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Phonepe CEO Sameer Nigam Has His Eyes Set On Profitability: Report

Phonepe CEO Sameer Nigam Has His Eyes Set On Profitability: Report

With an additional $1 Bn fund, Phonepe can become profitable, Nigam said

Phonepe is currently planning to raise more funds

Phonpe is planning to launch insurance services on its platform

Since its inception in 2015, Flipkart-owned digital payments platform, Phonepe, has changed the way how Indians used to transact digitally. Though it has helped millions of Indians to transact in a safer and faster way, however, on its part, Phonepe has faced problems such as cash burn and mounting losses.

However, Sameer Nigam, CEO and cofounder of Phonepe believes that the company can achieve profitability in the next three or four years with the help of an additional $1 Bn fund. “We need capital to grow. We believe we have something good going on here,” Nigam was quoted as saying by Business Standard.

Citing that profitability is important to him, Nigam said that he wants to make sure that Phonepe is a viable business. Phonepe is currently discussing two ways for raising new funds — from investors of Walmart and Flipkart such as Tencent and Tiger Global or from other outside investors.

Phonepe’s Monetisation Plans

According to Nigam, Phonepe has shifted its focus from giving cashback to providing merchant coupons, which has helped Phonepe to monetise its platform. “Rewards can be monetised, brand ads can be placed. Brands also want to break the clutter by placing their product on the top,” he added.

Another source of earning for Phonepe has been through distributing financial services. By providing these services, Phonepe earns a distributor fee from the companies. As of now, the platform is providing only tax-saver mutual funds. However, Nigam said that the company is planning to foray in other categories such as liquid and debt funds.

Highlighting that there’s a huge opportunity in the wealth management space, Nigam said that with increasing disposable income in India, individuals have started to shift their focus from savings to growth. To further capture this burgeoning segment, Nigam revealed that Phonepe will also launch insurance services on its platform.

Wallets Create Closed Ecosystem

The CEO further added that he wants Phonepe to be India’s largest platform. Claiming that in the overall approach, Phonepe brings different prospects than other payment companies, who are usually focussing more on wallets, Nigam said that wallet companies are trying to create a closed ecosystem. “For us, payments were a capability to be solved, so that customers come to the platform,” he added.

Explaining more about how Phonepe wants to become the largest transaction platform, Nigam said that the company wants to enable every business to reach Indian customers.

For a digital businessese, since the cost of acquiring new customers is very high, Phonepe wants to help these companies to have a democratised customer acquisition through its Switch platform. “We want digital businesses to have a democratised customer acquisition and engagement platform,” he was quoted as saying.

Founded in 2015 by Nigam, Rahul Chari and Burzin Engineer, Phonepe has recently crossed 5 Bn Unified Payments Interface (UPI) transactions on its platform. The mobile app, which started as a payments only app has now become a super app that integrates over 75 other digital apps such as Goibibo, Oyo, among others on its platform.