PhonePe raises another $200 mn in ongoing funding from its largest shareholder Walmart

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Digital payments and financial services unicorn PhonePe has raised another $200 million in its ongoing proposed $1 billion funding round from its largest shareholder Walmart at a pre-money valuation of $12 billion.

In January, PhonePe announced raising $1 billion in tranches at a valuation of $12 billion. Since then, the fintech unicorn has raised $350 million from General Atlantic and $100 million Tiger Global Management, Ribbit Capital and TVS Capital. The company expects further investments, which will be announced in due course, it said in a statement on March 17.

Moneycontrol first reported in October about PhonePe eyeing new fundraising 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.

"We would like to thank Walmart, our majority investor, for their continued support of our long-term aspirations. We are excited about the next phase of our growth as we build new offerings for Indian consumers and merchants, along with enabling financial inclusion across the nation," said Sameer Nigam, co-founder, CEO, PhonePe.

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.

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 $4.7 billion as of Mach 17.