General Atlantic has directed an additional investment of $100 million for the development of PhonePe.

Source: Pixabay.com

The investor provided new financing four months after he directed $350 million to an Indian fintech startup. As of today, the total amount of funds raised by PhonePe is $850 million. The company receives financing during the slowdown in the global economy.

PhonePe, backed by Walmart, announced the investment on Monday, May 22. The current value of the startup is estimated at $12 billion. The company intends to raise $150 million more.

PhonePe is currently India’s most valuable fintech startup. The company competes with Google Pay and Paytm, the latter of which is valued at almost $5 billion.

PhonePe last year completely separated from the e-commerce giant Flipkart. The company dominates UPI transactions, a network created by a coalition of retail banks in India, and represents the most popular way to make online transactions among Indians. This network processes more than 8 billion financial operations every month.

PhonePe controls about 50% of all UPI transactions by value. Earlier this year, the company said that its current growth rate in the foreseeable future will allow it to process transactions totaling $1 trillion annually.

Walmart, which also owns a controlling stake in Flipkart, said that the separation of this firm and PhonePe was very similar to eBay and PayPal, conditions in which everyone can implement their initiatives within the framework of independent activities.

General Atlantic, which has supported several Indian firms over the past decade, including Jio, BillDesk, Byju’s, Amagi, NoBroker, and Unacademy, plans to invest between $2 and $3 billion in the Indian fintech sector over the next 5-7 years.

PhonePe is currently actively expanding its product range. Earlier this year, the firm launched a hyperlocal commerce app called Pincode, which runs on the Open Network for Digital Commerce (ONDC), a zero-fee platform.

PhonePe intends to invest significant efforts in Pincode in the coming years. According to the startup’s management, the implementation of this action plan will expand the geography of the activities of the owners of Indian stores.

PhonePe aims to capitalize on its 450 million registered user base. The company is expanding the scope of additional financial services, including money management, lending, stockbroking, ONDC-based purchases, and account aggregation.

The growth of PhonePe could be limited by the intention of the National Payment Corporation of India (NPCI) to impose restrictions on market share for participating players. But this regulator postponed the date of entry into force of restrictive measures until 2025. This means that there will be no barriers to the development of a startup for another two years.

The Reserve Bank of India, the country’s central bank, has abandoned a project to create a competitor to UPI. This circumstance is also a favorable factor for the development of PhonePe.

As we have reported earlier, PhonePe Backs Out of ZestMoney Acquisition.