Flipkart-owned digital payments company PhonePe has raised about Rs 427.25 crore from its parent firm in another round of funding, according to RoC filings accessed by YourStory. PhonePe Pvt Ltd, Singapore (formerly Flipkart Payments Pvt Ltd) was allotted 10,07,670 shares and the total amount paid was Rs 427,25,20,800, the filings showed.
In July last year, PhonePe had received fund infusion of about Rs 698 crore from its parent firm, while another Rs 585.66 crore was pumped into the company in December. The latest fund infusion is expected to help PhonePe to compete against the likes of Paytm, Google Pay, Amazon Pay, and others in the burgeoning payments segment in India.
PhonePe claims to have over 175Mn users and provides them with its “super-app”, which integrates 50 digital apps including Goibibo and OYO. PhonePe earlier said that growth has come riding on the back of the exponential expansion of PhonePe’s merchant network, both online and offline.
PhonePe platform, which registers close to 600 million transactions every month, plans to scale three times by 2020 end. In February, the Bengaluru-based firm also set aside Rs 800 crore for brand marketing campaigns in 2020. This marks PhonePe’s largest-ever investment into marketing efforts to date. In December last year, PhonePe said that it had crossed five billion transactions on its app. The company achieved this milestone owing to the reach and adoption of the platform across the country.
In 2019, the company also launched a new feature ‘Switch’, which allows users to use apps for groceries, shopping, food and travel bookings without downloading any other application. With this, PhonePe planned to increase engagement time on its own app. It also introduced a new concept of stores, bringing merchants accepting payments via PhonePe to the app as virtual stores. Users can now directly call stores, or order online and pay at the store, without the need to scan QR codes.
Most recently, PhonePe launched UPI PhonePe ATM service, with which users can send money to merchants using the app to get cash equivalent to the amount. PhonePe’s entry into digital ATM business has left parent company Walmart quite impressed. The US-based retail giant is rooting for PhonePe to be “India’s largest transactional platform anchored in payments.”
The company has also shifted its focus on monetising the platform to eye profitability. 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. According to Nigam, PhonePe has shifted its focus from giving cashback to providing merchant coupons, which has helped PhonePe to monetise its platform.
There have also been reports that Flipkart is looking at hiving off PhonePe into a separate entity, a move that would help the payments company raise funds independently.
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