Fundraising hasn’t been as bright as it was during 2021 for Indian startups. In 2022, reports suggest that Indian startups, including all of its 100+ unicorns, were able to raise just half of what they raised in 2021. The scenario looked bleaker for the fintech space, with Paytm, which was once India’s most valued startup, struggling to even stay within 30% of its peak valuation at stock markets.
Amid all of that, PhonePe, the UPI-based fintech platform, which rivals the likes of Paytm, Google’s GooglePay, BharatPe among others, has raised $350Mn in a fresh round, from General Atlantic. The round, which is expected to close at nearly $1Bn, values the company at $12 Billion, moving it to the even more coveted ‘decacorn’ category of startups.
PhonePe will be using the funds for making investments into infrastructure, which interestingly includes development of its own data centers, the company said in a statement on January 19. With UPI transactions not enough to sustain businesses, PhonePe, which spun off from its Walmart-owned parent Flipkart in December last year, has quickly branched into providing loans and other value added services as well.
The company plans to invest this fresh capital into new businesses, including Insurance, Wealth Management, and Lending. In a statement, the company said, “The fundraise is expected to support PhonePe as it seeks to turbo-charge the next wave of growth for UPI payments in India, including UPI lite and Credit on UPI to enable greater financial inclusion for Indians”.
Sameer Nigam, CEO of PhonePe, said in a statement, “I would like to thank General Atlantic and all our existing and new investors for the trust they have placed in us. We are an Indian company, built by Indians, and our latest fundraise will help us further accelerate the Government of India’s vision of digital financial inclusion for all,”
PhonePe was among the early movers when it comes to value added services attached to UPI. The platform claims to have over 435 Million registered users in India. It also has over 35 million small and medium businesses across the country, covering 99% pin codes. Bill payments has been a strong revenue generators for the platform, having processed nearly 45% of all payments on Indian government’s Bharat Bill Pay System (BBPS), processing over 45% of the transactions on the BBPS platform.
