Amid the global tech slowdown, digital payments company PhonePe has become the nation’s most valuable fintech company with a pre-money valuation of $12 billion, overtaking RazorPay, which is valued at $7.5 billion.
SOURCE- DECCAN HERALD
Digital payments company PhonePe said on Friday it had raised an additional $200 million from majority backer Walmart Inc as part of its ongoing fundraising target of up to $1 billion. It has helped it raise $650 million in recent weeks despite a lackluster market.
This additional investment by American retail behemoth follows a recent report, where during a conference call with institutional investors, Walmart CFO John David Rainey stated that India would be the company’s largest market in the world, surpassing China. He also said that Flipkart and PhonePe are the market leaders in India and the Indian e-commerce company has helped Walmart’s international operations. PhonePe parted ways with Indian e-commerce giant Flipkart last year. It also moved its headquarters from Singapore to Bangalore, India, during which time Walmart reportedly received a $1 billion tax bill.
“We are excited about the future of PhonePe and confident in how it continues to expand its offerings and deliver financial services to Indians at scale. India is one of the most digitized economies, dynamic and fastest growing in the world. “We are excited about the opportunity to continue to support PhonePe,” Judith McKenna, president and CEO of Walmart International, said in a statement.
PhonePe has also raised $350 million from private equity firm General Atlantic and $100 million from Ribbit Capital, Tiger Global and TVS Capital Funds in the past two months for the same $12 billion valuation. “
We would like to thank our lead investor, Walmart, for their continued support of our long-term vision. As we build new products for Indian consumers and merchants, said PhonePe co-founder and CEO Sameer Nigam, in a statement, and financial inclusion across the country, we are excited about the next phase of growth.
Where will the money be used
The start-up plans to deploy a portion of the newly raised funds to create and develop new businesses like insurance, wealth management, lending, stock-brokerage and ONDC based shopping. It also plans to earmark funds to bolster its UPI footprint. According to a statement released on Friday, the raised funding will aid PhonePe in turbo-charging the next wave of growth for UPI payments in India, including Credit on UPI and UPIlite.
PhonePe future projections
Led by Founder and CEO Sameer Nigam, PhonePe is the most valuable private start-up in fintech today. “We are excited about the next phase of growth as we design new products for Indian consumers and merchants and enable financial inclusion across the country,” Nigam said.
PhonePe dominates transactions on UPI, a network built by the Confederation of Indian Retail Banking. UPI is the most popular way for Indians to transact online – processing more than 8 billion transactions per month. Google’s GPay and PhonePe currently handle over 80% of all UPI transactions.
Seven-year-old PhonePe controls about 50% of all those transactions, and it’s not slowing down anytime soon. The company said last week that it was on track to process $1 trillion in transactions annually.