In a significant show of confidence ahead of PhonePe’s highly anticipated public listing, US-based private equity giant General Atlantic (GA) has invested USD 600 million (~INR 5,320 crore) in the Walmart-owned fintech major through a secondary transaction, doubling its stake from 4.4% to around 9%.
This latest investment marks one of the largest secondary deals in India’s startup ecosystem this year. The transaction underscores GA’s deepening conviction in PhonePe’s long-term growth potential and cements the fintech’s position as India’s most valuable financial technology company.
Employee-Focused Secondary Transaction
Unlike a primary capital infusion, the USD 600 million (~INR 5,320 crore) deal was largely secondary in nature, designed to help PhonePe employees exercise their stock options (ESOPs) and meet tax obligations arising from those exercises. Importantly, no founders or existing investors offloaded their stakes as part of the transaction — a signal of continued faith in the company’s growth trajectory ahead of its IPO.
This follows PhonePe’s reported INR 700–800 crore ESOP buyback program, initiated earlier this year to reward over 1,000 employees, as the company transitioned into a public entity in May 2025.
A Billion-Dollar Relationship
General Atlantic’s relationship with PhonePe dates back to 2023, when it began a steady investment spree that now totals USD 1.15 billion (~INR 10,200 crore). The PE firm first led a USD 350 million (~INR 3,104 crore) primary round in early 2023, followed by additional tranches of USD 100 million (~INR 886 crore) each in April and May of that year, part of a larger USD 850 million fundraising round that valued PhonePe at USD 12.5 billion (~INR 1.10 lakh crore).
General Atlantic investment in PhonePe, valuing the company at around USD 14.5 billion (~INR 1.29 lakh crore), represents a 16% premium to that 2023 round — making it GA’s largest single-company bet in India, surpassing even its USD 870 million investment in Reliance Jio Platforms in 2020.
PhonePe IPO Preparations in Full Swing
PhonePe has confidentially filed its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) and is expected to go public in 2025, raising INR 12,000 crore through a pure offer-for-sale (OFS). Major shareholders — including Walmart, Microsoft, and Tiger Global — are likely to partially divest in the listing, which could result in a 10% equity dilution.
The company’s move follows a broader trend among Indian fintechs seeking to list domestically, even as regulatory tightening has increased scrutiny on lending and digital payment platforms.
Financial Performance and Market Dominance
PhonePe has showcased strong financial momentum ahead of its listing. For FY25, the company reported:
- Revenue: INR 7,114.8 crore, up 40% year-on-year from INR 5,064 crore in FY24.
- Net Loss: Narrowed to INR 1,727 crore, from INR 1,996 crore in FY24.
- Adjusted Profit (excluding ESOP costs): INR 630 crore.
- Adjusted EBITDA: INR 1,477 crore.
- Free Cash Flow: Positive at INR 1,202 crore.
- Cash Reserves: Over INR 6,000 crore.
According to data from the National Payments Corporation of India (NPCI), PhonePe processed 8.9 billion UPI transactions in September 2025, capturing over 45% market share by volume — far ahead of competitors like Google Pay and Paytm.
Strategic Evolution Beyond Payments
While PhonePe remains the undisputed leader in UPI-based digital payments, it has spent recent years diversifying into full-stack financial services, including:
- Credit and lending (through partner NBFCs)
- Insurance broking (particularly motor insurance)
- Wealth management and stockbroking
- App distribution via Indus Appstore
- Hyperlocal commerce through Pincode
The fintech reportedly invested over INR 800 crore in FY24 to build these verticals, each of which now operates as an independent subsidiary with dedicated leadership.
Despite fierce competition from Paytm, MobiKwik, and new entrants like Flipkart’s Super.Money, analysts believe PhonePe’s ecosystem integration, user trust, and operational discipline provide a distinct competitive moat.
Conclusion
General Atlantic investment in PhonePe reaffirms its long-term bet on India’s digital financial infrastructure. For PhonePe, the investment strengthens its balance sheet, supports employee wealth creation, and underscores investor faith ahead of what is likely to be one of India’s most-watched IPOs of 2025.
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