PhonePe gets $28 million funding from parent Flipkart

Flipkart has invested $28 million in UPI payments app PhonePe in its latest funding round, two months after it received about $59.6 million from its Singapore entity, PhonePe Private Limited. The Bengaluru-based startup had also received $56 million from Flipkart in November last year.

PhonePe’s Singapore entity PhonePe Pte Ltd has received a fund infusion of $28 million from parent Flipkart last week, according to the regulatory filings accessed by Mint. This is the first round of funding which the company has raised this financial year.

Two people close to the company said, on condition of anonymity, that a larger round of fund-raising is expected in the coming months, which would be upwards of $100 million.

This fresh funding of $28 million comes just two months after the Bengaluru-based payments platform had received ₹427 crore from its Singapore entity, PhonePe Private Limited.

The company had also raised several tranches of funding last year, around ₹585.66 crore from its Singapore-based parent in December and another ₹698 crore in July, last year.

A PhonePe spokesperson declined to comment on the fund-raising.

In a recent interview with Mint, PhonePe co-founder and CEO, Sameer Nigam has said that the payments platform has a line of sight to becoming profitable by 2022 and will file for an IPO in 2023.

However, the current situation around covid-19 has affected the digital payments industry, with PhonePe also witnessing a decline of 35% on overall transactions on its platform.

PhonePe also said that in spite of the tough times, the company will not stop investing in advertising and has recently signed in with Doordarshan and other regional channels to run brand advertisements.

It has also been relying on its O2O (Offline-to-Online) strategy which it started focussing on in 2018, and trying to help users understand which kirana stores are open and delivering, in the current lockdown.

According to the company it will start monetising on its O2O strategy as well as look at revenue streams from Financial Services, commissions from its in-app ‘Switch’ platform as well as Advertising on the app in the coming months as it looks to become profitable.

PhonePe also recently said that it is working with delivery fleets like Swiggy Genie to meet its offline network stores and deliver goods to customers, during the current situation.

Recently, the Flipkart-owned payments entity also said that it will end this financial year with more than 275 million users and gather another 220 million in the next two years.