PC: VCCircle
PhonePe, which is a digital payments platform, continued to gain great deals of limelight by the fiscal year end of March 2024. Almost a billion dollars in funding from prominent investors like General Atlantic, Walmart, and Tiger Global during 2023 paved the way for great performance throughout the fiscal year for PhonePe.
According to the consolidated annual report by PhonePe, the platform witnessed significant revenue growth from operations at Rs 5,064 crore – an incredible 73.8% above last fiscal year. The main revenue is the income gained from payment services, supplemented by interest income of Rs 661 crore generated from deposits and investments that followed after the funding round of $195 million. This outstanding performance of the company led to PhonePe’s total revenue touching the height of Rs 5,725 crore in FY24, which clearly reflects the strong financial position and market presence of the company.
Employee benefits were 46.45% of the total in operational expenses, showing Rs 3,603 crore in FY24. The ESOP expense was at Rs 1,876 crore, where settlement was highly in non-cash transactions and indicates the strategic use of this mechanism to reward and retain talent within the organization.
This trend was also evident in its payment processing fees, which saw an ascending 74.8% to Rs 1,166 crore in FY24. In tandem, other overheads such as advertisement, information technology, licenses, legal and others led the increase in total costs by 31.3%, translating to Rs 7,756 crore during the fiscal.
Despite the cost rise, the financials of PhonePe were well sustained by the company that had reduced the net losses by 28.6% to Rs 1,996 crore, helping shift from Rs 2,795 crore the previous fiscal. It has been achieved by constrained costs and surprisingly 74% scale growth wherein the scale has grown phenomenally while simultaneously having the operational efficiency to manoeuvre it.
Having a valuation of $12 billion, PhonePe is the most valuable privately-owned fintech company in India, claiming leadership of the UPI-based app with nearly 50 percent share both in terms of volume and value of transactions. Another strategic move the company has made in Singapore to domicile in India enshrines its commitment to the local market, exemplifying the exercise of compliance and contribution to the economy at large.
The financial performance of PhonePe for the fiscal year 2024 demonstrates solidity, strategic investment, and operational focus. Through this, it presents an opportunity for sustained growth and innovation in such a competitive digital payments landscape. With continued expansion and market consolidation into different segments, the platform remains an indispensable driver in the financial inclusion and onset of digital transformation in India’s growing fintech ecosystem.
