Walmart-Backed Indian Digital Payment Company Sees Revenue Surge Of 77% In FY23

Walmart-backed PhonePe, an India-based digital payments company, reported a 77% surge in consolidated revenue in the financial year 2023 as more consumers started using digital payment methods to send and receive money in the country.

The fintech company said its revenue for FY23 was around $350 million (INR 29.14 billion), up from $197.7 million (INR 16.46 billion) in the previous year.

“FY 22-23 has been a pivotal year for PhonePe – we continued our rapid top-line growth, diversified our revenue from nonpayment businesses, progressed towards positive EBITDA (before ESOP cost) and executed key strategic actions geared towards long-term future growth,” PhonePe said in a statement Wednesday.

“We recorded a consolidated revenue of INR 2,914 Crs in FY23, which represents a 77% YoY growth over FY22 revenue of INR 1,646 Crs,” the statement added. This growth is led primarily by our focus on market expansion and leadership in the digital payments market, especially in major revenue-contributing use cases like money transfers, mobile recharges and bill payments.”

PhonePe was founded in December 2015 and later acquired by Indian e-commerce giant Flipkart, which eventually transferred its stake to its parent company Walmart. PhonePe also completed the process of moving its headquarters from Singapore to India this year.

The company said they completed three “critical actions” in FY23 that laid a solid foundation for their future growth.

“Firstly, we completed our full spinoff from Flipkart Group. Secondly, we moved our domicile to India from Singapore. Thirdly, we concluded an equity fundraising of INR 7,021 Crs from long-term investors like General Atlantic, Walmart, Ribbit Capital, TVS Capital Funds and Tiger Global, pegging PhonePe at a $12 billion pre-money valuation,” the company said. “These actions enable us to invest in India for the long-term and create a sustainable ecosystem and shareholder value in India.”

India is one of the world’s front-runners in instant digital payments with about 40% of all payments being made digitally.

PhonePe, which has more than 490 million registered users, had a 50.54% market share in the number of UPI (Unified Payments Interface) transitions in March. UPI is India’s instant money transfer system that allows account-to-account transfers using apps like PhonePe, Google Pay, Paytm and WhatsApp Pay. UPI is open and does not limit users to a single company like, for instance, how China’s Alipay works.

Payment systems in China are seamless, making the country another frontrunner in digital payments. However, its market is dominated by private digital wallet giants WePay and AliPay.

In India, UPI makes it simple for anyone to enter the digital payments space. There are more than 9,000 fintechs in India, according to a report from Elevation Capital and McKinsey. India now has the world’s third largest fintech ecosystem after the U.S. and the U.K., the report said.