Four months after investing $350 million in PhonePe, the Indian financial startup has raised $850 million in a continuing fundraising round.
PhonePe announced the investment Monday. The $12 billion round values the Bengaluru-based firm. PhonePe wants $150 million in the current round. Last month, General Atlantic gave PhonePe $100 million.
PhonePe is India’s most valuable fintech startup at $12 billion. It competes with Google Pay and Paytm, worth $5 billion. PhonePe, which split from Flipkart last year, leads UPI transactions. UPI processes around 8 billion transactions a month for Indians. GPay and PhonePe handle 80% of UPI transactions.
PhonePe controls 50% of these transactions by value and is growing. This year, the business is predicted to process $1 trillion in transactions.
Walmart, which holds a controlling stake in Flipkart, stated earlier this year that the separation of Flipkart and PhonePe was “very analogous to eBay and PayPal, where each of them operating independently can pursue their own initiatives.”
According to sources, General Atlantic, which has invested in Jio, BillDesk, Byju’s, Amagi, NoBroker, and Unacademy over the past decade, plans to invest $2 billion to $3 billion in India over the next five to seven years.
PhonePe is aggressively adding products, prompting investment. This year, the startup introduced Pincode, a hyperlocal commerce software powered by the Open Network for Digital Commerce (ONDC), an Indian government project to democratize e-commerce via a zero-commission platform.
PhonePe will “invest significant effort” in Pincode and “enabling every Indian shopkeeper spread across every nook and corner, over the next few years.” PhonePe plans to offer wealth management, loans, stockbroking, ONDC-based shopping, and account aggregation to its 450 million registered users.
The National Payments Corporation of India (NPCI), which manages the UPI network, wanted to limit market share for participating businesses, which could hinder PhonePe’s growth. As a result, the NPCI has delayed the compliance deadline to 2025, giving PhonePe two more years of fast expansion.
In another positive developmenIndia’sa’s central bank, the Reserve Bank of India abandoned a high-profile project intended to compete with UPI.