Despite experiencing a 39% increase in net losses in the financial year 2022-23, fintech company PhonePe has witnessed significant growth in its operational revenues.
PhonePe attributes the growth in revenues to the increased popularity of its services in money transfers, mobile top-ups, and bill payments. In addition to revenue growth, PhonePe is expanding its product offerings and recently launched separate applications for the e-commerce industry, investment technology, and its own app store. The financial results of the company reflect the dynamic nature of the fintech sector in India, where companies strive to balance rapid growth with sustainable financial profitability.
PhonePe, a leading fintech company supported by General Atlantic, has released its consolidated financial statement for the fiscal year 2022-23 (FY23), revealing an increased net loss of INR 2,795.3 crore. This represents a 39% increase compared to the previous fiscal year’s net losses of INR 2,013.7 crore. The increase in net losses can be attributed to higher expenses related to the company’s Employee Stock Ownership Plan (ESOP).
Despite the rise in losses, PhonePe’s operational revenues have experienced a significant increase of 77%. The revenue reached INR 2,913.7 crore in FY23, compared to INR 1,646.2 crore in FY22. The company primarily generates revenue through its payment services and related offerings, which brought in a revenue of INR 2,707.1 crore in FY23, a significant increase from the INR 1,301.4 crore achieved in the previous financial year.
The growth in revenues is attributed to the increased popularity of PhonePe’s services in money transfers, mobile top-ups, and bill payments. Additionally, the company credits the revenue growth to the implementation and expansion of new products and activities such as smart speakers, rental fees for properties, and insurance distribution. It is worth noting that, according to the report, PhonePe introduced 4.1 million smart speakers to the market by the end of August 2023.
In the UPI transaction category, PhonePe holds a market share of 50.54% as of the end of March 2023, competing with rivals such as Paytm, Google Pay, and CRED.
While PhonePe’s total revenue increased by over 80% to INR 3,084.6 crore, the company’s total expenses rose by 59% to INR 5,886.3 crore in FY23. Employee costs account for a significant portion of the expenses, with employee-related expenses totaling INR 3,096 crore. ESOP-related expenses also significantly increased by 73% to INR 2,057 crore in FY23.
Despite deepening losses, PhonePe continues to expand its offerings and recently introduced separate applications for the e-commerce industry (Pincode) and investment technology (Share.Market). The company has also launched its own app store called Indus Appstore. Additionally, it has introduced a new feature on its platform that allows users to manage credit cards and pay bills and loans.
The financial results of PhonePe reflect the dynamic nature of the fintech sector in India, where companies strive to balance rapid growth with sustainable financial profitability.
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The source of the article is from the blog maltemoney.com.br