The Busy Brains
26 May 2023
PhonePe, India's top fintech startup, has received an additional $100 million investment from General Atlantic, increasing the total funds raised in the current round to $850 million. With plans to utilize the funds for new business ventures, PhonePe aims to strengthen its position as a leading fintech platform in India.
PhonePe, India's privately held fintech startup and one of the most valued companies in the sector, has recently secured an additional $100 million investment from General Atlantic. This investment contributes to the ongoing financing round, bringing the total funds raised to $850 million. PhonePe's ambitious fundraising efforts come amidst a funding slowdown in the startup ecosystem due to global economic challenges. The company aims to raise up to $1 billion from investors, given its pre-money valuation of $12 billion.
General Atlantic's latest investment in PhonePe reflects their confidence in the company's business model and growth potential. Notably, other prominent investors such as Tiger Global, TVS Capital Funds, and Ribbit Capital have also participated in the ongoing funding round, which commenced in January. PhonePe intends to utilize the fresh capital to venture into new businesses, including insurance, open network for digital commerce (ONDC)-based shopping, wealth management, and lending. The company has already established its presence in the ONDC landscape with the launch of its local commerce app, Pincode.
PhonePe's journey under Walmart began with the acquisition of Flipkart in 2016. Initially a startup founded by former Flipkart employees, PhonePe was acquired for $20 million. Since then, PhonePe has experienced significant growth, with over one in four Indians using the app and more than 35 million offline merchants onboarded across the country. In December 2020, Walmart decided to invest directly in PhonePe, leading to the separation of the two businesses. Flipkart transferred its stake in PhonePe to Walmart, resulting in PhonePe becoming a fully India-domiciled company. The strategic shift was further solidified by PhonePe relocating its headquarters from Singapore to India in three phases. This move aligned with PhonePe's aspirations in the banking sector and its mission to provide financial inclusion to billions of Indians.
In March 2023, PhonePe, along with Google Pay and Paytm, dominated India's UPI payments space, processing 94% of payments. These three apps accounted for nearly 96% of all UPI transactions by value, amounting to 841.91 crore transactions worth INR 13.44 lakh crore. UPI experienced record-breaking growth, handling 868.5 crore transactions worth INR 14.1 lakh crore, marking a 15.33% increase in transactions and a 14.1% surge in transaction value compared to the previous month. PhonePe remained the top UPI app, capturing a 46.38% market share in transaction count and 49.45% in transaction value, processing 407.63 crore transactions worth INR 7.07 lakh crore.
As PhonePe continues to expand its services, users can anticipate new offerings and enhanced features. The company's commitment to financial inclusion and investment in new businesses will create more opportunities for users to access a wide range of financial services. With a strong presence in the Indian market and support from major investors, PhonePe is well-positioned to sustain its growth trajectory and maintain its status as a leading fintech platform in the country. Users can expect an ever-evolving and expanding range of financial services, driven by the company's dedication to innovation.