General Atlantic infuses $100 mn more into PhonePe’s ongoing $1 billion funding round

Walmart-owned fintech company PhonePe has raised an additional tranche of $100 million from private equity firm General Atlantic and its co-investors, the company said. This is the second tranche from General Atlantic in PhonePe’s ongoing $1 billion fundraise. The company initially infused $350 million into the Bengaluru-based company in January 2023. The round is raised at a pre-money valuation of $12 billion, making PhonePe the most valued (privately-held) fintech firm in the country. 

The fintech platform has already secured $100 million from venture capital investors Ribbit Capital, Tiger Global and TVS Capital Funds in February and $200 million in primary capital from Walmart in March. With the latest tranche, PhonePe has raised a total of $750 million since moving its domicile in India and full separating from the Flipkart Group. US-based retailer Walmart continues to be the majority stakeholder in both the companies. 

As per the company’s statements during the previous tranches, the fresh capital will be deployed to scale up its payments and insurance businesses in India, as well as to launch and scale new businesses like lending, stock broking, ONDC-based shopping and account aggregators over the next few years. 

Early this month, PhonePe forayed into e-commerce with the launch of a new consumer application named ‘Pincode’. It is a buyer-side application on the Open Network for Digital Commerce (ONDC), which is a government-backed initiative to democratise e-commerce in India. Pincode will be a pure hyper-local ecommerce app that will connect sellers on the ONDC network to consumers. The service is currently live only in Bangalore. The Pincode app will promote local shopkeepers and sellers and digitally connect each city’s consumers with all their neighborhood stores that they usually buy from offline. It is launched with six categories such as food, groceries, pharma, fashion, electronics and home decor. PhonePe expects to clock one lakh orders a day by the end of this year. 

PhonePe was founded in 2015 by ex-Flipkart executives Sameer Nigam, Rahul Chari and Burzin Engineer, and was acquired by the Sachin- and Binny Bansal-founded company in 2016. In 2018, Flipkart was acquired by Walmart, and PhonePe was part of the transaction as well. The digital payments company was Flipkart’s third major acquisition in the space after NGPay and FX Mart Pvt. Ltd at that point in time.   

The company claims to have over 400 million registered users currently. The company said it has successfully digitized approximately 35 million offline merchants spread across Tier 2, 3, and 4 cities and beyond, covering 99 per cent of pin codes in the country.  

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