General Atlantic invests another $100 million in PhonePe

General Atlantic has poured another $100 million in PhonePe, three months after leading a $350 million investment in the Indian fintech startup that has so far raised $750 million as part of the ongoing financing round.

Walmart-backed PhonePe disclosed the investment in a filing with the local regulator on Wednesday. A company spokesperson confirmed the investment. The ongoing round values the Bengaluru-headquartered startup at $12 billion.

At a $12 billion valuation, PhonePe is India’s most valuable fintech startup. It competes with Google Pay and Paytm, the latter of which is currently valued at nearly $5 billion.

PhonePe, which completed a full separation from the e-commerce giant Flipkart last year, dominates transactions on UPI, a network built by a coalition of retail banks in India. UPI is the most popular way Indians transact online — it processes more than 8 billion transactions a month. Google’s GPay and PhonePe currently process more than 80% of all UPI transactions.

Seven-year-old PhonePe commands about 50% of all these transactions and it’s not slowing down. The company said earlier this year that it was on pace to process transactions worth $1 trillion annually.

Walmart, which also owns a majority share in e-commerce giant Flipkart, said earlier this year that the separation of Flipkart and PhonePe was “very analogous to eBay and PayPal, where each of them operating independently can pursue their own initiatives.”

The investment comes at a time when PhonePe is aggressively expanding its product offerings. The startup earlier this month launched a hyperlocal commerce app, called Pincode, that is powered by the Open Network for Digital Commerce (ONDC), an Indian government initiative striving to democratize the e-commerce landscape by offering a zero-commission platform.

PhonePe said it will “invest significant effort” in Pincode and in “enabling every Indian shopkeeper spread across every nook and corner, over the next few years.” The startup is also increasingly trying to cross-sell its 450 million registered user base products such as insurance and wants to expand to wealth management, lending, stockbroking, ONDC-based shopping and account aggregation businesses.

A concern for PhonePe’s growth was the National Payments Corporation of India, which oversees the UPI network, enforcing a check on the market share of each participating player. However, NPCI has extended the deadline until 2025, which has paved the way for another two years of fast growth for PhonePe. Additionally, Reserve Bank of India, the country’s central bank, has abandoned its plans for a high-profile project that intended to rival UPI.

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