News Update

PhonePe’s income increases by 138% while losses slightly decline

• ByStartupStory     |    October 19, 2022

Due to development across all sectors, PhonePe, a platform for payments and financial services, saw sales in FY22 increase by 138 per cent to Rs 1,646 crore from the prior fiscal year, the firm stated on October 18. Prior to the company’s intention to list on the Indian stock exchanges, revenues have increased significantly.

Losses at the company controlled by Walmart and Flipkart decreased to Rs 671 crore in the year from Rs 789 crore in FY21 when ESOP charges were excluded.

Despite a spike in sales, losses did not significantly decrease because costs, particularly marketing costs, increased. PhonePe increased its marketing spending by 62 per cent over the previous year, from Rs 535 crore to Rs 866 crore.

The marketing campaigns for the company’s new insurance distribution business that were run during the ICC Cricket World Cup in 2021 and the Indian Premier League (IPL) in 2022, according to the corporation, are mostly to blame for the spike in marketing costs.

Due to quick recruiting for the development of future product lines like insurance, wealth management, and others, PhonePe’s staff expenditures increased by 41% from Rs 393 crore in FY21 to Rs 555 crore in FY22. From Rs 443 crore in FY21 to Rs 697 crore in FY22, other operating expenses grew by 57%. Revenues fewer payment fees, or contribution margins, more than doubled from Rs 582 crore in FY21 to Rs 1,447 crore in FY22.

Former Flipkart executives Sameer Nigam, Rahul Chari, and Burzin Engineer established PhonePe in 2015. With more than 400 million registered customers, PhonePe is a market leader in UPI (Unified Payments Interface) transactions. The corporation holds a market share of 47% in terms of UPI volumes each month.

In addition to bill and utility payments, the business expanded into financial services in 2017 and now lets consumers buy gold, insurance, and mutual funds on its platform.On September 5, it was revealed that as an addition to its current Quick Response (QR) Code-based UPI payment service and in-app payments, PhonePe has started working to establish its own payment gateway.

As it may attempt to target both major offline companies and small and medium-sized enterprises to offer its payment gateway to, the company will be in direct competition with the likes of Paytm, Pine Labs, and Razorpay.

PhonePe bought GigIndia, WealthDesk, and OpenQ, and completed the long-delayed acquisition of IndusOS in the last year. In addition, the business disclosed that it has changed its domicile from Singapore to India in preparation for its upcoming initial public offering (IPO).

Sameer Nigam, co-founder and CEO of PhonePe, stated in an interview that the business is in the process of transferring its registered corporation from Singapore to India. He had claimed that the idea had already received board approval and that the process’ completion was just a matter of time.

“We are an Indian-made business. We have every office, data centre, and staff here. There is no reason why we shouldn’t help this market generate money, “In Nigam’s words. Once its primary businesses start to become profitable, which it intends to do by 2023, the company plans to go public.

Follow Startup Story