PhonePe raises $350 mln, becomes India’s most valuable payments firm


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BENGALURU — Walmart-backed PhonePe said on Thursday it raised $350 million from private equity firm General Atlantic at a $12 billion valuation, making it India’s most valuable payments firm and giving it funds to expand into the lucrative lending space.

A second tranche of investments from marquee global and Indian investors is expected to close next month, a PhonePe spokesperson said, declining to give further details.

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Despite a funding winter, the Indian digital payments space has been a bright spot due to the popularity of online payments and startups’ ambitions to branch into the lucrative financial services space.

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PhonePe will use the funds for infrastructure and new businesses, including insurance, wealth management and lending, founder and chief executive Sameer Nigam said in a statement.

While the Indian government has pushed the country’s cash-loving merchants and consumers to adopt digital payments, it wants to control the clout of payments firms, seeking to cap any one firm’s market share at 30% by the end of 2024.

PhonePe had a 46% market share in December, according to National Payments Corporation of India data. Alphabet Inc-owned Google’s payments app had a 34% share and SoftBank-backed Paytm had 14.7%.

Paytm, whose current market value of $4.2 billion is now dwarfed by PhonePe, has recently reported strong growth in its financial services such as buy-now-pay-later, personal and merchant loans.

PhonePe, in which U.S. retail giant Walmart Inc took a majority stake in 2018, shifted its registered headquarters from Singapore to India last year and also completed its separation from Indian e-commerce giant Flipkart.

The company’s shift to India, according to some reports, has been to ensure an easier entry into the country’s highly-regulated financial services industry. (Reporting by Nandan Mandayam in Bengaluru; Editing by Dhanya Ann Thoppil, Sherry Jacob-Phillips and Savio D’Souza)


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