The Walmart-backed company PhonePe announced on Thursday that it had raised $350 million (roughly Rs. 2800 crore) from private equity firm General Atlantic at a $12 billion (roughly Rs. 97,700) valuation. This made PhonePe the most valuable payments company in India and gave it the money it needed to enter the lucrative lending market.
A representative for PhonePe stated, declining to provide more information.
That a second round of financing from renowned international and Indian investors is anticipated to close next month. Due to the popularity of online payments and startups’ aspirations to enter the lucrative financial services sector. The Indian digital payments sector has been a bright spot despite a financing winter.
Sameer Nigam, the founder, and CEO of PhonePe said the company will use the funding to build infrastructure. And launch new businesses in the insurance, wealth management, and financing sectors. The Indian government has pushed the nation’s cash-loving merchants and consumers to adopt digital payments. But it also wants to limit the influence of payment companies. By the end of 2024, it hopes to cap any one firm’s market share at 30%.
According to statistics provided by National Payments Corporation of India
PhonePe has a 46% market share in December. The market share of the payments app controlled by Alphabet, and Google, was 34%, and Paytm, backed by SoftBank, had a share of 14.7%. Paytm recently claimed substantial growth in its financial offerings, such as buy-now-pay-later, personal, and merchant loans. However, Paytm’s current market value of $4.2 billion (approximately Rs. 34,200) is currently dwarfed by PhonePe.
PhonePe, in which American retail behemoth Walmart
acquired a majority stake in 2018, concluded its independence from Indian e-commerce juggernaut Flipkart last year and moved its registered offices from Singapore to India. Some reports claim that the corporation moved to India in order to enter the country’s highly regulated financial services market more easily.
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