PhonePe raises another $100 mn from Tiger Global, others at $12 bn valuation

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Digital payments and financial services unicorn PhonePe has raised another $100 million as a part of its ongoing larger funding round from Tiger Global, Ribbit Capital and TVS Capital, just weeks after announcing a $350 million primary infusion from General Atlantic that made the company India's most-valued fintech.

Moneycontrol first reported in October about PhonePe eyeing a new fundraise from General Atlantic and others at a valuation of $12 billion.

PhonePe’s fundraise follows the company’s spin-off from e-commerce major Flipkart, which was announced in December. The Flipkart spin-off also completes PhonePe's transition to a fully Indian-domiciled company, which began in 2022.

The company said that it plans to deploy these funds to scale up its payments and insurance businesses in India, as well as to launch and aggressively scale new businesses like lending, stockbroking, ONDC (open network for digital commerce)-based shopping and account aggregators over the next few years.

PhonePe's lending forays come at a time when the Reserve Bank of India (RBI) and the Ministry of Electronics and Information Technology (MeiTY) have cracked down on digital lending apps.

At the CNN News18 Town Hall event in Bengaluru last week, Sameer Nigam, co-founder and CEO of PhonePe, said that app bans are happening because the government is seeing a genuine problem as citizens complained about Chinese lending apps.

PhonePe's fundraise comes at a time when its closest competitor, Paytm, has seen its valuation drop by over 50 percent since it went public in November 2021, prompting public shareholders to question the company's ability to attain company-level profitability. Paytm's total market capitalisation was just over $5.2 billion as of February 14.

Founded in 2015 by former Flipkart executives Nigam, Rahul Chari, and Burzin Engineer, the fintech has over 400 million registered users and is the market leader in Unified Payments Interface (UPI) transactions. In terms of monthly UPI volumes, the company has a 47 percent market share.

In 2017, the company expanded into financial services, allowing customers to buy gold, insurance, and mutual funds on its platform in addition to making bill and utility payments.

In the last year, PhonePe has acquired GigIndia, WealthDesk, OpenQ, and completed the long-awaited acquisition of IndusOS.