Fintech major PhonePe has secured an additional $200 million from its parent company Walmart. Coming as part of the digital payments major’s ongoing fundraising of up to $1 billion, the fresh infusion of capital puts the pre-money valuation of the upstart to a staggering $12 billion.
Walmart had acquired a majority stake in PhonePe’s parent company Flipkart in 2018, and during the final days of the previous year, the fintech player announced its separation from Flipkart. Walmart, the US-based retail giant, remains the majority shareholder of both business groups.
“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. 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,” Judith McKenna, president, and CEO of Walmart International said in a statement. It also brings the total amount of funds raised (in the ongoing round) so far to $650 million in recent weeks. This development also comes at a time when numerous firms are struggling to raise capital from investors, especially startups that have been affected by the dramatic collapse of Silicon Valley Bank (SVB) and are scrambling for funds to make their next payroll.
“We would like to thank Walmart, our majority investor, for their continued support of our long-term aspirations. We are excited about the next phase of our growth as we build new offerings for Indian consumers and merchants, along with enabling financial inclusion across the nation,” said Sameer Nigam, co-founder and chief executive of PhonePe, in the official statement.
The fresh infusion of capital means that PhonePe has now secured its place as the most valuable fintech startup in the world’s second-largest internet market. The eight-year-old fintech player has made a name for itself in the Indian fintech sector – today, it allows users to make payments, transfer money, and recharge their mobile phones and DTH accounts, among other services. As of 2023, PhonePe continued its run as the biggest player in the UPI payments space. In January of 2023, it processed the lion’s chunk of Unified Payments Interface (UPI) transactions – accounting for over 47% of the total transaction count.
According to PhonePe, it will deploy this fresh capital towards creation of and scaling of new business verticals such as insurance, wealth management, lending, stockbroking, ONDC-based shopping, and account aggregators. Furthermore, proceeds will be dedicated to fuel its growth within the UPI payments space (including UPI Lite and Credit on UPI).
The platform has also expanded its offerings beyond payments, with the launch of several value-added services such as insurance, investments, and gold purchases. These services have further increased the platform’s popularity and appeal among its user base, particularly in India’s rapidly growing middle class. PhonePe has grand ambitions for the future as well – it said last week it was on the way to processing transactions worth $1 trillion annually.