PhonePe Raises Growth Funds at a $12B Valuation, led by General Atlantic

January 25, 2023 at 04:00

PhonePe, one of India’s largest Fintech platforms, announced it has raised $350 million in funding from General Atlantic, a global growth equity firm, at a pre-money valuation of $12 billion.

Marquee Global and Indian investors are also participating in the investment round. The investment marks “the first tranche of an up to $1 billion total fundraise that commenced in January 2023.” The fundraise follows PhonePe’s recently “announced change of domicile to India and full separation from Flipkart.”

PhonePe plans “to deploy the new funds to make significant investments in infrastructure, including the development of data centers and help build financial services offerings at scale in the country.”

The company also plans “to invest in new businesses, including Insurance, Wealth Management, and Lending.” The fundraise is expected “to support PhonePe as it seeks to turbo-charge the next wave of growth for UPI payments in India, including UPI lite and Credit on UPI to enable greater financial inclusion for Indians.”

Founded in December 2015, PhonePe has “become a home-grown success story, with the company’s significant expansion powered by India’s emerging digital ecosystem.”

By building products and offerings tailored for the Indian market, PhonePe today “has over 400 million registered users, meaning that more than one in four Indians are on PhonePe.”

The company has also successfully “digitized over 35 million offline merchants spread across Tier 2, 3, and 4 cities and beyond, covering 99% of pin codes in the country.”

Sameer Nigam, Founder and CEO at PhonePe, said:

“I would like to thank General Atlantic and all our existing and new investors for the trust they have placed in us. PhonePe is proud to help lead India’s country-wide digitization efforts and believes that this powerful public-private collaboration has made the Indian digital ecosystem a global exemplar. We are an Indian company, built by Indians, and our latest fundraise will help us further accelerate the Government of India’s vision of digital financial inclusion for all. We look forward to delivering the next phase of our growth by investing in new business verticals like Insurance, Wealth Management and Lending, while also facilitating the next wave of growth for UPI payments in India.’’

Shantanu Rastogi, Managing Director and Head of India at General Atlantic, said:

“Sameer, Rahul and the PhonePe management team have pursued a clear mission to drive payments digitalization and significantly broaden access to financial tools for the people of India. They remain focused on driving adoption of inclusive products developed on the open API based ‘India stack.’ This vision is aligned with General Atlantic’s longstanding commitment to backing high-growth businesses focused on inclusion and empowerment. We are excited to partner with the PhonePe team to help enable the next generation of digital innovation in India.”

PhonePe also recently “announced a full separation from the Flipkart Group. After a partial separation from Flipkart in December 2020, a number of Flipkart shareholders, led by Walmart, acquired shares in the recent separation.”

This move will allow both companies “to chart their own growth paths, build their businesses independently, and help unlock and maximize enterprise value for shareholders of the two companies.”