PhonePe raises $100 Mn additional funding from General Atlantic

Fintech platform PhonePe has raised an additional $100 million from General Atlantic which had initially invested $350 million in the company in January 2023. This takes the total fundraise by the Bengaluru-based decacorn to $750 million in the past three months.

The latest funding comes as a part of PhonePe’s $1 billion round following its domicile shift to India last year. Like previous tranches, PhonePe has raised the new money at a pre-money valuation of $12 billion. PhonePe is the third most privately valued company in the country after Flipkart and Byju’s. It’s worth highlighting that Byju’s valuation was recently cut by 50% by its investor, BlackRock.

The development has come just after its foray into online commerce with the launch of Pincode which is a hyperlocal consumer app linked to the Open Network For Digital Commerce (ONDC) protocol.

According to the company, it will use proceeds to scale up its payments and insurance businesses in India, as well as to launch and aggressively scale new businesses like lending, stockbroking, ONDC, and account aggregators over the next few years.

PhonePe is targeting to turn its core business profitable in 2023 and is betting big on lending, cross-sell opportunities, gateway business, and now e-commerce. However, as per the previous year’s data, PhonePe’s revenue spiked 2.4X to Rs 1,646 crore 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 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.

With over 400 million registered users, PhonePe claims to hit an annualized TPV (Total payment value) run rate of $1 trillion (Rs 84 lakh crore approximately). It also leads the UPI space where it holds over 50% market share by value. Its competitors Google Pay and Paytm are far behind in terms of transaction volume and value.