Flipkart’s UPI-based payment platform PhonePe has received $38.7 million in a fresh round of funding from its Singapore-based group entity Flipkart Payments Pvt. Ltd.
According to the filings with the Ministry of Corporate Affairs, the company raised the funding on 31 August through the allocation of 1.76 million equity shares at a subscription price of Rs 1,445.29 apiece, reports VCCircle.
The Bengaluru-based payment platform witnessed a 2X surge in the transaction in August as compared to May this year and has claimed to surpass the government’s Bharat Interface for Mobile or BHIM app with a 45 percent share of the total transactions processed in August.
PhonePe is also a strategic partner with YES Bank for its UPI app, and it is planning to launch new features through UPI 2.0. The new version will drive more usage of PhonePe while making payment at brick & mortar and online stores.
In December 2015, Sameer Nigam and Rahul Chari founded PhonePe, which was later acquired by Flipkart in April last year. Though it received its RBI licensing on 25 August 2014. It is essentially a payment system riding on UPI. But now it plans to cross-sell financial products across spectrums.
According to a report published in TOI, Flipkart-owned PhonePe was in the process of raising capital independently at a $500-million valuation. The fintech firm has held early discussions with the Naspers-backed global online payments giant PayPal Holdings.
Earlier, the firm had tied up with 25,000 merchants, to accept UPI payments through its app, which includes big names such as Apollo Pharmacy, Cafe Coffee Day, Barista and Spencer’s.
The company now claims to be the largest player using UPI for merchants and control close to 80 percent of all transactions.
Flipkart is only emulating global majors like Apple and Alibaba, which introduced their own integrated payment systems to provide wholesome consumer experience. And recent events like demonetisation, which boosted digital payments in the country, the stage for UPI like PhonePe is set to grow.