Walmart-owned digital payments platform PhonePe reported a 74% rise in yearly revenues, at a time when India was on the brink of imposing successive Covid-19 lockdowns.
The Bengaluru-based company said its total revenue rose to Rs 427.21 crore in the financial year ended March 2020, from Rs 245.8 crore a year earlier.
Its total loss narrowed 7% to Rs 1,772.93 crore, year-on-year.
“Management expects a quantum shift in customers' behaviour towards digital payments due to Covid-19 as people would reduce cash transactions due to social distancing norms. There has been no material impact on the operations of the group as the digital payments are completely automated,” the company said, in its FY20 report to the Ministry of Corporate Affairs.
The business unit’s total expenses were up 2% to Rs 2,202.91 crore. However, two major cost heads, employee benefit and advertising promotional expenditure, were chopped.
Advertising and promotional charges, which accounted for the company’s largest expenditure, dropped 22% to Rs 1,016,64 crore. Employee costs were cut 10% to Rs 478.92 crore.
The holding company PhonePe, which was formerly known as Flipkart Payments, is owned and funded by retail giant Walmart. It operates a digital payment system for semi-closed prepaid instruments services in India.
In December 2020, it was partially hived off as a separate entity to help the firm expand its presence in the MSME market. It was set to raise $700 million in equity capital at a post-money valuation of $5.5 billion.
The company generates revenues through the sale of its services, payment intermediary services, and from processing of payment transactions. Other sources of revenue include sales of advertising services.
Founded in 2015 by former Flipkart employees Sameer Nigam and Rahul Chari, PhonePe was acquired by Flipkart in 2016. The company, which started as a digital wallet, now commands close to 40% market share in UPI based transactions, making it among the top two players in the country.
The company handled about 1 billion transactions for the month of October 2020 and has close to 100 million monthly active users (MAU), as per a statement in December 2020.