PhonePe among top fintech companies with $1.3 trillion total payment value: Walmart (2024)

Walmart, the world's biggest retailer, said its digital payments firm PhonePe has a total payment value (TPV) of $1.3 trillion, equalling some of the largest fintech players in its home market of the US, indicating the Indian firm’s market cap potential when it lists.

"PhonePe is doing roughly $1.3 trillion in total payment value. And that is at the same scale as the largest fintech players in the United States, to put that in context, that have market caps that are in some cases, north of $100 billion," John David Rainey, chief financial officer at Walmart said during Morgan Stanley Global Consumer and Retail Conference. "PhonePe could be one of the leading payment companies in the world, certainly outside of China in the near future."

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Walmart had taken over PhonePe as part of its 2018 acquisition of ecommerce firm Flipkart. Unified Payments Interface (UPI), introduced in 2016, has been a game changer in the payment ecosystem in India, easing payments and transfers, and playing a key role in digital adoption in the country.

PhonePe, which controls half of India’s payments market, was hived off from Flipkart a year ago. In 2023 itself, it raised $850 million from investors including private equity firms General Atlantic, Ribbit Capital and Tiger Global.

In FY23, PhonePe posted a 77% rise in revenue at Rs2,914 crore while Flipkart's revenue grew 9% to Rs56,013 crore on a net loss of Rs4834 crore.

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Walmart, which has been weighing a public issue for Flipkart for more than two years, said it has still to finalise a timeframe, and would instead focus on improving the Indian online retailer’s financials.

"Each of them (Flipkart and PhonePe) is at some point likely to launch an IPO. And as they inch towards that, you will likely see improvements in profitability as well. And so, part of the improvement in our P&L is the reduction of losses and their P&L as we consolidate," Rainey said. "But these are two companies that by themselves could be very, very attractive from a market capitalization perspective."

Walmart spent $3.5 billion to boost its stake in Flipkart to 80.5% two quarters ago. It also pumped in an additional $200 million in PhonePe at a pre-money valuation of $12 billion.

A report by Bernstein Research said India’s e-commerce market could double in size to $133 billion by 2025, with three leading players - Flipkart, Amazon and Reliance Industries - controlling more than 90% of the market, up from 70% now.

PhonePe has a leading 47.2% share of UPI transactions in terms of volume and 50% in value, according to the National Payments Corporation of India (NPCI). In March this year, PhonePe hit $1 trillion in annualised total payment value run rate helped by increasing share in UPI. The company said it is also making significant investments in new businesses such as insurance and wealth management.