General Atlantic Invests $600 Million in PhonePe as It Prepares for IPO

PhonePe has secured a fresh $600 million investment from General Atlantic, significantly boosting the private equity firm's shareholding as the digital payments giant moves closer to its upcoming $1.35 billion IPO, as per the news reports. This infusion indicates increasing investor confidence in PhonePe’s growth and profitability in the fintech space.

Investment Details and Purpose Ahead of IPO

The $600 million funding primarily comprises secondary transactions and has doubled General Atlantic’s stake in PhonePe from 4.4% to 9%. This round aims to support PhonePe employees in managing their tax obligations tied to Employee Stock Option Plans (ESOPs). Notably, none of the company’s founders or existing investors sold their holdings as part of this deal.

General Atlantic's Continued Backing

General Atlantic has invested a total of $1.15 billion in PhonePe since 2023, indicating long-term support and belief in the platform’s future prospects. The fresh funding comes at a crucial time as PhonePe gears up to file its draft red herring prospectus (DRHP) with SEBI for its ₹12,000 crore ($1.35 billion) public listing.

Read More: Zoho to Enter Consumer Payments Space With New Payments App ‘Zoho Pay’!

PhonePe’s Business Growth and Financial Performance

PhonePe has reported strong financial performance ahead of the IPO. In FY25, its revenue rose by 40% year-on-year to ₹7,115 crore. The company also reported ₹1,202 crore of free cash flow from operations. These gains reflect PhonePe’s strategic expansion into financial services beyond digital payments.

Upcoming IPO and Shareholder Strategy

The IPO will be conducted through an Offer for Sale (OFS), potentially leading to a 10% dilution. Current stakeholders like Walmart, Microsoft and Tiger Global are expected to partially offload their stakes. This listing marks one of the largest-ever in India’s fintech space, attracting strong institutional interest.

Conclusion

With a fresh $600 million from General Atlantic and robust financials, PhonePe stands well-prepared for its upcoming ₹12,000 crore IPO. The investment not only reinforces stakeholder trust but also empowers employees financially as the company transitions to a publicly listed entity.

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