PhonePe revenue rises 77% to Rs 2,914 crore in FY23, loss widens on higher ESOP costs

PhonePe

Walmart-owned fintech unicorn PhonePe on October 18 reported a consolidated revenue of Rs 2,914 crore in the financial year ending March 2023, up nearly 77 percent from Rs 1,646 crore in FY22, mainly due to its expansion within the digital payments space.

"Revenue growth was also driven by the launch and scale-up of new products and businesses such as Smart Speakers, Rent Payments, and Insurance Distribution. For example, As of 31st Aug 2023, Smart Speaker deployment stands at 4.1 million," PhonePe said in a statement.

PhonePe's standalone PhonePe India Pvt Ltd entity, which houses its Payments business, recorded an operating loss of Rs 1,755 crore in FY23, up from Rs 1,612 crore in FY22.

However, PhonePe's adjusted earnings before interest, tax, depreciation, and amortization (Ebitda) excluding employee costs stood at Rs 159 crores in profit as against a loss of Rs 455 crores in FY22.

"Substantial ESOPs were granted in FY23 towards the corporate restructuring and as one-time rewards for setting up and incentivizing new business," PhonePe's statement said.

PhonePe's UPI Total Payments Value (TPV) market share stood at 50.54% as of March 2023, the statement said.

PhonePe, valued at $12 billion, processed nearly 5 billion transactions in a month for the first time in the May-July quarter. It also logged an annualized total payments volume of $1.15 trillion, a top executive of the American retail major said in an earnings call held on 18 August 2023.

In FY23, the firm was hived off from Walmart-owned Flipkart as a separate company last year. The fintech startup is now preparing to list in India.

"We concluded an equity fundraising of Rs  7,021 crores from long-term investors like General Atlantic, Walmat, Ribbit Capital, TVS Capital Funds, and Tiger Global, pegging PhonePe at a $12 Bn pre-money valuation as of FY23," The firm said.

PhonePe has been launching new services and products.

In June, PhonePe announced the launch of its Account Aggregator (AA) services through its wholly-owned subsidiary, PhonePe Technology Services Pvt. Ltd. (PTSPL). An account aggregator is an RBI-regulated entity that helps individuals access and share their financial information digitally after obtaining their consent. PhonePe had received in-principle approval for the NBFC-AA license in 2021.

In July, PhonePe launched its Point-of-Sale (POS) device, which allows merchants to accept payments via debit cards, credit cards, and UPI. This move makes PhonePe a complete offline payment service provider.

On June 14, PhonePe launched its online payment gateway to serve MSME (Micro, Small, and Medium Enterprises) merchants across the country. It also launched its merchant lending platform, which allows banks and NBFCs to provide access to credit in a completely digital and seamless manner to PhonePe's vast base of over 35 million merchants.

PhonePe in August marked its entry into the stock broking business with the launch of its app called "Share.Market" as a direct competition to players like Zerodha and Groww.

PhonePe's direct rival Paytm reported consolidated revenue from operations which jumped 61 percent YoY to Rs 7,990 crore in FY23.