Bengaluru: Walmart-owned digital payment startup PhonePe’s losses have gone up by more than 2X to around ₹1907.4 crore during the financial year ended March 2019 (FY19) on account of higher expenses, according to its latest filings with the registrar of companies (RoC). PhonePe’s losses increased from around ₹791 crore reported in the previous financial year (FY18).
The startup’s losses have been rising gradually every year with a 6X increase in losses reported in FY18, and a mammoth 31X rise in losses reported in FY17.
PhonePe, which was recently valued at $7 billion by Morgan Stanley in September, grew its total revenue by 5X to around ₹245.8 crore during FY19, compared to ₹49 crore revenues reported in the previous financial year. The revenue growth in FY19 was slightly higher compared to a 3X growth in revenues reported in FY18.
The Bengaluru-based startup which competes with other products such as Google Pay, Paytm, BharatPe, and others also reported a 3X rise in expenses during FY19. PhonePe’s total expensed stood at ₹2153.2 crore in FY19, compared to expenses of ₹840.1 crore reported in FY18.
PhonePe’s expenses have been rising steadily in the competitive payments segment, which is also seeing reports of consolidation. Expenses increased by around 6X in FY18, and by around 30X in FY17.
Earlier this month, the Economic Times reported that MobiKwik had explored a merger with Naspers-backed PayU, although MobiKwik had denied being in any talks. PhonePe’s competitor Google Pay, however, said that it was profitable during FY19 with a net profit of ₹5.1 crore, along with revenues of ₹1,119 crore, which increased from around ₹438.3 crore in FY18.
During FY19, PhonePe’s employee benefit expenses stood at ₹531.1 crore, which increased by more than 300% year-on-year from around ₹130.1 crore in employee-related expenses reported in FY18. The startup’s ‘other expenses’ category also reported a 125% year-on-year increase to around ₹1511.9 crore in FY19.
According to recent media reports, Walmart had initiated plans to demerge PhonePe from Flipkart, which was acquired by Walmart in one of the biggest e-commerce deals in 2018. PhonePe is also reportedly in talks to raise up to a billion dollars in fresh funding.
PhonePe currently claims to have over 150 million users. It allows users to send and receive money, recharge mobile, DTH accounts, data cards, make utility payments and buy gold online as well. In August this year, PhonePe had reported an annual total payment value (TPV) run rate of $95 billion, while claiming to clock around 335 million transactions in July. It also received a fund infusion of about ₹698 crore from PhonePe Pvt Ltd, Singapore (formerly Flipkart Payments) in July 2019.