Walmart-owned PhonePe raises $350 mn from General Atlantic

NEW DELHI: Walmart-owned Indian digital payments app PhonePe has raised $350 million from US private equity firm General Atlantic at a pre-money valuation of $12 billion, becoming the latest decacorn as well as the most valuable homegrown fintech startup. A decacorn is a privately held company valued at $10 billion or more.

The investment is the first tranche of PhonePe’s latest fundraising that could see marquee global and Indian investors pour in up to $1 billion in PhonePe.

Existing investors, including Tiger Global Management, Qatar Investment Authority and Microsoft, are also likely to invest in PhonePe.

The company plans to deploy the funds to strengthen infrastructure, including the development of data centres, and to build financial services offerings at scale in the country.

“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,” said Sameer Nigam, co-founder and chief executive at PhonePe.

The IPO-bound firm also plans to invest in new businesses, including insurance, wealth management, and lending. The funds will also help the company scale UPI payments in India, including UPI lite and credit on UPI.

“Our latest fundraising will help us further accelerate the government of India’s vision of digital financial inclusion for all,” Nigam added.

The latest fundraising follows

PhonePe’s recently announced change of domicile to India and spin-off from Flipkart. As part of the transaction, existing shareholders of Flipkart Singapore and PhonePe Singapore, led by Walmart, bought shares directly in PhonePe India. The separation will allow both companies to chart their own growth paths, build their businesses independently, and help unlock and maximize enterprise value for their shareholders, PhonePe said in a statement.

Founded in December 2015 by Nigam, Rahul Chari and Burzin Engineer, PhonePe offers financial services to users. It provides mutual funds and insurance products on the platform and competes with publicly listed Paytm and Google Pay in India’s digital payments space.

PhonePe was acquired by the Flipkart Group in 2016.