General Atlantic has invested USD 600 million into PhonePe, doubling its stake in the company from 4.4% to 9%, according to the press release.
The funding aims to support PhonePe employees in fulfilling their tax obligations, which rose from exercising their Employee Stock Options (ESOPs) ahead of the company’s IPO. As part of the initiative, no founders or existing investors have offloaded their shares.
Funding ahead of IPO
With the funds, the US-based private equity firm invested a total of USD 1.15 billion in PhonePe since 2023, reflecting its support for the company’s growth. The move comes as the digital payments and financial services company prepares for its IPO, with the company projected to file its DRHP by the end of 2025.
According to Moneycontrol, the fintech filed papers with Sebi, a market regulator, confidentially, targeting a USD 1.35 billion IPO through an offer for sale. Walmart, Tiger Global, and Microsoft are among the shareholders likely to sell part of their holdings in the offering, which could result in a 10% dilution.
The talks about PhonePe’s IPO plans started back in June, when the fintech wanted to raise USD 1.5 billion through the listing, which could have valued the company at around USD 15 billion. The planned offering followed a funding round in 2023 in which PhonePe secured USD 100 million from investors including Ribbit Capital, Tiger Global Management, and TVS Capital Funds. That round placed the company’s valuation at approximately USD 12 billion at the time.
The company’s financial performance also strengthened ahead of its IPO, with it posting a 40% YoY increase in revenue in FY25, powered by its expansion beyond payments. The investment from General Atlantic reflects its commitment to backing the local consumer internet company and its confidence in its growth.
