PhonePe’s FY21 Losses Decline Marginally, Operating Revenue Up 86%

PhonePe saw its losses shrink by 2.5 percent to Rs 1,727.8 crores in FY21, thanks to a significant increase in operating revenues

PhonePe, the Flipkart-backed digital payments startup, saw its losses shrink by 2.5 percent to Rs 1,727.8 crores in FY21, thanks to a significant increase in operating revenues. According to its most recent filings with the Ministry of Corporate Affairs, the company lost Rs 1,771.5 crores in FY20.

PhonePe logo seen in the background of a silhouetted woman holding a mobile phone
Image Source: Getty Images

In FY21, PhonePe's operating revenue increased by nearly 86 percent to Rs 690 crores. While the startup's revenue from payments and services related was Rs 371.8 crores in the previous fiscal year, it increased to Rs 686 crores in FY21.

Despite higher expenses, PhonePe's bottom line improved. Its overall expense was Rs 2,456 crores in FY21, up from Rs 2,202.7 crores the previous year. Employee benefit expenses for the company increased by 157percent to Rs 1,235 crores in FY21. Depreciation, depletion, and amortisation costs also went up, from Rs 87 crores in FY20 to Rs 133.5 crores in the year. PhonePe, on the other hand, might reduce its other expenses, such as payment processing charges as well as marketing, to Rs 1,085.5 crores in FY21, down from Rs 1,634.5 crores in the previous fiscal year. 

PhonePe was founded in 2015 and was acquired by Flipkart in 2016. Later that year, after Walmart acquired Flipkart Group, it became a part of Walmart. As the real-time payment system, Unified Payments Interface (UPI), made a record in May this year, crossing the Rs 10 lakh crores threshold with approximately 6 billion transactions in the month, PhonePe also set a record with transactions totalling Rs 5.11 lakh crore. In May, PhonePe alone had a 49 percent market share in the overall volume of UPI transactions by the app.

The recent months saw PhonePe continue its acquisition binge. For a total of $75 million in May, it acquired the two wealth management startups OpenQ and WealthDesk. GigIndia was acquired by the startup earlier this month for an undisclosed amount. GigIndia is a B2B marketplace for freelancing micro-entrepreneurs to handle on-demand work. PhonePe's acquisition of Indus OS, on the other hand, progressed in April after the Singapore High Court dismissed appeals brought by marketing tech platform Affle that opposed the deal.

There have recently been rumours that PhonePe is preparing for an IPO once it turns a profit, which it anticipates doing in 2023. However, the fintech startup's founder and CEO later denied the report in a Tweet, saying, “I had no idea my own company is filing an IPO.”