Phonepe narrowed FY21 losses by 44%

Revenue grew 85% to ~690 crore

Walmart-owned digital payments firm Phonepe reported a drop of 44 per cent in losses for the 2020-2021 (FY21) on a standalone basis over the previous financial year.

The operational losses, excluding the Employee Stock Ownership Plan (ESOP), costs stood at ~888 crore in FY21 versus ~1,570 crore in FY20, according to regulatory filings by the company.

The drop in losses is due to higher revenues and a reduction in operating costs. The company’s revenue grew from ~372 crore in FY20 to ~690 crore in FY21.

The 85 per cent year-onyear (YOY) growth in revenue was due to a rise in transactions on the platform. Phonepe, which competes with players such as Googlepay, Paytm, and Amazon Pay, has 46 per cent UPI (unified payments interface) market share.

The company’s gross margins grew 60 per cent to 84 per cent YOY. The firm also issued its highest ever ESOP to employees at Rs 843 crore in FY21 compared to ~206 crore in FY20.

Phonepe, launched in 2015, has over 314 million registered users and has coverage across 19,098 pin codes in the country. The company which competes with players such as Google Pay, Paytm and Amazon Pay said it has 46 per cent unified payments interface market share. It does annualised total payment volume of over $473 billion.

Last December, the company signed a deal to raise $700 million in primary capital at a post-money valuation of $5.5 billion from existing Flipkart investors, including Tiger Global, led by Walmart. Flipkart had done a partial spin-off of Phonepe, which will help it to access dedicated, long-term capital to fund its growth ambitions.