-based decacorn has raised $750 million over the last three months. The most recent fundraising is a part of PhonePe’s $1 billion round, which followed the company’s relocation to India last year. Similar to earlier tranches, PhonePe valued the fresh funding at $12 billion before closing.
After Flipkart and Byju’s, PhonePe has the nation’s third-highest privately held company worth. It’s important to note that Byju’s investor, BlackRock, has reduced its valuation by 50 percent.
The financial platform has previously received $200 million in primary financing from Walmart and $100 million in venture money from Ribbit financing, Tiger Global, and TVS money Funds in February.
According to the company’s comments, over the next few years, it will use the fresh funds to create and build new businesses like lending, stock broking, ONDC-based shopping, and account aggregators. It will also expand its payments and insurance businesses in India.
PhonePe is placing significant bets on financing, cross-sell potential, gateway business, and e-commerce to make its core business viable by 2023. Nevertheless, according to figures from the prior year, PhonePe’s sales increased 2.4X to INR 1,646 crore from INR 690 crore in FY21.
The company lost only 16.5 percent more than the previous fiscal year’s losses, or INR 2,014 crore. According to the company’s valuation report, which can be read through a regulatory filing, it has further strengthened its balance sheet and generated INR 1,913 crore in sales in the first nine months (January to September) of 2022.
PhonePe forays into e-commerce business
Sameer Nigam, Rahul Chari, and Burzin Engineer, ex-executives of Flipkart, launched PhonePe in 2015. In 2016, the firm formed by Sachin and Binny Bansal purchased PhonePe. Walmart bought Flipkart in 2018, and PhonePe was included in the deal.
After NGPay and FX Mart Pvt. Ltd, the digital payments startup, was Flipkart’s third significant acquisition in the industry at the time.
Earlier in April 2023, PhonePe made its first step into online shopping by introducing the “Pincode” consumer application. A government-backed attempt to democratize e-commerce in India, it is a buyer-side application on the Open Network for Digital Commerce (ONDC).
Pincode will be a hyper-local e-commerce platform linking buyers and sellers on the ONDC network. Only Bangalore is currently using the service.
With the help of the Pincode app, local merchants will be highlighted, and consumers will have digital access to all the area establishments they frequently visit in person.
The initial launch includes six categories, including food, consumables, medicine, fashion, electronics, and home decor. By the end of this year, PhonePe anticipates receiving one lakh orders daily.
According to the corporation, there are currently more than 400 million registered users. Approximately 35 million offline retailers in Tier 2, 3, and 4 cities and more cities have been effectively digitalized, according to the business, which has covered 99 percent of the country’s pin codes.