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Indian fintech decacorn PhonePe raises another $100M at valuation of $12B

Photo Credit: PhonePe

Indian fintech startup PhonePe has maintained its dominant position in the digital payments space in the country as it continues to process the biggest chunk of UPI transactions. Picture this, in December alone, PhonePe accounted for nearly 50% of the total UPI transactions processed. 

The Walmart-owned fintech giant has secured another $100M funding from Ribbit Capital, Tiger Global and TVS Capital Funds, at a pre-money valuation of $12B. This comes after it became a decacorn post raising $350M on January 19, 2023. 

Meanwhile, e-commerce giant Flipkart recently completed the full ownership separation process with PhonePe. Existing Flipkart Singapore and PhonePe Singapore shareholders, backed by Walmart, purchased shares in PhonePe India directly as part of the transaction.

Expansion in payments and insurance operations

In the next few years, PhonePe intends to use these funds to expand its Payments and Insurance operations in India, as well as to establish and rapidly develop new companies such as lending, stockbroking, ONDC-based shopping, and account aggregators.

PhonePe began it’s most recent fundraise with the goal of raising up to $1B in capital following its relocation to India. With this second tranche, it has now garnered $450M from leading investors in just six weeks. In future, the company anticipates more investments from top global as well as prominent high-net-worth Indian investors.

Speaking on the fundraise, Sameer Nigam, CEO and Founder of PhonePe said, ‘’I would like to thank Ribbit Capital, Tiger Global and TVS Capital Funds for reposing their faith in us. We are privileged to have a great set of leading global investors, both existing and new, who believe in our mission of building massive technology platforms to bring at-scale financial and digital inclusion in India.’’

PhonePe was launched in 2015 by Sameer Nigam, Burzin Engineer, and Rahul Chari and was acquired by e-commerce behemoth Flipkart within a year. The two companies split up last month, and Flipkart no longer has a stake in the payments company. Flipkart’s valuation will be affected by the separation. Flipkart Group raised $3.6B in July of last year at a valuation of $37.6B.

PhonePe claims to have over 400M registered users. It also claims to have digitised over 35M offline retailers scattered over Tier II, III, and IV cities and beyond, covering 99% of the country’s pin codes.

“PhonePe lives by the same values as we do at Ribbit. We both believe that better money makes life better. PhonePe’s relentless pursuit of this principle in serving consumers and businesses all across India is a mission to live for,” said Micky Malka, Founder of Ribbit Capital.

“We are excited to continue our partnership with PhonePe as they lead the digital payments sector in India, a market we believe is still in the early stages with significant growth potential ahead,” said Scott Shleifer, Partner, Tiger Global.

According to Credit Suisse, India’s payments market is expected to be worth $1T in the next two to three years, up from around $200B in 2020.

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