Fintech platform PhonePe on Friday said that it has raised an additional $200 million in primary capital from Walmart, at a pre-money valuation of $12 billion. The latest fund infusion is a part of the larger, ongoing $1 billion round that the Bengaluru-based company had earlier announced. Of that, the startup has already received $650 million so far, and expects the rest in due course. Its backers also include General Atlantic, Ribbit Capital, Tiger Global and TVS Capital Funds.
PhonePe’s pre-money valuation of $12 billion is more than double of what its close competitor, Paytm, commands in the public market. Walmart’s PhonePe plans to use the funds to build and scale its new businesses like Insurance, wealth management, lending, stock broking, ONDC-based shopping and account aggregators. It will also pump in money to scale its UPI payments in India, including UPI lite and credit on UPI.
The $200 million round also comes at a time when Indian startups, especially consumer-facing ones, across industries, are struggling to raise fresh capital from investors, primarily on the back of rising internet rates. In fact, the number of large deals — that are at or over $100 million each — fell around 50% y-o-y from 92 to 48 in 2022, according to a report jointly published by Bain and Company in and the Indian Venture and Alternate Capital Association (IVCA).
So far this year, along with PhonePe’s fundraise, Indian startups have seen at least two more rounds of $100 million each. On Thursday, eyewear startup, Lenskart signed a definitive agreement to raise $500 million from a wholly owned subsidiary of the Abu Dhabi Investment Authority (ADIA) at a valuation of $4.5 billion, unchanged from its value in 2022, or a flat round. In total, over the past 12 months, Lenskart has raised about $750 million. Even FreshToHome, a direct-to-consumer (D2C) meat delivery startup, had raised $104 million in its Series D round led by Amazon Smbhav and others in February.
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By building products and offerings tailored for the Indian market, PhonePe today has over 400 million registered users, meaning that more than one in four Indians are on PhonePe. The company also has over 35 million offline merchants spread across Tier 2, 3, 4 cities and beyond. The fintech startup had forayed into financial services in 2017, providing users with safe and convenient investing options on its platform. Since then, the company has introduced several mutual funds and insurance products that offer every Indian an equal opportunity to unlock the flow of money and access to services.