PhonePe Gets Another Infusion Of $100 Million.
PhonePe's data revolves around 440 million registered users in 35 million offline retailers dispersed throughout tier II, III, and IV cities.
According to three persons familiar with the situation, General Atlantic (GA) invested an extra $100 million in PhonePe recently as part of the payments company’s $1 billion initial fundraising plan and may invest another $100-200 million.
According to one of them, the new investment from the private equity group is due in the coming weeks and is subject to criteria and milestones being satisfied. If this occurs, GA and affiliate funds would have invested $550-600 million as part of PhonePe’s mega fundraise, which runs counter to the fundraising slump affecting Indian entrepreneurs. This is greater than the projected $350-450 million infusion from the PE firm in the round.
The pre-Money valuation of $12 billion of PhonePe.
The cash was raised at the same $12 billion pre-money value as the prior tranches. General Atlantic and its affiliate funds have invested $450 million in the current fundraising with that $100 million. Walmart owns the bulk of the payments firm. Walmart contributed $200 million to the firm in March. General Atlantic did not reply to requests for comment.
According to a PhonePe spokesperson, the company has confirmed a $100 million further tranche of financing from General Atlantic and its co-investors as part of its continuing fundraising. The individual declined to comment on General Atlantic’s plans to increase its investment.
Splurge on PE.
With this new injection, the digital payments company has raised $750 million in its fundraising. Local and overseas private equity funds are increasingly funding fintech businesses in India. TPG’s Rise Fund co-led a $110 million investment in digital lender Fibe (formerly EarlySalary) last year. Similarly, Advent International, Premji Invest, and others contributed to KreditBee’s $200 million funding round, which ended earlier this year.
PhonePe launched its newest round in January, with General Atlantic investing $350 million. The next month, it received $100 million from Ribbit Capital, TVS Capital Funds, and New York-based Tiger Global.
On March 10, it was reported that Flipkart cofounder Binny Bansal was in discussions to invest $100-150 million in PhonePe, which would be one of the largest individual investments in a new-age startup. According to one of the people mentioned above, the investment has yet to be wired in. Prior to this fundraising, General Atlantic owned around 2.9% of PhonePe, with Walmart holding over 70%. At the completion of this main fundraising, the final ownership structure should be determined. Last December, the company declared its departure from Walmart-owned domestic e-commerce company Flipkart.
Exploration of New Markets.
PhonePe’s e-commerce ambitions have been made plain with the launch of its hyperlocal commerce app Pincode on the Open Network for Digital Commerce (ONDC).
Pincode will receive $10-15 million in investment from the payments business. It has been raising cash for its new lines of business, with the intention of using the funds to grow and scale up its ambitions in the insurance, wealth management, lending, and stockbroking sectors. With the acquisition of ZestMoney, it was also considering entering the buy-now-pay-later (BNPL) industry. But, as it was reported on March 30, the two parties’ contract discussions broke down due to due diligence concerns.
According to sources, the business is intending to develop a BNPL product in-house and may hire certain ZestMoney personnel to help strengthen its consumer credit divisions. Sameer Nigam, cofounder and CEO of PhonePe, also stated that the business had begun pilot testing to deliver merchant loans on its platform through partners. This pits it against rival Paytm, which has been wooing the public markets with its loan disbursement data. The Great One97 Communications, the parent company of the Paytm, recently said that loan disbursals increased more than thrice year on year to Rs 12,554 crore for the fiscal quarter ending March 31.
The Final Change.
In a recent YouTube Live session with cofounder Rahul Chari, Nigam stated that PhonePe’s investors had to spend Rs 8,000 crore in taxes only to allow the company to return to India, among other setbacks such as resetting the vesting cliff for employees. Last year, it announced that it will relocate its headquarters from Singapore to India. The government might receive up to $1 billion in taxes from Walmart and other PhonePe stockholders as a result of the fintech firm’s relocation to India. PhonePe’s data revolves around 440 million registered users in 35 million offline retailers dispersed throughout tier II, III, and IV cities, according to reports.
