PhonePe crossed 10 billion transactions in Sept quarter for first time: Walmart

PhonePe co-founders Rahul Chari and Sameer Nigam

Fintech major PhonePe crossed 10 billion quarterly transactions for the first time in the September quarter while its annualised total payments volume has crossed $920 billion, Walmart said in an earnings call on November 15.

“PhonePe also continues to perform well with annualised total payment volume at $920 billion and reaching a record level of monthly transactions to about $3.6 billion. This was the first time PhonePe had a quarter with more than 10 billion transactions,” Walmart's chief financial officer said in a post-earnings analyst call.

Data from NPCI shows that the lion’s share of the 10 billion transactions in Q3 — or 9,358 million — was on account of united payments interface (UPI) transactions. During the quarter, PhonePe commanded a 45 percent market share of the UPI volumes and 47 percent of the value of total UPI transactions.

Meanwhile, the company has also started testing its own payment gateway as an extension to its current Quick Response (QR) Code-based UPI payment service and in-app payments.

Moneycontrol earlier reported that the Walmart-owned fintech is in talks to raise a new round of funding led by General Atlantic at a valuation of over $12 billion, in what would make the Walmart-backed startup the most-valued fintech in India.

If the round goes through, PhonePe will use the funds raised to double down on its ambitions to become a financial services super app - offering everything from payments to insurance to investments to commerce. Also, it will become a decacorn or a startup valued at over $10 billion, joining the likes of Flipkart, which was acquired by Walmart, Paytm (which went public last year), Byju’s and Swiggy.

PhonePe’s valuation will also surpass that of digital payments and neobanking unicorn Razorpay, which was last valued at about $7.5 billion.

Moreover, the fintech major has moved its registered entity from Singapore to India ahead of its plans to launch an IPO here.

It saw a 138 percent jump in revenue in FY22 to Rs 1,646 crore as compared to the previous financial year owing to growth across all businesses, the company said last month. 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 a 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.