PhonePe sees 85% jump in revenue, 44% drop in losses for FY21

Digital payments and financial services leader PhonePe reported a drop of 44 percent in losses for the financial year 2021 (FY21) as compared to the previous fiscal. Operational losses, excluding the Employee Stock Ownership Plan (ESOP), costs stood at Rs 888 crore in FY21 versus Rs 1,570 crore in FY21, according to regulatory filings by the company.

The drop in losses is attributable to the reduction in operational costs as well as a significant rise in revenues. The Bengaluru-based company’s revenue jumped from Rs 372 crore in FY20 to Rs 690 crore in FY21.

The 85 percent year-on-year (YoY) revenue growth was led by a sharp rise in transactions on the platform as the company executed a dominating share transaction on United Payment Interface (UPI) and Bharat Bill Payment System (BBPS).

Gross margins grew from 60 percent to 84 percent (YoY). The Walmart-owned company also issued the highest ever ESOP to employees in the year at Rs 843 crore, up from Rs 206 crore in FY20.

If the ESOP costs are taken into consideration for both years, the operational losses are flat in comparison to FY20.

PhonePe makes up 45 percent of UPI monthly volumes and 47 percent of the monthly value of transactions. The latest data shared by the National Payments Corporation of India (NPCI) on BBPS for August showed that PhonePe leads the market with a 49 percent volume share.

Digital transactions also picked up in FY21 as customers turned to online payments amid the COVID-19 pandemic and subsequent lockdowns. PhonePe became a preferred platform among users during this period and turned a market leader in UPI payments in December 2020, beating Google Pay. In March this year, PhonePe became the first UPI player to cross $1 billion in transactions in a month.

Founded in 2015 by former Flipkart executives Sameer Nigam, Rahul Chari, and Burzin Engineer, the company has over 300 million registered users. Apart from payments, the platform also offers insurance, gold purchasing, and mutual fund services.