Tiger Global and Ribbit invest another $100 million in PhonePe • TechCrunch

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PhonePe has raised another $100 million as part of an ongoing round, a consideration that has already drawn $450 million despite the market slowdown, as the Indian fintech giant bulks up its war chest following its recent separation from parent company Flipkart.

Ribbit Capital, Tiger Global and TVS Capital pumped the new $100 million into the startup. The ongoing round values ​​Bengaluru-headquartered PhonePe at an upfront valuation of $12 billion. Walmart-backed PhonePe has previously said it plans to raise up to $1 billion as part of its ongoing funding round.

“We are excited to continue our partnership with PhonePe as they lead the digital payments sector in India, a market we believe is still in its early stages with significant growth potential going forward,” Scott Shleifer, a partner at Tiger Global, said in a statement.

With a valuation of $12 billion, PhonePe is India’s most valuable fintech startup. It competes with Google Pay and Paytm. Paytm, which expects to reach $1 billion in revenue by March this year, is currently valued at $4.5 billion.

PhonePe, to be sure, is the clear leader in the mobile payments market on UPI, a network built by a coalition of retail banks in India. UPI has become the most popular way Indians shop online, processing more than 8 billion transactions a month. Seven-year-old PhonePe commands about 50% of all these transactions.

One concern for PhonePe’s growth was Indian regulators enforcing a market capitalization check on each player, but the deadline for the new guidelines was extended last month and will now not take effect until 2025, giving PhonePe another two years of rapid growth.

PhonePe is slowly using its large 300 million user base to cross-sell them a range of products, including insurance. There is also speculation that PhonePe may eventually try to become a bank, which in part better justifies its current valuation. PhonePe had revenue of $234.3 million in the first nine months of 2022.

PhonePe projects revenue of $325 million for calendar year 2022 and $504 million for 2023, according to a valuation report prepared by accounting firm KPMG and filed by PhonePe last month.

The startup does not expect to turn EBIDTA positive, a key profitability metric, until calendar year 2025, KMPG wrote in its valuation report. PhonePe’s finances and calculations from the valuation report have not previously been reported.

“We are privileged to have a large set of leading global investors, both existing and new, who believe in our mission to build massive technology platforms to bring financial and digital inclusion at scale in India,” said Sameer Nigam, Co-Founder and Managing Director director of PhonePe, in a statement.