Four months after leading a $350 million investment in the Indian fintech startup, General Atlantic has invested another $100 million in PhonePe, which has so far raised $850 million in a funding round running at the height of a slowing global economy.
Walmart-backed PhonePe disclosed the investment in a statement on Monday. The Bengaluru-headquartered startup is valued at $12 billion in the ongoing round. PhonePe plans to raise another $150 million in the current round. General Atlantic last month invested another $100 million in PhonePe.
At a valuation of $12 billion, PhonePe is India’s most valuable fintech startup. It competes with Google Pay and Paytm, the latter of which is currently valued at around $5 billion.
PhonePe, which last year completed a full separation from e-commerce giant Flipkart, dominates transactions on UPI, a network built by a coalition of retail banks in India. UPI is the most popular way Indians transact online – it processes over 8 billion transactions a month. Google’s GPay and PhonePe currently process over 80% of all UPI transactions.
Seven-year-old PhonePe earns around 50% of all these transactions by value and it is not slowing down. The company said earlier this year that it was on pace to process $1 trillion in transactions annually.
Walmart, which owns a majority stake in e-commerce giant Flipkart, said earlier this year that the separation of Flipkart and PhonePe is “similar to eBay and PayPal, where each of them is operating independently”. And can take his initiative forward.
General Atlantic, which has backed several Indian firms including Jio, BillDesk, Byju’s, Amagi, NoBroker and Unacademy over the past decade, plans to deploy at least $2 billion to $3 billion in India over the next five to seven years. planning. People familiar with the plans of the New York-headquartered growth equity investor.
The new investment comes at a time when PhonePe is aggressively expanding its product offerings. The startup earlier this year launched a hyperlocal commerce app called Pincode, powered by the Open Network for Digital Commerce (ONDC), an initiative of the Government of India, to promote e-commerce by offering a zero-commission platform. Striving to democratize the commerce landscape.
PhonePe said it will make “significant efforts” across pincodes and “enable every Indian shopper spread across every nook and corner in the next few years.”
PhonePe is looking to leverage its 450 million-strong registered user base by expanding into additional financial services including wealth management, lending, stockbroking, ONDC-based shopping and account aggregation.
A potential roadblock to PhonePe’s growth was the National Payments Corporation of India (NPCI), the body overseeing the UPI network, seeking to impose market share restrictions on participating players. However, NPCI has extended the compliance deadline till 2025, allowing PhonePe two more years of rapid expansion.
In another favorable development, the Reserve Bank of India, the country’s central bank, has decided to abandon a high-profile project that was initially planned to compete with the UPI platform.