At the Moneycontrol Startup Conclave, Sameer Nigam, CEO of PhonePe, shared insightful perspectives on the company's evolution, the challenges of the fintech industry, and its future roadmap. The conversation shed light on the company’s decision-making process, strategic focus, and approach to navigating India’s complex regulatory landscape.
The discussion started with whether PhonePe could be called a super app, and Mr Nigam was clear: the super app model isn’t the right fit for India. He explained that unlike platforms in other countries, like China, that bundle multiple services into one app, the Indian market prefers dedicated apps serving specific needs.
For example, if Indians need a ride, they turn to Uber; for food delivery, it’s Zomato. There's a clear compartmentalisation in app usage in the country. Rather than striving to be everything in one place, PhonePe's focus has been on simplifying the payment experience, ensuring users can complete transactions quickly and efficiently within an average of 7 seconds, to be precise. This philosophy led to the development of an app designed for minimal interaction time, where users can make payments and move on without being subjected to upselling or cross-selling tactics.
PhonePe has restructured its organisation into separate companies, each with its CEO, to further streamline its operations and maintain focus. This move has allowed the company to manage its various services, such as personal loans and insurance, more effectively under the umbrella of the PhonePe Group of Companies, a conglomerate of sorts, instead of an all-in-one super app.
In the next question, we shifted our focus to the regulatory bodies in the fintech sector, to which Sameer Nigam praised the National Payments Corporation of India (NPCI), which has helped bring many payment companies closer to profitability by urging the government to increase subsidies. PhonePe is also on the verge of reaching profitability at a consolidated level, with its 2024 financials expected to reflect this progress.
As PhonePe explores new revenue streams, such as value-added services, including smart speakers, it continues to seek ways to enhance its profitability while delivering value to its users.
According to Nigam, operating in fintech means dealing with an ever-evolving regulatory environment. PhonePe has embraced this reality, recognising that regulations are inevitable and necessary for formalising business practices, solidifying business models, and refining strategies.
Moving on to the stock broking sector, PhonePe has witnessed remarkable growth since launching its trading platform. The company has experienced a substantial increase in daily orders, reflecting a strong interest from users across the country. During this conversation, Mr. Nigam shared a data point with us - before launching F&O, PhonePe’s trading platform had less than 20,000 orders a day. Now, they’re seeing 600,000 orders daily from all over the country—a 30x increase. Meanwhile, PhonePe’s Pincode initiative, in collaboration with the Open Network for Digital Commerce (ONDC), is gradually building momentum.
Finally, when asked about PhonePe's IPO plans and why more tech IPOs are happening from Delhi rather than Bangalore, Nigam remained optimistic. He claimed that PhonePe is committed to listing in India once it achieves sustainable profitability. Also, while tech IPOs from Delhi-based companies have become more common, Bangalore’s dynamic startup ecosystem is rapidly maturing. Mr Sameer Nigam is confident that many exciting regional companies will soon be ready for public listings.
With a clear focus on profitability, innovation, and navigating the regulatory landscape, PhonePe is poised to remain a key player in the fintech industry.
Watch the second edition of the Moneycontrol Startup Conclave right here.
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