PhonePe tops up its wallet with $60m from Singapore-based parent entity

Soon after putting all its muscle behind homegrown e-tailer Flipkart, its American parent Walmart is making sure it doesn’t neglect its digital payment subsidiary, PhonePe. The world’s largest retailer has big plans for PhonePe, which landed in its lap when it acquired Flipkart in a US$16 billion deal in 2018.

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As per regulatory filings sourced by Paper.vc, PhonePe is getting a lift up with US$60 million in fresh funding from Singapore-based parent entity PhonePe Private Ltd. According to its filings with the Indian regulator, PhonePe has allotted 1 million shares to the holding firm in lieu of the investment.

In October 2019, Walmart reportedly was preparing to spin off PhonePe as an independent unit.

PhonePe competes with SoftBank-backed payments company Paytm as well as global giants such as Google Pay and Amazon Pay for India’s soon-to-be US$1 trillion digital payments market. With the ever-increasing competition in the digital payments market and major players changing their focus from targeting P2P transactions to peer-to-merchants, PhonePe has been preparing for a long fight ahead. Over the last 12 months, PhonePe has raised almost US$400 million across five rounds, the last one being the recent US$60 million funding.

It is to be noted that the company has been reeling under heavy losses while investing in acquiring customers and merchants and diversifying its services. The company made a loss of US$266 million (19 billion rupees) on revenue of just US$25.7 million (1.84 billion rupees) in the financial year ended March 31, 2019. Last week, in the post-earning presentation to analysts in New York, Judith Mckenna, CEO of Walmart International, said PhonePe’s annual payments value stood at US$180 billion with nearly 20 million daily users on the platform.

In a bid to slowly move toward creating a profitable business, PhonePe has been upgrading its platform and adding revenue channels here and there.

Earlier this month, the Bengaluru-based company launched a chat feature so that users can have a conversation with each other while requesting money or confirming the receipt of payment without needing any other messaging app. The in-payment chat tool, open to its over 175 million users, is integrated within the money transfer flow feature on PhonePe. In January, it partnered with 500,000 neighborhood stores to launch digital ATM feature for PhonePe users, who can go to one of these mom and pop stores and transfer the amount of money they need to the store owner’s PhonePe account to get cash in return.

Since last year, PhonePe has been sharpening its focusing on providing fintech services such as insurance and mutual funds.

This report was first published on KrAsia.