The investment, according to PhonePe, is the first installment of a $1 billion capital round.

Financial and payment services unicorn The Walmart-backed business PhonePe has secured $350 million in a fresh round of investment from General Atlantic at a valuation of over $12 billion, making it the most valuable fintech in India. In a statement on January 19, the firm stated that it will be raising as much as $1 billion in the current round in installments.

PhonePe is considering a $12 billion fundraising from General Atlantic.

The fundraising effort by PhonePe comes after the business announced its spin-off from e-commerce startup Flipkart in December. Additionally, the Flipkart spin-off completes PhonePe’s 2022 transformation to a totally Indian-domiciled business.

PhonePe has now joined the ranks of startups like Flipkart, which Walmart purchased, Paytm, which went public last year, Byju’s, and Swiggy as a decacorn, or startup valued at more than $10 billion. Razorpay, digital payments and neo-banking unicorn that was most recently valued at over $7.5 billion, has also been exceeded in terms of valuation by PhonePe.

In the middle of a startup financing winter when investors are writing smaller checks as the macro climate deteriorates, the latest fundraising is a rare example of a late-stage deal. PhonePe was valued at $5.5 billion when Flipkart split it off into an independent company. At the time, Flipkart e-commerce had invested $700 million.

The timing of PhonePe’s fundraising effort coincides with Paytm, its closest rival, having seen its valuation decline by more than 60% since going public in November 2021, raising concerns among public shareholders about the company’s potential to achieve company-level profitability. As of January 19, Paytm has a total market value of slightly over $4.3 billion.

However, Paytm generates far more money than PhonePe. Paytm and PhonePe each earned revenues of Rs 3,892.40 crore and Rs 1,646 crore, respectively, as of FY22. In addition, PhonePe reported a loss for FY22 (2021-2022) of Rs 2,014 crore, an increase from Rs 1,729 crore for FY21 (2020-21). In contrast, Paytm recorded a net loss for FY22 of Rs 2,325 crore, an increase from Rs 1,560 crore in FY21.

The Reserve Bank of India (RBI) has cracked down hard on the fintech industry, impacting firms across the board. This makes PhonePe’s financing effort for the company extremely difficult.

Former Flipkart executives Sameer Nigam, Rahul Chari, and Burzin Engineer established PhonePe in 2015. The fintech is the industry leader in Unified Payments Interface (UPI) transactions and has more than 400 million registered users. The corporation has a 47 percent market share in terms of monthly UPI volumes.

Due to its potential to make its payment gateway available to both major offline players and small and medium-sized enterprises, the company will compete with Paytm, Pine Labs, and Razorpay.

PhonePe has purchased GigIndia, WealthDesk, OpenQ, and finished the long-awaited acquisition of IndusOS during the last year.