PhonePe Receives Significant Investment from General Atlantic

General Atlantic has made a noteworthy investment of approximately $600 million in PhonePe via a secondary transaction, as reported by two individuals familiar with the details. This transaction stands out as one of the most substantial secondary transactions in India’s startup landscape in 2023.

Details of the Investment

“The primary aim of this transaction was to facilitate employees in exercising their ESOPs and fulfilling related tax obligations,” revealed one of the sources, who preferred to remain anonymous. “Importantly, there was no liquidity provided to either employees or founders through this arrangement.”

Previous Funding Rounds

PhonePe’s previous equity round took place in May 2023, where General Atlantic injected $100 million into the company as part of its ongoing fundraising initiatives. This recent funding round has led to a valuation of the fintech giant exceeding $12 billion.

Stake Increase

Reports indicate that General Atlantic’s stake in PhonePe has risen substantially, increasing from approximately 4.4% to 9%. PhonePe has not provided any statement regarding this investment, and queries directed to General Atlantic did not yield a response prior to the publication of this information.

Upcoming IPO and Market Position

The Walmart-owned corporation is gearing up for its public listing, having recently submitted a confidential draft red herring prospectus (DRHP) to SEBI for a planned IPO valued at Rs 12,000 crore. According to reports, this issue will purely consist of an offer for sale (OFS), where major stakeholders Walmart, Microsoft, and Tiger Global will reduce their stakes.

Financial Performance

PhonePe announced revenues of Rs 7,115 crore and an adjusted profit after tax (PAT) of Rs 630 crore for FY25. As per NPCI data, PhonePe dominated the digital payments sector, controlling a 45.64% market share by volume and 48.38% by value as of September.