PhonePe, owned by Walmart, seeks $300-$400M funding.

• ByStartupStory     |    March 13, 2023

PhonePe, the fintech firm owned by Walmart, is reportedly in discussions to secure $300-$400 million in funding from current and new investors, including General Atlantic, at a pre-funding valuation of $12 billion. Sources suggest that the funding could be finalized within the next few weeks. This comes after a recent $100 million primary capital injection from Ribbit Capital, Tiger Global, and TVS Capital Funds, as well as a $350 million funding round led by General Atlantic. The investment arrives during a period of macroeconomic uncertainty and reduced funding opportunities for startups.

According to reports, talks are ongoing and an agreement could be reached within the next few weeks regarding PhonePe’s new funding round. The fintech firm, which has recently relocated to India, is seeking to raise up to $1 billion in capital. Having already secured $450 million through two funding tranches this year, PhonePe anticipates additional investments from well-known high-net-worth Indian investors as well as leading global investors in the near future.

Sources indicate that Binny Bansal, co-founder of Flipkart, is reportedly in discussions to invest between $100-150 million as part of PhonePe’s ongoing financing round. The digital payments firm has had the support of Bansal from the beginning, and he currently serves on its board. However, it is still too early to say if a deal will be reached as talks are still in their preliminary stages.

 

PhonePe, headquartered in Bengaluru, became the highest-valued fintech firm in India after securing $350 million from General Atlantic in January, with a pre-money valuation of $12 billion. The funding round was also supported by Qatar Investment Authority, Microsoft, Tiger Global, and a few smaller hedge funds. PhonePe is in competition with other fintech players in India such as Paytm, Google Pay, and Amazon Pay. A report by Bain and Co predicts that the Indian fintech industry’s enterprise value could reach $350 billion by 2026.

PhonePe intends to use the newly acquired funds to expand its payment and insurance operations in India, as well as launching and expanding new ventures such as lending, wealth management, stockbroking, and Open Network for Digital Commerce (ONDC) based shopping and account aggregators in the coming years. Sources suggest that the fintech company is also planning to acquire ZestMoney, a fintech startup, for a reported $200-300 million.

According to John David Rainey, CFO and EVP of Walmart, India is predicted to become Walmart’s largest international market this year, surpassing China. He stated that both Flipkart and PhonePe are exciting opportunities in India, with substantial market shares in the country. In December of last year, Flipkart and PhonePe announced their full separation, allowing the digital payments platform to follow its own course and unlock enterprise value for shareholders. However, PhonePe’s investors had to pay approximately Rs 8,000 crore in taxes to enable the fintech firm to establish its domicile in India from Singapore.

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