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PhonePe Aims For $10 Bn Valuation, May Raise Funds From KKR, General Atlantic

PhonePe Aims For $10 Bn Valuation, May Raise Funds From KKR, General Atlantic

KKR & Co, General Atlantic LLC, Tiger Global and Tencent may invest in PhonePe

The fresh funds will help PhonePe cash in on the growth in digital payments

PhonePe crossed 1 Bn transactions in December 2018

Digital payments company PhonePe is looking to fill its kitty at a valuation of $10 Bn. In the heated digital payments scenario of India, PhonePe is reportedly looking to raise fresh funds from private equity (PE) firms KKR & Co, General Atlantic LLC, Tiger Global and Tencent.

KKR is reportedly looking to add more tech-focused investments in its India portfolio. But this investment may be a huge jump for the firm with PhonePe looking for a nearly 10x growth in its valuation. It was last valued at $1.5 Bn in May 2018 when Walmart acquired Flipkart.

The fresh funding plan has been in works for months, as last reports surfaced in October 2018 that Flipkart and PhonePe are looking to onboard strategic investors.

The fresh funds will help PhonePe cash in on the growth in digital payments. It is looking to closely compete with rival, Paytm whose valuation reached $16 Bn in the last round. The fresh funds may also enable PhonePe to form a consortium of investors who can offer big doses of fresh funds for its long battle in the digital payments turf.

A PhonePe spokesperson denied commenting on rumours to Inc42.

PhonePe is one of the essential parts of Walmart’s reason to invest in the Flipkart group last year. Interestingly, Wallmart’s entry had seen a major reshuffle in the management teams of Flipkart, its fashion subsidiaries Myntra and Jabong, but no such big movement has come to the PhonePe team.

Flipkart had bought PhonePe from its founders aka ex-flipsters Sameer Nigam, Rahul Chari and Burzin Engineer in 2015. The company claims to have crossed a billion transactions in December 2018. It offers peer-to-peer transfer, recharges, bill payments, gold purchases, among others.

The total investment by Flipkart in PhonePe is $184.1 Mn, out of its $500 Mn commitment to grow the company. The company is also exploring offline payment space and claims to have over 1 Mn offline merchants on its platform.

Apart from providing a point-of-sale device for offline vendors, the company is diversifying its offline offerings based on the requirements of the merchant. PhonePe claims to have over 150 Mn users and provides them with its “super-app”, which integrates 25 large digital apps including Goibibo and OYO.

At the same time, it has also expanded its offerings to wealth management with a focus on millennials and will involve partnerships with existing players rather than doing a lot of the work in-house as a separate entity.

The digital payments market in India has been booming with companies such as Paytm, PhonePe and Google Pay leading the charge. A report by Credit Suisse predicted that India’s digital payments industry is expected to grow five fold to reach $1 Tn by 2023 and PhonePe looks all charged up to challenge payments giant Paytm.

[The development was reported by Livemint.]