E-Commerce

PhonePe Gets $101 Million Boost From Its Parent Company

PhonePe

Flipkart’s digital payments arm, PhonePe, has raised $101 million from its Singapore-based parent company. PhonePe which was acquired by Flipkart, which is owned by Walmart, has been yielding productive results for the global giant. Earlier in the month, the company was reportedly looking to raise $1 Billion which would take its valuation to a whopping  $10 Billion, making it one of the most valued startups in the country.

PhonePe Singapore has infused the funds in the Indian entity by subscribing to 2,022,946 shares in the latter at ₹3440 per share. Interestingly, the investment has come after PhonePe founders, Rahul Chari and Sameer Nigam, increased their equity stake in the company.

PhonePe is an Indian e-commerce payment system and digital wallet company headquartered in Bangalore, India. It was founded in December 2015, by Sameer Nigam, Rahul Chari and Burzin Engineer. PhonePe app went live in August 2016 and was the first payment app built on Unified Payments Interface (UPI).

The PhonePe app is available in over 11 Indian languages. Using PhonePe, users can send and receive money, DTH (direct to home)recharge, recharge mobile, data cards, make utility payments, buy gold and shop online and offline. In addition, PhonePe also allows users to book Ola rides, pay for Redbus tickets, order food on Freshmenu, eat, fit and avail Goibibo Flight and Hotel services through micro-apps on its platform.

PhonePe is accepted as a payment option across 5 million offline merchant outlets covering food, travel, groceries, movie tickets, etc. The app crossed 150 million user mark recently, and also crossed 2 billion transactions in April 2019.

In March 2019, Flipkart gave in-principle approval to PhonePe to operate as a separate entity. It can now set up an independent board and raise fresh funding from external investors.

While Paytm leads the digital payments sector with a 43% market share (until March 2019), PhonePe reportedly holds a  33.4% share in the segment. However, the recent figure shows that Phone Pe is catching up quickly on to its competitor.

According to NPCI (National Payments Corporation of India) figures this year in June, the volume of the transaction on its UPI (Unified Payments  Interface ) platform was 754.54 million as compared to 246.37 million transactions in June 2018. Also, the amount of money transferred has grown from  40,834.03 Cr to 1,46,566.35 Cr over the period mentioned before.

NITI Aayog’s “Digital Payments (2018 edition)”, India’s digital payments industry is estimated to grow to $1 Tn by 2023. It also suggested that the value of digital payments will likely jump from the current 10% to over 25% by 2023. Digital payments at physical retail stores in India are estimated to grow at an annual average pace of more than 20% through 2023 to $135 billion, according to KeyBanc Capital Markets’ estimates.

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