PhonePe raises $100 mn from Ribbit Capital, Tiger Global and TVS Capital at $12-bn valuation

Walmart-owed digital payments firm PhonePe has raised $100 million in a fresh funding round from venture capital investors Ribbit Capital, Tiger Global and TVS Capital Funds. The fundraise is part of PhonePe’s ongoing fundraise, which targets to mop up to $1 billion. 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 Bengaluru-based company had raised $350 million last year as the first tranche from private equity firm General Atlantic. With this second tranche, it has raised $450 million in the six weeks after it shifted domicile to India. PhonePe announced a full separation from the Flipkart Group with Walmart continuing to be the majority stakeholder in them. The company completed the move in October 2022 when it shifted all businesses and subsidiaries of PhonePe Singapore to PhonePe Pvt Ltd – India, including its insurance broking services and wealth broking businesses.  

“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,” said Scott Shleifer, Partner, Tiger Global.

The company said it plans to deploy these funds 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.

PhoenPe said it expects further investments from global as well as high net worth Indian investors in due course.

“We view this (investment) more as an opportunity in a population scale business for New India, driven by an outstanding management team with razor sharp focus, as driven by execution. PhonePe is the #1 transaction platform in India with an impressive moat of robust tech capabilities. Its strong growth in financial services across payments, insurance and lending with unopened doors to two massive opportunities through ONDC and Appstore, were key reasons in our investment thesis," said Gopal Srinivasan, Chairman and Managing Director, TCF.

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.