PhonePe, the Indian fintech giant, has raised another $200 million as part of an ongoing funding round, bringing its total recent funding to $650 million. Despite the market slump, the startup has managed to raise significant funds as it bulks up its war chest following its separation from parent firm Flipkart. Walmart, which owns the majority of PhonePe, has invested $200 million, valuing PhonePe at a pre-money valuation of $12 billion. PhonePe plans to raise up to $1 billion as part of the ongoing financing round.
PhonePe dominates transactions on UPI, a network built by a coalition of retail banks in India that processes over 8 billion transactions a month. The seven-year-old startup commands about 50% of all these transactions and is on pace to processing transactions worth $1 trillion annually. PhonePe is also slowly becoming a distribution engine, leveraging its large base of 450 million registered users to cross-sell products such as insurance. The firm plans to deploy the funds to build and scale wealth management, lending, stockbroking, ONDC-based shopping, and account aggregators businesses.
Industry experts believe that PhonePe's endgame might be to become a bank, justifying its lofty valuation. PhonePe clocked a revenue of $234.3 million in the first nine months of 2022 and projects a revenue of $325 million for the calendar year 2022 and $504 million for 2023, according to a valuation report prepared by auditing firm KPMG and filed by PhonePe in January. KPMG wrote in its valuation report that PhonePe doesn't expect to turn EBIDTA positive until calendar year 2025, a key profitability metric.
“We are excited about PhonePe’s future and have confidence in how it continues to expand its offerings and provide access to financial services for Indians at scale," said Judith McKenna, President and CEO for Walmart International, in a statement. "India is one of the world’s most digital, dynamic and fastest growing economies, and we are pleased to have the opportunity to continue to support PhonePe,” she added. Sameer Nigam, co-founder and chief executive of PhonePe, thanked Walmart, their majority investor, for their continued support of their long-term aspirations.
0 Comments