India’s PhonePe on Friday said it has raised $200 million in additional funding from its majority shareholder Walmart at a pre-money valuation of $12 billion, in the latest capital raise for the fintech unicorn which aims to raise up to $1 billion in the ongoing round.
The latest capital infusion comes just a month after the company raised $100 million from Ribbit Capital, Tiger Global, and TVS Capital Funds. It had raised $350 million in a fresh funding round led by private equity firm General Atlantic in Jan.
The company has previously said that it plans to raise up to $1 billion as part of the ongoing financing round. The company expects further investments to be announced in due course.
PhonePe said it will use the fresh funds to build and scale new businesses like insurance, wealth management, lending, stockbroking, ONDC-based shopping, and account aggregators. The fundraiser will also help PhonePe turbo-charge the next wave of growth for UPI payments in India, including UPI lite and Credit on UPI, the company said.
In the highly competitive UPI space in India, PhonePe, with over 400 million registered users, has outranked Google Pay and Paytm with a more than 45% market share in transactions. PhonePe’s current valuation of $12 billion also puts it ahead of digital payment unicorn Razorpay, which was last valued at around $7.5 billion.
PhonePe also recently shifted its domicile to India from Singapore and fully separated from Flipkart, ahead of its intended listing on the Indian bourses. E-commerce giant Flipkart acquired PhonePe in 2016.
Given the dismal performance of its closest rival Paytm’s shares on the Indian bourses, PhonePe’s IPO will be closely watched. While the much-hyped One97 Communication-owned Paytm’s IPO raised a record $2.5 billion, its shares plummeted 27% on debut and have lost more than 73% from the Rs2,150 IPO price.
However, both Paytm and PhonePe have been struggling with losses. In FY2022, PhonePe reported a loss of $248 million, while Paytm reported a loss of $286 million. Paytm’s revenues, however, are more than double that of PhonePe. For FY22, Paytm posted a revenue of $479 million, compared with PhonePe’s $202 million.