Payments and financial services platform PhonePe saw a 138 percent jump in revenues in FY22 to Rs 1,646 crore as compared to the previous financial year owing to growth across all businesses, the company said on October 18. The surge in revenues comes ahead of the company's plans to list on Indian stock exchanges.
The Walmart and Flipkart-owned company's losses excluding Employee Stock Ownership Plan (ESOP) costs reduced to Rs 671 crore in the year, as compared to 789 crore in FY21.
Despite a surge in revenues, losses did not narrow drastically owing to an increase in costs, mainly marketing costs. PhonePe spent Rs 866 crore on marketing, up by 62 percent as compared to Rs 535 crore last year.
The company said that the surge in marketing expenses is largely attributable to the marketing campaign for its new insurance distribution business during the ICC Cricket World Cup in 2021, and again during the Indian Premier League (IPL) in 2022.
PhonePe's employee costs surged by 41 percent from Rs 393 crore in FY21 to Rs 555 crore in FY22, owing to rapid hiring for building future product lines including insurance, wealth services, and others.
Other operating expenses increased by 57 percent from Rs 443 crore in FY21 to Rs 697 crore in FY22.
Contribution margins, i.e. revenues minus payment charges more than doubled from Rs 582 crore in FY21 to Rs 1,447 crore in FY22.
PhonePe was founded in 2015 by former Flipkart executives Sameer Nigam, Rahul Chari and Burzin Engineer, the company has over 400 million registered users with a leadership in Unified Payments Interface (UPI) transactions. The company has a market share of 47 percent in monthly UPI volumes.
The company expanded into financial services in 2017 and allows customers to purchase gold, insurance and mutual funds on its platform, besides making bill and utility payments.
Moneycontrol reported on September 5 that PhonePe has begun work to launch its own payment gateway as an extension to its current Quick Response (QR) Code-based UPI payment service and in-app payments.
The company will be competing with the likes of Paytm, Pine Labs and Razorpay as it may look at targeting large offline players as well as small and medium businesses to offer its payment gateway to.
In the past year, PhonePe acquired GigIndia, WealthDesk, OpenQ and closed the long pending acquisition of IndusOS.
The company also announced that it has moved its domicile from Singapore to India ahead of its plans to launch an initial public offering (IPO).
In an interview for CNN News18’s Bits to Billions in June, PhonePe co-founder and CEO Sameer Nigam had revealed that the company is in the process of moving its registered entity from Singapore to India. He had said that the board had already signed off on the plan and the completion of the process was only a matter of time.
"We are a made in India company. Every office, data centre, and employee of ours is here. There is no reason why we should not contribute to wealth creation in this market," Nigam had said.
The company plans to go public once its core businesses turn profitable, which it hopes to achieve by 2023.
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