PhonePe raises $100 mn in additional funding at $12 bn valuation

This follows $350 million in capital from General Atlantic as a part of an ongoing fundraise with a target of raising up to $1 billion in all

Walmart-owned fintech firm PhonePe has raised another $100 million in primary capital from Ribbit Capital, Tiger Global and TVS Capital Funds, at a pre-money valuation of $12 billion. The new investment follows the recent $350 million primary fundraise that closed on January 19. Ribbit Capital and TVS Capital are new investors, say sources. The infusion comes at a time when startups are facing a funding winter and macroeconomic uncertainty.

PhonePe plans to use the funds to scale its payments and insurance businesses in India. It will also launch and aggressively scale new businesses like lending, stockbroking, ONDC-based shopping and account aggregators over the next few years.

“We are privileged to have a great set of leading global investors, both existing and new,” said Sameer Nigam, CEO and Founder of PhonePe. “They believe in our mission of building massive technology platforms to bring at-scale financial and digital inclusion in India.’’

PhonePe started its latest fundraise with a target of raising up to $1 billion in capital, post its domicile shift to India. With this second tranche, it has already raised $450 million within six weeks. The firm expects further investments from leading global, and prominent high-net-worth Indian investors in due course.

“PhonePe lives by the same values as we do at Ribbit. We both believe that better money makes life better,” said  Micky Malka, Founder of Ribbit Capital. “PhonePe’s relentless pursuit of this principle in serving consumers and businesses all across India is a mission to live for.”

Scott Shleifer, Partner, Tiger Global said PhonePe is leading the digital payments sector in India. “India is a market we believe is still in the early stages with significant growth potential ahead,” he said.

Gopal Srinivasan, Chairman and Managing Director, TCF said PhonePe’s strong growth in financial services across payments, insurance and lending with unopened doors to two massive opportunities through ONDC and Appstore, were key reasons in its investment thesis.

The Bengaluru-based unicorn recently raised $350 million in funding from General Atlantic at a pre-money valuation of $12 billion, making the Walmart-owned start-up the most-valued financial technology (fintech) player in India. Other investors which backed PhonePe include Qatar Investment Authority, Microsoft, Tiger Global and a couple of smaller hedge funds.

However, PhonePe recently said its investors had to pay about Rs 8,000 crore in taxes to allow the fintech firm to domicile in India from Singapore.

Last year, PhonePe completed three steps to move its domicile to India. It had moved all businesses, including insurance and wealth broking, and subsidiaries of PhonePe Singapore to PhonePe Pvt Ltd-India.

Nigam said at least 20 unicorns have already reached out to PhonePe along with their investors looking for ways to move back to India. They have said if the law becomes smoother, they would like to move domicile to the country. He said this is a testament to the fact that India as a market is becoming very very attractive.