Phonepe plans Rs 500 crore marketing push

Bengaluru, Mar 21: Flipkart-backed payments company Phonepe is embarking on what is its largest marketing overdrive with Rs 500 crore of investment lined up. It is banking on the mix of cricket and Bollywood, even as it is exploring an independent capital raise.
PhonePe, which now is planning to rapidly scale up and become a mass-market payments platform, will be one of the broadcast co-sponsors of cricketing blitzkrieg Indian Premier League (IPL)- for which it has spent over Rs 100 crore.
This comes at a time when it recently doubled its merchant base to over 2 million with a focus to on-board new users across urban and non-metro markets, going deeper in the smaller towns. The marketing overdrive is aimed to boost its key metrics like monthly volume of transactions, monthly active transacting users and its total user base- about 150 million at present. If successful, this could help the three-year old company to have a real go at overtaking market leader Paytm, which is backed by the likes of Alibaba and SoftBank.
“Products like UPI and PhonePe in that ecosystem is well established and we are seeing large volume of transactions. So, now it’s important for us to go out and educate the next 400-500 million users and get the tier-II and tier-III new-to-internet users to transact digitally,” said Sameer Nigam, co-founder and CEO, PhonePe, while declining to comment on the capital raise. The sponsorship deal for IPL is for 2019 only, for now.
PhonePe, which so far has exhausted about half of Flipkart’s total capital commitment of $500 million, has about 30 million active transacting users every month while active users would be more than 50 million. In February, it clocked 225 million transactions. For PhonePe, the expansion of its merchant network has been staggering as it started 2018 with just over 20,000 merchants.
By the end of March, PhonePe’s estimates suggest it would have a merchant base of 3 million across 70 cities. Nigam said the idea is to be available across organised and unorganised merchant networks which can absorb the new volume of users. “We are looking to double the monthly transacting users to 60 million from 30 million by end of the year,” he said by adding that volume of transactions and other key metrics should double as well.