PhonePe said it has raised another $100 million as part of an ongoing round, a deliberation that has so far raised $450 million despite the market slump, as the Indian fintech giant replenishes its war chest following its recent separation from the parent company Flipkart.
Ribbit Capital, Tiger Global and TVS Capital pumped the new $100 million into the startup. The ongoing round values Bengaluru-based PhonePe at a pre-money valuation of $12 billion. Walmart-backed PhonePe has previously said it plans to raise up to $1 billion as part of its ongoing funding round.
“We are excited to continue our partnership with PhonePe as they lead the digital payments industry in India, a market we believe is still in its early stages with significant growth potential ahead,” said Scott Shleifer, a partner at Tiger Global, in a position.
With a valuation of $12 billion, PhonePe is India’s most valuable fintech startup. It competes with Google Pay and Paytm. Paytm, which expects revenues of $1 billion by March this year, is currently valued at $4.5 billion.
PhonePe is undoubtedly the clear leader in the mobile payment market on UPI, a network built by a coalition of retail banks in India. UPI has become the most popular way for Indians to transact online, processing over 8 billion transactions per month. The seven-year-old PhonePe manages about 50% of all these transactions.
A concern for PhonePe’s growth has been Indian regulators imposing a market cap check on every player, but the deadline for the new guidelines was extended last month and will now not take effect until 2025, giving PhonePe another two years to quickly can grow.
PhonePe is slowly using its large user base of 300 million to sell them a range of products, including insurance. There is also speculation that PhonePe could eventually try to become a bank, which in part better justifies its current valuation. PhonePe posted revenue of $234.3 million in the first nine months of 2022.
PhonePe forecasts revenue of $325 million for calendar year 2022 and $504 million for 2023, according to a valuation report prepared by accounting firm KPMG and submitted by PhonePe last month.
The startup does not expect EBIDTA to turn positive, a key measure of profitability, until calendar year 2025, KMPG wrote in its valuation report. PhonePe’s financials and statistics from the valuation report have not been previously reported.
“We are privileged to have a large number of leading global investors, both existing and new, who believe in our mission to build massive technology platforms to bring financial and digital inclusion to India at scale,” said Sameer Nigam, co-founder and CEO of PhonePe, in a statement.