PhonePe, India’s most valuable fintech startup, has raised $650 million in recent weeks despite the market slump, as the Indian fintech giant bulks up its war chest following the separation from the parent firm Flipkart. Walmart, which owns the majority of PhonePe, has invested $200 million into the startup. The ongoing round values the Bengaluru-headquartered PhonePe at a pre-money valuation of $12 billion. PhonePe plans to raise up to $1 billion as part of the ongoing financing round.
At a $12 billion valuation, PhonePe is India’s most valuable fintech startup, competing with Google Pay and Paytm. PhonePe dominates transactions on UPI, a network built by a coalition of retail banks in India. UPI is the most popular way Indians transact online, processing more than 8 billion transactions a month, with PhonePe commanding about 50% of all these transactions.
In the first nine months of 2022, PhonePe clocked a revenue of $234.3 million. The firm projects a revenue of $325 million for the calendar year 2022 and $504 million for 2023. Industry experts reckon that PhonePe’s end game might be to become a bank, which justifies its lofty valuation. PhonePe is slowly becoming a distribution engine, leveraging a large user base of 300 million to cross-sell products such as insurance.
The recent enforcement of a check on the market cap on each participating player by the Indian regulator was a concern for PhonePe’s growth. Still, its recent extension to the deadline until 2025 has paved the way for the startup for another two years of fast growth. Google’s GPay and PhonePe currently process more than 80% of all UPI transactions.
PhonePe is also planning to deploy the funds to build and scale wealth management, lending, stockbroking, ONDC-based shopping, and account aggregator businesses. PhonePe’s financials and metrics from the valuation report have not been previously reported.
In conclusion, PhonePe’s current funding round is a testament to its potential in the Indian fintech market. PhonePe’s dominance on UPI and the plan to become a distribution engine only adds to its growth potential. With its user base of 300 million and its aim to cross-sell products such as insurance and diversify into wealth management and lending, the future looks promising for PhonePe in the Indian fintech market.#Walmart #invests #million #Indian #mobile #payments #giant #PhonePe