PhonePe, the digital payments platform owned by Flipkart and based in Singapore, has secured a fresh injection of capital totaling approximately $90 million from its Singapore-based parent company. This investment comes despite reporting a larger consolidated deficit for the 2021-22 financial year.
Capital Allocation and Equity Shares
On November 15, PhonePe’s board of directors passed a resolution to allocate 371,753 equity shares to PhonePe Pvt. Ltd, Singapore, on a rights basis. Each of these shares was valued at Rs. 19,968 INR. This marks the second significant capital raise from the parent company in 2018.
In March, the financial technology firm approved two resolutions to allocate 25 lakh equity shares to PhonePe Singapore, raising $297 million. At that time, the equity shares were valued at Rs. 8,901 each, including a securities premium of Rs. 8,891.
PhonePe’s Financial Performance in FY 2022
PhonePe recently reported its financial results for the 2021-22 fiscal year. The company recorded revenue from operations amounting to Rs. 1,640 crore, representing a significant increase from the Rs. 690 crore reported in the previous fiscal year. However, the company’s overall operating expenses also rose to Rs. 1,683.37 crore from Rs. 725.33 crore, contributing to a net loss of Rs. 1,775.78 crore, up from Rs. 1,730.57 crore in the previous year.
On a standalone basis, PhonePe’s marketing expenses increased from Rs. 535 crore to Rs. 670 crore over the same period.
PhonePe’s Strategic Moves
PhonePe has been making strategic moves throughout the year. In September, the company relocated its headquarters from Singapore to India as part of its preparations to go public eventually. All businesses and enterprises within the PhonePe Group are now fully owned by PhonePe Pvt Ltd, India.
The company has also been actively pursuing acquisitions to bolster its financial and technological platform, aligning with its “super app” ambitions. Notable acquisitions this year include Indus OS, a domestic app and content discovery platform, as well as WealthDesk, OpenQ (a financial advisory platform), and GigIndia (a Pune-based gig worker storefront), all totaling $75 million.
PhonePe has ambitious plans to integrate numerous Indian apps, including Indus App Bazaar, into its PhonePe Switch platform, which already features several mini-apps. Since its foray into financial services in 2017, the app has expanded its offerings, applied for licenses as a mutual fund, and explored the launch of a payment gateway alongside its existing QR code-based UPI payment service and in-app payment system.
As PhonePe continues to expand its presence and offerings, it remains a key player in India’s rapidly evolving digital payments landscape.
Frequently Asked Questions (FAQs)
Q1: What is PhonePe? A1: PhonePe is a digital payments platform owned by Flipkart, headquartered in Singapore. It offers a wide range of digital payment solutions and has expanded its offerings to include various financial services.
Q2: Why did PhonePe relocate its headquarters to India from Singapore? A2: PhonePe moved its headquarters to India in preparation for its eventual plan to go public. This move aligns with the company’s long-term strategic goals.
Q3: What are PhonePe’s “super app” ambitions? A3: PhonePe aims to become a comprehensive digital platform offering a wide array of services beyond digital payments. It seeks to integrate various Indian apps into its ecosystem, creating a one-stop destination for users.
Q4: What is PhonePe Switch? A4: PhonePe Switch is a platform within the PhonePe app that allows users to access a variety of mini-apps and services, such as food delivery, shopping, travel bookings, and more, all within the PhonePe app.
Q5: How has PhonePe’s financial performance evolved in recent years? A5: PhonePe has seen significant growth in its revenue from operations but has also experienced increased operating expenses, resulting in a net loss. The company’s expansion into various financial services and acquisitions has contributed to its evolving financials.
Q6: What are PhonePe’s plans for the future? A6: PhonePe’s future plans include expanding its platform, integrating more Indian apps, and potentially going public. The company continues to explore opportunities to enhance its services and offerings.
PhonePe’s strategic moves and financial performance reflect its commitment to becoming a major player in India’s digital payment and technology ecosystem.
