PhonePe, the Indian fintech startup, has secured an additional $100 million investment from General Atlantic, building on their previous $350 million investment just four months ago. This latest funding round brings the total financing for PhonePe to $850 million, with the company now valued at $12 billion. As part of their ongoing round, PhonePe aims to raise an additional $150 million.
Backed by Walmart, PhonePe has emerged as India’s most valuable fintech startup, surpassing competitors like Google Pay and Paytm. Following its separation from e-commerce giant Flipkart last year, PhonePe has established dominance in transactions on the Unified Payments Interface (UPI) network, handling over 8 billion transactions monthly. Together with Google’s GPay, PhonePe accounts for more than 80% of all UPI transactions.
With a commanding 50% market share by transaction value, PhonePe continues its rapid growth trajectory and is projected to process transactions worth $1 trillion annually. The separation from Flipkart has enabled PhonePe to pursue independent initiatives and expand its range of products. One such initiative is the launch of Pincode, a hyperlocal commerce app powered by the government’s Open Network for Digital Commerce (ONDC), aimed at democratizing e-commerce.
PhonePe has ambitious plans to heavily invest in Pincode and empower every Indian shopkeeper to participate in digital commerce. With a user base of 450 million registered users, the company also aims to diversify into various financial services such as wealth management, lending, stockbroking, ONDC-based shopping, and account aggregation.
The National Payments Corporation of India (NPCI), responsible for overseeing the UPI network, had initially proposed market share restrictions on participating players. However, the deadline for compliance has been extended until 2025, granting PhonePe an additional two years of rapid expansion. Furthermore, the Reserve Bank of India has abandoned its plan to launch a UPI competitor, creating a favorable regulatory environment for PhonePe’s growth.
General Atlantic, renowned for supporting several Indian firms, plans to invest $2 billion to $3 billion in India within the next five to seven years. This recent investment solidifies PhonePe’s position as a leader in the Indian fintech landscape, enhancing its capacity to innovate and expand its service offerings.
