We need to grow first: Sameer Nigam on whether PhonePe will become a bank

Sameer Nigam, PhonePe

Digital payments decacorn PhonePe aspires to become a bank, but it is in no hurry, said founder and CEO Sameer Nigam. He added that PhonePe is aiming to become a full-fledged financial services super app.

Answering a question at a CNN News18 Townhall in Bengaluru on whether PhonePe would ever become a bank, Nigam said that the company first needs to mature and grow to a different level to become a bank.

“We need to grow on a whole different level — we have not grown enough. We are a seven-year-old tech startup — you don’t wanna put deposits in our bank right now. The answer may change in 10 years, but we are not there yet,” Nigam said.

According to data released by the National Payments Corporation of India (NPCI), PhonePe continues to be the top player in the Indian payments ecosystem and accounted for nearly 50 percent of all UPI transactions processed in December 2022.

“When we started, we never thought we would be an insurance broker or a mutual fund distributor. We did not think something like ONDC (Open Network for Digital Commerce — a government-backed local commerce network) would emerge, so I’ll say, I don’t know if I can answer today on becoming a bank,” he said.

Focus on India

Last October, the Walmart-owned startup announced that it completed the process of moving its domicile from Singapore to India.

“The mission we are on is to solve for at-scale financial inclusion, digitisation, ecosystem building … India is where we started and India is where we will focus, going ahead,” Nigam had said at the time.

PhonePe had recently raised $350 million in a new funding round from General Atlantic, at a valuation of over $12 billion, making the startup the most-valued fintech in India.

The $350 million fundraising follows the company’s spin-off from e-commerce startup Flipkart, which was announced in December. The spin-off also completes PhonePe's transition to a fully Indian-domiciled company, a move that started in 2022.

PhonePe had a revenue of Rs 1,646 crore in FY22 and it reported a loss of Rs 2,014 crore in FY22 (2021-22), which widened from Rs 1,729 crore in FY21 (2020-21).