PhonePe, a leading Indian fintech platform, has secured an additional $100 million in funding from General Atlantic and its co-investors as part of its ongoing $1 billion round. This latest investment brings General Atlantic’s total investment in the company to $550 million, valuing PhonePe at $12 billion.
With a significant market share in the Unified Payments Interface (UPI) transactions market and over 450 million registered customers, PhonePe is poised for growth in various industries. The company plans to go public in 2024–2025 and raise further funds.
Fundraising and Spin-off
In January, PhonePe announced its plan to raise $1 billion in installments, with a valuation set at $12 billion.
Since then, the fintech unicorn has raised $550 million from General Atlantic, $100 million from Tiger Global Management, Ribbit Capital, and TVS Capital, and $200 million from its largest stakeholder, Walmart. This brings the total funding raised by the company this year to $850 million.
The fundraising effort by PhonePe follows its spin-off from the prominent e-commerce company Flipkart in December. As part of its capital growth fundraising campaign, the fintech startup aims to raise $2 billion.
Furthermore, the spin-off from Flipkart signifies PhonePe’s complete transition to an Indian-domiciled business. PhonePe announced its relocation to India at the beginning of 2023. The company’s primary goal in returning to India is to invest in new industries like lending, insurance, and wealth management.
PhonePe’s Market Presence and Dominance
The fintech company, established in 2015 by former Flipkart executives Burzin Engineer, Rahul Chari, and Nigam, has more than 450 million registered customers and dominates the Unified Payments Interface (UPI) transactions market. The corporation has a 47 percent market share in monthly UPI volumes.
According to the company, one in four Indians now uses PhonePe. Furthermore, the organization has successfully digitized 35 million (3.5 crores) offline business owners in tier 2, 3, and 4 cities. The business competes vigorously in the Bharat Bill Pay System (BBPS), which handles over 45 percent of all BBPS transactions.
In addition to bill and utility payments, the company’s platform enabled consumers to purchase gold, insurance, and mutual funds in 2017. This expansion into financial services took place in 2017.
The company had previously stated that it intended to use these funds to launch and quickly scale new businesses like lending, stockbroking, ONDC (open network for digital commerce)-based shopping, and account aggregators over the following few years, as well as to expand its payments and insurance businesses in India.
To boost its excursions into e-commerce, Pincode, a new consumer-facing application, was formally launched in April.