STOCK MARKET BSE NSE

PhonePe suffers two-fold losses in FY19 despite increased ad spending

 In contrast, rival Google Pay posted a net profit of `5.1 crore in FY19 with revenue of `1,119 crore, an increase of 2.5 times compared to the `438.3 crore in FY18.

Published: 31st October 2019 01:41 AM  |   Last Updated: 31st October 2019 08:15 AM   |  A+A-

Express News Service

NEW DELHI: Faced with stiff competition from fintech giants such as Paytm and Google Pay, Walmart-owned digital payment start-up PhonePe has registered more than double its losses in 2018-19 compared to a year ago on account of higher expenses.As per a filing with the Registrar of Companies, PhonePe’s total income grew by 401 per cent to `245.8 crore from `49 crore in FY18 in tandem with its net loss, which increased by 141 per cent from `791 crore in FY18 to `1904.7 crore in FY19. Its net loss stood at 7.77 pcer cent of its total income. 

The losses are rising gradually every year on account of its net losses, which was `129 crore in FY17. Interestingly, PhonePe spent `2,153.2 crore in FY19 in total expenses, up from `840.1 crore (to earn a total income of `245.8 crore). It spent nearly `1,297 crore in ads and promotions, up from `602 crore last year. Operating expenses shot up to `2,129 crore from `831 crore, while depreciation and amortisation amount rose from `2.8 crore to `23.7 crore.

 In contrast, rival Google Pay posted a net profit of `5.1 crore in FY19 with revenue of `1,119 crore, an increase of 2.5 times compared to the `438.3 crore in FY18. Parent One97 Communications said Paytm saw losses increase to `4,217 crore for FY19 on a consolidated basis. Total revenue was `3,579 crore on the back of `7,730 crore in expenses (which almost doubled from `4,864 crore in FY18) for this fiscal.

 With 150 million users, PhonePe is said to be in talks to raise up to a billion dollars in fresh funding to shore up offline presence for capturing a large share of offline payments market. The company said its app drove 380 million transactions in August, with 90 million offline transactions. It  claimed that it was accepted as a payment option across 6.5 million stores in 210 cities.  Meanwhile, Alibaba, SoftBank, Walmart, Google, Amazon, and Facebook are keeping a watch on Indian digital payments opportunity, which is untapped since more than half the population still doesn’t own smartphones. 

Even Amazon Pay feels the pinch 
Like PhonePe, Amazon Pay India — which is rival Amazon’s digital payments unit — has also seen its losses surge. Amazon Pay India saw its loss widen to C1,160.8 crore in FY19 from C334.2 crore in FY18.



Comments

Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the newindianexpress.com editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on newindianexpress.com are those of the comment writers alone. They do not represent the views or opinions of newindianexpress.com or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. newindianexpress.com reserves the right to take any or all comments down at any time.

flipboard facebook twitter whatsapp