PhonePe said it raise $350 million (approx. Rs. 2800 crore) from private equity firm General Atlantic at a $12 billion (approx. Rs. 97,700) valuation, making it India’s most valuable payments firm and giving it funds to expand into the lucrative lending space.
A second phase of investments from marquee global and Indian investors is expect to close next month, a PhonePe spokesperson said, declining to give further details.
PhonePe, the Indian digital payments space has a bright spot due to the popularity of online payments and startups’ ambitions to branch into the lucrative financial services space.
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.
Indian government has push 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.
Google’s payments app had a 34% share and SoftBank-backed Paytm had 14.7%.
Paytm, whose current market value of $4.2 billion (approx. Rs. 34,200) is now dwarfed by PhonePe, has recently report strong growth in its financial services such as buy-now-pay-later, personal and merchant loans.
PhonePe, in which U.S. retail giant Walmart took a majority stake in 2018, shift its register headquarters from Singapore to India in 2022 and also complete its separation from Indian e-commerce giant Flipkart.
The PhonePe’s shift to India, according to some reports, has to ensure an easier entry into the country’s highly-regulate financial services industry.