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PhonePe has raised another $100 million as part of its ongoing round as the Indian fintech giant ramps up its war chest after its recent split from parent company Flipkart.
Ribbit Capital, Tiger Global and TVS Capital infused the new $100 million into the startup. The ongoing round values Bengaluru-headquartered PhonePe at $12 billion at a pre-money valuation. Walmart-backed PhonePe has previously said it plans to raise up to $1 billion in an ongoing financing round.
“We are excited to continue our partnership with PhonePay as they lead the digital payments sector in India, a market we believe is still in its infancy with significant growth potential,” said Scott Shleifer, Partner at Tiger Global. press release.
With a valuation of $12 billion, PhonePe is India’s most valuable fintech startup. It competes with Google Pay and Paytm. Paytm, which expects to reach $1 billion in revenue by March this year, is currently valued at $4.5 billion.
PhonePe is definitely the clear leader in the mobile payments market on UPI among Indian retail banks. UPI has become the most popular way for Indians to transact online, and processes more than 8 billion transactions per month. Seven-year-old PhonePe accounts for about 50% of these transactions.
A concern for PhonePe’s growth was Indian regulators enforcing market controls on each player, but the deadline for the new guidelines was extended last month and will now not come into effect until 2025, giving PhonePe another two years of fast growth.
PhonePe is slowly leveraging its vast 300 million user base to sell a variety of products, including insurance. There is speculation that PhonePe may eventually try to become a bank, which in part would better confirm the current speculation. PhonePe recorded revenue of $234.3 million in the first nine months of 2022.
PhonePe will generate revenue of $325 million for calendar 2022 and $504 million for 2023, according to a valuation report prepared by auditing firm KPMG and submitted by PhonePe last month.
The startup does not expect to be EBIDTA positive until calendar year 2025, KMPG wrote in its valuation report. PhonePe’s financial and valuation report metrics have not been previously reported.
“We are fortunate to have a large pool of existing and new global investors who believe in our mission to build massive technology platforms to bring about greater financial and digital inclusion in India,” said Sameer Nigam, co-founder and CEO of PhonePe, in a statement.
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