PhonePe, a Walmart-owned Indian digital payments app, has raised $350 million from US private equity firm General Atlantic at a pre-money valuation of $12 billion, making it the most valuable homegrown fintech startup as well as the latest decacorn. A decacorn is a privately held company with a market value of $10 billion or more.
The investment is the first instalment of PhonePe’s latest fundraising, which could see major global and Indian investors pour up to $1 billion into the company. Existing investors such as Tiger Global Management, Qatar Investment Authority, and Microsoft are also expected to back PhonePe.
The funds will be used to strengthen infrastructure, including the development of data centres, and to build large-scale financial services offerings 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.
In addition, the IPO-bound company intends to invest in new businesses such as insurance, wealth management, and lending. The funds will also assist the company in expanding 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 round of funding follows PhonePe’s recently announced move to India and spin-off from Flipkart.
Existing shareholders of Flipkart Singapore and PhonePe Singapore, led by Walmart, purchased shares in PhonePe India directly as part of the transaction. According to PhonePe, the separation will allow both companies to chart their own growth paths, build their businesses independently, and help unlock and maximise enterprise value for their shareholders.
PhonePe, founded in December 2015 by Nigam, Rahul Chari, and Burzin Engineer, provides users with financial services. On the platform, it offers mutual funds and insurance products and competes in India’s digital payments space with publicly traded Paytm and Google Pay.
In 2016, the Flipkart Group purchased PhonePe. According to the company, it has over 400 million registered users and over 35 million offline merchants spread across India, covering 99% of PIN codes.
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