PhonePe raises $100 Mn more in ongoing round

Digital payments platform PhonePe has raised another $100 million in primary capital from Ribbit Capital, Tiger Global, and TVS Capital Funds, at a pre-money valuation of $12 billion. This new investment follows the recent $350 million primary fundraise that closed on January 19.

With this second tranche, it has already raised $450 million within six weeks from leading investors. The company expects further investments from leading global, as well as prominent high net worth Indian investors soon. PhonePe targets to raise up to $1 billion in this round.

PhonePe plans to deploy these funds to scale up its payments and insurance businesses in India, as well as to launch and aggressively scale new businesses like lending, stockbroking, ONDC-based shopping, and account aggregators over the next few years, the company said in a press release.

“We are excited to continue our partnership with PhonePe as they lead the digital payments sector in India, a market we believe is still in the early stages with significant growth potential ahead,” said Scott Shleifer, Partner, Tiger Global. It’s worth mentioning that Tiger has not invested in any startup in 2023 so far.

With over 400 million registered users, PhonePe claims to have digitised over 35 million offline merchants spread across smaller cities. In terms of UPI transactions, it controls more than 45% market share followed by Google Pay and Paytm.

PhonePe’s scale spiked 2.4X to Rs 1,646 crore in FY22 from Rs 690 crore in FY21. The firm’s losses grew only 16.5% to Rs 2,014 crore during the last fiscal year.

The Walmart-owned company has further improved its balance sheet and has recorded Rs 1,913 crore in revenue in the first nine months (January to September) of 2022, according to its valuation report accessed through a regulatory filing. At this rate, PhonePe is likely to surpass its FY22 numbers in the ongoing fiscal year (FY23).

PhonePe became a fully India-domiciled company after its complete hive-off from Flipkart. According to the company, its investors had to pay Rs 8,000 crore in taxes to the Indian government after it shifted its domicile from Singapore to India.