BENGALURU - Digital payments among India's 1.4 billion people is seen as a multi-billion-dollar opportunity. One of its proponents, PhonePe itself became valued at $12 billion with new funding of $100 million, according to the company. Investors include Ribbit Capital, Tiger Global, and TVS Capital Funds.

The recent funding quickly followed a $350 million primary raise in January. Walmart has had a majority stake in PhonePe since 2018.

Payments and insurance will be joined by lending, stock brokerage services, shopping, and account aggregation “over the next few years,” according to PhonePe. Prior to the recent fundraising, the company had moved its headquarters from Singapore to India, presumably to be able to obviate regulatory obstacles in lending and other businesses lines in which it has or plans to have a stake.

A Complex Nation with Difficult Challenges
India's size and complexity defies quick analysis. It is the world's third-largest emitter of CO2 and other greenhouse gases, trailing only China and the US. Its economy is the fifth-largest in the world, according to IMF figures. Yet its economic efficiency producing emissions is 20-25% that of the US, and its renewable grid remains at less than 20% of its overall grid, even as it delivers 17% of power per capita as the EU average.

India's low income level keeps it entrenched as a Frontier Market, the fourth of five income tiers under purview by IDCA Research. Its S&P bond rating of BBB- is in the 10th of 22 ratings levels. Despite a couple of decades of focus on developing a robust IT services industry, its in-country server density trails most developed nations by a magnitude or more; its total number of servers is comparable to developing nations Indonesia and Brazil, each with about 15% of India's population.

Modernization efforts continue as these significant challenges remain. Digital payments are seen as a way to keep stimulating economic growth, while reducing the time and carbon footprints necessary to process transactions in a nation that generates more than $11 trillion annually in purchasing-power parity (PPP) terms.

Photograph of Bengaluru.