Walmart-owned PhonePe kicks off $1 bn fundraise with $350 mn first tranche from General Atlantic, others 

Weeks after announcing a complete separation from parent entity, Walmart-owned Flipkart Group, digital payments firm PhonePe has raised $350 million from private equity firm General Atlantic. The transaction was done at a pre-money valuation of $12 billion.

This round is the first tranche of an up to $1 billion total fundraise. The company said a number of global and Indian investors have also participating in the round, but did not disclose the names.

The proceeds of this funding round will be deployed to make investments in infrastructure, including the development of data centers besides building further financial services offerings. The company also plans to invest in new businesses, including insurance, wealth management, and lending. The funding will help the company build its UPI play by placing more emphasis on new products such as UPI Lite, which is an 'on-device wallet' feature by NPCI that allows users to make small-value payments offline and Credit on UPI which allows customers to make UPI payments on credit.

“PhonePe is proud to help lead India’s country-wide digitization efforts and believes that this powerful public-private collaboration has made the Indian digital ecosystem a global exemplar. 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,” Sameer Nigam, Founder and CEO of PhonePe, said. 

Founded in December 2015, PhonePe claims to have over 400 million registered users currently. The company said it has successfully digitized over 35 million offline merchants spread across Tier 2, 3, and 4 cities and beyond, covering 99 per cent of pin codes in the country.

PhonePe was founded by ex-Flipkart executives 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. 

PhonePe recently announced a full separation from the Flipkart Group with Walmart continuing to be the majority stakeholder in them. “As part of this transaction, existing Flipkart Singapore and PhonePe Singapore shareholders, led by Walmart, have purchased shares directly in PhonePe India. This also completes the move to make PhonePe a fully India-domiciled company, a process that started earlier this year,” a joint announcement by both the companies said last month.

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