Exclusive: Walmart-backed PhonePe targets up to $10.5 billion valuation in India IPO, sources say

Core Viewpoint - PhonePe, backed by Walmart, is targeting a valuation of $9 billion to $10.5 billion for its upcoming IPO in India, aiming to raise between $900 million and $1.05 billion, despite a previous valuation of $12 billion in 2023 [1][1]. Company Overview - PhonePe is the most used payments platform in India, processing nearly half of the Unified Payments Interface (UPI) transactions, with 10 billion out of 21.7 billion transactions in January [1][1]. - The company has over 650 million registered users, but faces challenges in monetizing its user base due to the low-margin nature of the payments business in India [1][1]. Financial Performance - PhonePe's losses increased to 14.44 billion rupees ($158 million) for the six months ending September 30, compared to 12.03 billion rupees a year ago, while revenue grew by approximately 22% to 39.18 billion rupees [1][1]. Market Context - The Indian fintech market is perceived as overcrowded, with limited differentiation among competitors, which raises concerns about PhonePe's ability to achieve its targeted valuation [1][1]. - The excitement around the fintech sector in India has cooled, leading to skepticism regarding PhonePe's monetization strategy and user growth [1][1].