PhonePe Becomes India¡¯s Most Valuable Payments Firm As It Enters Decacorn Club With $12 Billion Valuation

Walmart-backed PhonePe has said today that it raised $350 million from private equity firm General Atlantic at a $12 billion valuation, making it India's most valuable payments firm.

A second tranche of investments from marquee global and Indian investors is expected to close next month, a PhonePe spokesperson said, as per a Reuters report.

PhonePe Joins Decacorn List

The latest $12 billion valuation means PhonePe has also entered India's decacorn club, which already has four companies- Nykaa, Swiggy, Flipkart and BYJU's.

For the unversed, decacorn is a term used for companies valued at $10 billion or more. Whereas companies valued at $1 billion or more are termed unicorns.

1. Swiggy

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Last year, Swiggy had turned into a decacorn after a funding round in which it raised $700 million, led by Invesco. Swiggy¡¯s valuation got almost doubled to $10.7 billion with that in January 2022.

After its rival Zomato did so in July 2021, now Swiggy is planning to roll out its IPO this year.

2. Nykaa

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In November 2021, upon its stellar debut in the stock market through IPO, Nykaa's valuation shot up to nearly $ 13 billion. Nykaa's shares had soared 89.2% to Rs 2,129, helping the giving the company reach a valuation of Rs 95,437 crore ($12.86 billion) at that time, thus entering the decacorn club.

3. BYJU's

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In June 2020, the now IPO-bound BYJU's entered the decacorn club following a funding round led by Silicon Valley venture capitalist Mary Meeker¡¯s Bond Capital. The estimated $100 million investment took Bangalore-based Byju¡¯s valuation to $10.5 billion at that time.

4. Flipkart

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It was nearly a decade back in November 2014 when Flipkart became a decacorn when it closed a $500-600 million fresh financing round led by its existing large investors at the mammoth valuation of $10 billion. It's fair to say that Flipkart had become a decacorn at a time when very few companies were even in the unicorn club.

5. PhonePe

The latest to enter the decacorn list in India is PhonePe. With the recent funding which took its valuation to $12 billion, PhonePe will use the funds for infrastructure and new businesses, including insurance, wealth management and lending, founder and CEO Sameer Nigam said in a statement.

While the Indian government has pushed the country's cash-loving merchants and consumers to adopt digital payments, it wants to control the clout of payments firms, seeking to cap any one firm's market share at 30% by the end of 2024.

Also Read: Explained: How RBIs Digital Rupee (e?) Is Different From UPI

PhonePe Has Biggest Market Share In India

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PhonePe had a 46% market share in December, according to National Payments Corporation of India (NPCI) data. Alphabet-owned Google's payments app Google Pay had a 34% share and SoftBank-backed Paytm had 14.7%, as per a Reuters report.

Paytm, which has a current market value of $4.2 billion, has recently reported strong growth in its financial services such as buy-now-pay-later, and personal and merchant loans.

PhonePe, in which U.S. retail giant Walmart took a majority stake in 2018, shifted its registered headquarters from Singapore to India last year and also completed its separation from Indian e-commerce giant Flipkart.

The company's shift to India, according to some reports, has been to ensure an easier entry into the country's highly-regulated financial services industry. However, Walmart was recently given a mammoth $1 billion tax bill after PhonePe's shift to India.

Also Read: List Of 10 Big IPOs Expected To Be Rolled Out In 2023

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