PhonePe gets $50 million from Tencent but won't use it in India

New Delhi: The Singapore unit of PhonePe has raised $66.5 million (about Rs 500 crore) in a funding round led by Chinese tech company Tencent Holdings Ltd. along with participation of New York-based investor Tiger Global.

Tencent has infused $50 million while Tiger Global has pitched in the rest.

The funds raised from the Chinese technology company will not be brought into India due to restrictions imposed on foreign investment from countries that share a land border with India, a source aware of the development at PhonePe said.


The digital payments company — part of the Flipkart Group — is raising $700 million in primary capital at a post-money valuation of $5.5 billion from existing Flipkart investors led by Walmart. The announcement was made by Flipkart in December 2020.

PhonePe plans to use the fund to support business transactions in Singapore which includes acquiring stake in companies registered there. The company is in talks to acquire a stake in Indus OS which operates in India but is incorporated in Singapore.

Press Note 3
According to sources, shares of PhonePe’s Singapore unit were allocated to Tencent before the issuance of Press Note 3 in April 2020, but the investment has come only now. The firm will approach authorities concerned whenever required in compliance with norms in India.

Another source aware of the foreign investment proposals said there is no submission from PhonePe for clearance of Tencent investments in the company.

Flipkart continues to be the largest stakeholder in PhonePe with 87.30% stake, followed by Walmart. Tencent has less than 2% stake.