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Scoop: In a huge consolidation move, PhonePe may acquire BNPL startup ZestMoney.

This is PhonePe's second significant parent fundraising effort this year. The fintech powerhouse has relocated its headquarters from Singapore in addition to making a number of significant acquisitions to bolster its technological and financial platform play.
PhonePe & ZestMoney

This is PhonePe’s second significant parent fundraising effort this year. The fintech powerhouse has relocated its headquarters from Singapore in addition to making a number of significant acquisitions to bolster its technological and financial platform play.

PhonePe, a digital payments network owned by Flipkart, has received a fresh capital infusion from its Singapore-based parent company, despite reporting a larger consolidated loss for the fiscal year 2021–2022.

The board of the Walmart-backed business decided on November 15 to award a total of 371,753 equity shares to PhonePe Pvt. Ltd., Singapore, on a rights basis in order to raise Rs 742,31,63,904 through a regulatory filing. The price per share for the shares was Rs 19,968.

The equity shares were then valued at Rs 8,901 per share, including a Rs 8,891 securities premium. PhonePe reported independent revenue from operations of Rs 1,640 crore for FY22 in a separate filing on Tuesday, up from Rs 690 crore in the prior fiscal year.

Employee costs increased to Rs 1,683.37 crore from Rs 7,25.33 crore, slightly widening the net loss to Rs 1,775.78 crore from Rs 1,730.57 crore last year. On a stand-alone basis, marketing costs increased from Rs 535 crore to Rs 670 crore.

Until the publication of this article, PhonePe did not immediately respond to inquiries.

What’s in store?

This year has been significant for PhonePe as it moved its domicile from Singapore to India in September as a run-up to its public listing plans. All PhonePe Group businesses and entities are now wholly owned by and consolidated under PhonePe Pvt Ltd, India.  The firm has been eying major acquisitions to boost its financial and tech platform play, or its “super app” plans. 

Earlier this year, the Bengaluru-based firm completed its all-cash acquisition of Indus OS, a homegrown app and content discovery platform, besides acquiring three other ventures—investment platform WealthDesk and wealth management platform OpenQ for a combined $75 million, and Pune-based marketplace for gig workers GigIndia.  PhonePe intends to integrate hundreds of thousands of Indian apps such as Indus App Bazaar to its PhonePe Switch, which already has some mini apps integrated.

Since its venture into financial services in 2017, the app has introduced a series of offerings including third-party mutual funds, insurance products, tax-saving funds, liquid funds, international travel insurance, and life insurance, besides utility payments.  It has also applied for mutual fund and Payment Aggregator licences.

In September, Moneycontrol reported that the company was looking to launch its own payment gateway as an extension to its current QR code-based UPI payment service and in-app payments.

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