PhonePe, a leading fintech company backed by General Atlantic, has reported a consolidated net loss of INR 2,795.3 crore for the financial year 2022-23 (FY23), marking a 39% increase from the previous fiscal year’s loss of INR 2,013.7 crore. This rise in net loss is attributed to a significant increase in its Employee Stock Ownership Plan (ESOP) expenses.
In contrast, PhonePe’s operating revenue witnessed a substantial surge of 77%, reaching INR 2,913.7 crore in FY23 from INR 1,646.2 crore in FY22. The company primarily generates revenue through its payments and allied services, recording INR 2,707.1 crore from this stream in FY23 compared to INR 1,301.4 crore in the previous fiscal year.
Founded in December 2015 by Sameer Nigam, Rahul Chari, and Burzin Engineer, PhonePe offers various financial services, including digital payments, mutual funds, and insurance products. The company attributed its revenue growth in FY23 to the increased adoption of its services for money transfers, mobile recharges, and bill payments.
Additionally, PhonePe credited the launch and expansion of new products and businesses, such as smart speakers, rent payments, and insurance distribution, for driving its revenue growth. The company reported a deployment of 4.1 million smart speakers as of August 31, 2023.
In the UPI transactions category, PhonePe holds a market share of 50.54% as of March 2023, competing with rivals like Paytm, Google Pay, and CRED.
Including other income sources, PhonePe’s consolidated total income surged over 80% to INR 3,084.6 crore in FY23 from INR 1,692.7 crore in the previous fiscal year.
However, the company’s total expenses escalated by 59% to INR 5,886.3 crore in FY23, with employee costs being the major component. PhonePe’s spending on employees reached INR 3,096 crore, accounting for a significant portion of its total expenses. ESOP expenses also witnessed a substantial increase of 73% to INR 2,057 crore in FY23.
Despite its widening losses, PhonePe has been on an expansion spree, launching new offerings such as separate apps for ecommerce (Pincode) and investment tech (Share.Market), along with its own app store, Indus Appstore. Additionally, the company recently introduced a new feature on its platform, allowing users to manage credit cards and pay bills and loans.
PhonePe’s financial performance reflects the dynamic nature of India’s fintech landscape, where companies are balancing rapid expansion with the need for sustained financial viability.
