PhonePe raises $100 million in funding

15 Feb 2023 , 08:36 AM

At a pre-money valuation of $12 billion, the digital payments network PhonePe has raised an additional $100 million in primary funding from Ribbit Capital, Tiger Global, and TVS Capital Funds. The latest $350 million primary financing, which was completed on January 19, was followed by this fresh investment.

It has already raised $450 million with its second tranche in just six weeks from reputable investors. The company anticipates receiving additional funding soon from eminent high-net-worth investors in India as well as other developed nations. In this round, PhonePe hopes to raise up to $1 billion.

Over the next few years, PhonePe intends to use these funds to rapidly expand its existing operations, including lending, stockbroking, ONDC-based shopping, and account aggregators, as well as its payments and insurance businesses in India.

According to Scott Shleifer, Partner at Tiger Global who talked to Entracker, ‘We are thrilled to extend our association with PhonePe as they lead the digital payments sector in India, a business we believe is still in its early stages with enormous growth potential ahead.’ It’s important to note that Tiger has not yet made an investment in a firm in 2023.

PhonePe claims to have digitalized more than 35 million offline retailers located in smaller cities thanks to its more than 400 million registered users. It has a market share of more than 45% in UPI transactions, followed by Google Pay and Paytm.

From Rs690 crore in FY21 to Rs1,646 crore in FY22, PhonePe’s scale increased by 2.4X. The company’s losses for the most recent fiscal year increased by just 16.5% to Rs2,014 crore.

According to its valuation report, which can be obtained through a regulatory filing, the Walmart-owned company has further strengthened its balance sheet and generated Rs1,913 crore in sales in the first nine months (January to September) of 2022. If things continue as they are, PhonePe will probably beat its FY22 numbers this fiscal year (FY23).

Following its total separation from Flipkart, PhonePe acquired full Indian corporate citizenship. The company claims that after it changed its domicile from Singapore to India, its investors were required to pay the Indian government Rs8,000 crore in taxes.

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