December 2, 2023

General Atlantic has invested another $100 million in PhonePe, four months after it led a $350 million investment in the Indian fintech startup, which has so far been on track at the height of the global slowdown. raised $850 million in a funding round.

Walmart-backed PhonePe disclosed the investment in a statement Monday. An ongoing funding round values ​​the Bengaluru-based startup at $12 billion. PhonePe hopes to raise as much as $150 million more in an ongoing funding round. General Atlantic invested another $100 million in PhonePe last month.

With a valuation of $12 billion, PhonePe is India’s most valuable fintech startup. It competes with Google Pay and Paytm, which is currently worth nearly $5 billion.

PhonePe, which completed a full separation from e-commerce giant Flipkart last year, dominates transactions on UPI, a network built by India’s Retail Banking Federation. UPI is the most popular way for Indians to transact online – it processes over 8 billion transactions per month. Google’s GPay and PhonePe currently process over 80% of all UPI transactions.

Seven-year-old PhonePe controls roughly 50% of all those deals by value, and the pace isn’t slowing down. The company said earlier this year that it was on track to process $1 trillion worth of transactions a year.

Walmart, which also owns a majority stake in e-commerce giant Flipkart, said earlier this year that the separation of Flipkart and PhonePe would be “very similar to eBay and PayPal, where each operates independently and can pursue its own initiatives.”

General Atlantic is said to have supported a number of Indian companies including Jio, BillDesk, Byju’s, Amagi, NoBroker and Unacademy over the past decade, and plans to deploy at least $2 billion to $3 billion in India over the next five to seven years. People familiar with the New York-based growth equity investor program.

The new investment comes at a time when PhonePe is aggressively expanding its product offering. The startup earlier this year launched a hyperlocal commerce app called Pincode powered by the Open Network for Digital Commerce (ONDC), an Indian government initiative to provide Zero commission platform to democratize the e-commerce space.

PhonePe says it will be “putting a lot of effort” into Pincode and “enabling every Indian shopkeeper everywhere in the next few years.”

PhonePe hopes to leverage its strong registered user base of 450 million by expanding into other financial services, including wealth management, lending, stock brokerage, ONDC-based shopping and account aggregation.

A potential obstacle to PhonePe’s growth is the National Payments Corporation of India (NPCI), the organization that oversees the UPI network, which seeks to impose market share limits on participants. However, NPCI extended the compliance period to 2025, giving PhonePe another two years of rapid expansion.

In another favorable development, India’s central bank, the Reserve Bank of India, has decided to drop a high-profile project that was originally planned to compete with the UPI platform.