PhonePe is an Indian payments and financial services unicorn backed by Walmart.

PhonePe is negotiating a fundraise at a valuation of over $12 billion, with General Atlantic likely to lead the round with an investment in the range of $450 – $500 million. If the funding goes through, it would catapult PhonePe to the position of the most highly-valued fintech in India. (Moneycontrol)

People in the know also told Moneycontrol that PhonePe’s IPO plans are still a couple of years away, and the proposed funding is not intended to be a pre-IPO round.

PhonePe was formed by Flipkart with an investment of $700 million, and later hived off as a separate entity partially divesting its stake in favour of parent Walmart (NYSE: WMT) at a valuation of $5.5 billion in 2020.

The round would be a creditable raise given the cautious stance adopted by VC and PE investors amidst a volatile and deteriorating macro environment, and a global collapse in the valuations of listed fintechs. This trend came in sharp focus after Prosus-owned PayU jettisoned its $4.7 billion BillDesk deal.

The raise would also suffer from an unfavorable backdrop – the stock performance of PayTM (NSE: PAYTM), which has slumped over 60% from its IPO pricing in November 2021.

However, PhonePe’s numbers may be attractive for strong VC’s looking for bargains amongst falling valuations. The fintech has over 400 million registered users and a leadership in Unified Payments Interface (UPI) transactions. The company has a market share of 47 percent in monthly UPI volumes.

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