PhonePe raises $100 million in additional funding

Fintech platform PhonePe on Tuesday raised another $100 million in primary capital from Ribbit Capital, Tiger Global and TVS Capital Funds, at a pre-money valuation of $12 billion.

This new investment follows the recent $350 million primary fundraise from General Atlantic that closed on January 19, 2023.

PhonePe started its latest fundraise with a target of raising up to $1 billion in capital after shifting its domicile to India.

With this second tranche, PhonePe has already raised $450 million within six weeks from investors. The company expects further investments from global, as well as prominent high net worth Indian investors in due course.

PhonePe plans to deploy these funds to scale up its payments and insurance businesses in India, as well as to launch and aggressively scale new businesses like lending, stockbroking, ONDC-based shopping and account aggregators over the next few years.

"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," says Scott Shleifer, partner, Tiger Global.

Commenting on the fundraise, Sameer Nigam, CEO and founder of PhonePe, says the digital payments firm is privileged to have a great set of leading global investors, both existing and new, who believe in the company’s mission of building massive technology platforms to bring at-scale financial and digital inclusion in India.

The Walmart-owned fintech startup had announced its separation from e-commerce firm Flipkart in December 2022. As part of the deal, existing Flipkart Singapore and PhonePe Singapore shareholders, led by Walmart, purchased shares directly in PhonePe India. Walmart, however, remains the majority shareholder in both business entities.

Last week, PhonePe launched support for 'UPI international' payments. It supports all international merchant outlets in the U.A.E., Singapore, Nepal and Bhutan that have a local QR code. As per the company, users can now make payments in the foreign currency directly from their Indian bank, just like they do with international debit cards.

PhonePe claims it has over 400 million registered users, with more than one in four Indians now using the app. The Walmart-owned digital payments giant controls over 40% market share of the UPI network. In December 2022, the National Payments Corporation of India (NPCI) extended the deadline for third-party apps to comply with its 30% market share cap guidelines by two years. The NPCI said the new deadline would be December 31, 2024, from January 1, 2023, earlier.