Walmart’s PhonePe gets another cheque from Singapore parent; raises funding days after spin off

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Updated: Dec 14, 2020 4:51 PM

The latest investment takes the overall fund infusion in PhonePe, which competes with Alibaba-backed Paytm, Google Pay, MobiKwik, and most recently Facebook-owned WhatsApp Payments in India, to a little over $1.6 billion.

While rivals Amazon Pay India and Paytm posted losses of Rs 1,868.5 crore and 2,833.18 crore in FY20, respectively, Google Pay India reported an over sixfold increase in net profits y-o-y to Rs 32.86 crore during the year.

Days after Walmart-owned Flipkart partially spun-off its digital payment entity PhonePe involving $700 million investment into it, the latter has now raised around $20.3 million (Rs 150 crore). The investment has been made by its Singapore-based parent company PhonePe Private Limited earlier known as Flipkart Payments Private Limited, showed regulatory filings sourced from business intelligence platform Tofler. Prior to the two investments, PhonePe had raised capital from Flipkart in April and from the parent entity in February this year. The latest investment takes the overall fund infusion in PhonePe, which competes with Alibaba-backed Paytm, Google Pay, MobiKwik, and most recently Facebook-owned WhatsApp Payments in India, to a little over $1.6 billion.

1,98,755 equity shares of face value of Rs 10 and securities premium of Rs 7,537 per share aggregating to Rs 150,00,03,985 were allotted to PhonePe Private Limited, Singapore on rights basis, the filing read. PhonePe was valued at $5.5 billion during the spin-off exercise with Flipkart remaining the majority shareholder. The company had announced in February that it would spend around $111 million (Rs 800 crore) on marketing in the calendar year 2020.

Also read: Facebook India’s FY20 profit, revenue growth rates fall from previous year; expenses up 42%

PhonePe claimed to have more than 250 million registered using its app to send and receive money, recharge mobile, DTH, data cards, pay at stores, and more. According to Walmart, Flipkart and PhonePe, which saw ‘all-time high’ monthly active users, helped its international businesses post $29.6 billion in net sales in Q3 ended October 31, according to a statement. “Flipkart and PhonePe had strong results for the quarter. The number of monthly active customers for these platforms is at an all-time high,” Walmart President, CEO, and Director C Douglas McMillon had said during an earnings call.

PhonePe had entered into the financial services segment in 2017 with the option for customers to buy gold on its app and later expanded to mutual funds, tax-saving funds, liquid funds, international travel insurance, and Corona Care insurance product. The transaction value in India’s digital payments market is expected to reach $74 billion in 2020 at an annual growth rate of 16.7 per cent to grow to $137 billion by 2024, as per Statista. Digital commerce, being the largest market segment, is projected to have a total transaction value of $57.5 billion in 2020.

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