Walmart-owned digital payments app Phonepe on Thursday said it has raised USD 350 million at a valuation of USD 12 billion in a funding round led by private equity firm General Atlantic.

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"Marquee Global and Indian investors are also participating in the round," PhonePe said in a statement adding the investment marks the first tranche of an up to USD 1 billion total fundraise that commenced in January 2023.

The fundraise follows PhonePe's recently announced change of domicile to India and full separation from Flipkart.

PhonePe, in which the US retailer Walmart Inc took ownership in 2018, plans to deploy the new funds to "make significant investments in infrastructure, including the development of data centers and help build financial services offerings at scale in the country."

The company also plans to invest in new businesses, including insurance, wealth management, and lending.

"The fundraise is expected to support PhonePe as it seeks to turbo-charge the next wave of growth for UPI payments in India, including UPI lite and Credit on UPI," the statement said.

Founded in December 2015, PhonePe has over 400 million registered users and over 35 million merchants spread across Tier 2, 3, and 4 cities and beyond.

PhonePe is an Indian company, built by Indians, and the latest fundraise will help in investing in new business verticals like insurance, wealth management and lending, while also facilitating the next wave of growth for UPI payments in India, said Sameer Nigam, founder and CEO at PhonePe.

"Sameer, Rahul and the PhonePe management team have pursued a clear mission to drive payments digitalization and significantly broaden access to financial tools for the people of India. They remain focused on driving adoption of inclusive products developed on the open API based 'India stack'.

"This vision is aligned with General Atlantic's longstanding commitment to backing high-growth businesses focused on inclusion and empowerment," said Shantanu Rastogi, Managing Director and Head of India at General Atlantic.

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