Digital payments firm PhonePe is reportedly in talks to generate fresh capital. The firm may raise it from US-based private equity group General Atlantic at a valuation of $12 billion in a funding round, Reuters reported.
PhonePe chose to remain silent about this deal, while General Atlantic too did not provide an early response to Reuters.
The US private equity organisation may lead the round with an investment of $450-500 million, financial news website Moneycontrol told in a report.
This capital infusion could make PhonePay the most valuable financial tech firm in India, surpassing other fintech companies like Razorpay and One97 Communications-backed Paytm. The financial services platform saw a 138 percent jump in revenues in FY22 to Rs 1,646 crore as compared to the previous fiscal.
The deal between PhonePe and General Atlantic comes at a time when Indian start-ups are witnessing funding winter. This has even compelled a few to moving towards from equity to debt capital.
Start-ups are also dealing with getting the right valuation. To combat this crisis, they are looking to secure a tangible asset, includin company bonds.
Economic experts think that debt funding can be helpful in the short to medium term. Also, through debt capital, a firm does not need to sell its equities to any other enterprises or entrepreneurs.
If PhonePe succeeds in bagging this investment in the midst of a funding cooldown, it would be a ray of hope for other Indian start-ups, hoping to raise funds with improved valuation.