Key Points
- PhonePe made over INR 5,000 crore in revenue for FY24.
- It runs six subsidiaries under a unified leadership style.
- Its products include insurance, loans, stock trading, and an app store.
- PhonePe’s governance is similar to that of public companies.
- The company uses a startup-within-a-startup model for its products.
Looma News
PhonePe, a startup backed by Walmart, has changed from a UPI app into a tech giant with significant revenue. In FY24, it reported over INR 5,000 crore, making it the second startup in India to achieve this financial success after Paytm. The company is making big changes, aligning its corporate governance with the standards of publicly listed companies, as mentioned in its latest annual report.
Once a leader in UPI payments, PhonePe has broadened its range of products. It now uses its 500 million users to offer various financial services. PhonePe Insurance started in early 2020, and in 2021, it got a license for distribution. In 2023, it entered the consumer lending market after initially focusing on loans for merchants.
Expanding Product Portfolio
Along with financial services, PhonePe launched Share.Market last year to enter the stock trading field and the Indus Appstore to compete with Google’s App Store. It also created Pincode, an e-commerce platform that connects shoppers with local stores, utilizing the ONDC network. These steps are designed to diversify revenue sources and reduce risks tied to market limitations expected in the UPI sector.
Leadership Structure
PhonePe uses a distinct leadership style, featuring a flat core team of 12, including its three co-founders. This team manages the entire PhonePe Group and its six subsidiaries. A spokesperson noted that this flat structure encourages learning across different businesses and effective governance. As PhonePe expanded, it hired specialized heads for each product line, boosting focus and expertise.
The core leadership team has an average tenure of 6.7 years, indicating stability during major corporate changes. Key executives have taken on leadership roles for new product lines, ensuring each division operates independently while aligning with the company’s overall goals.
Future Prospects
PhonePe’s clear communication in its annual report shows that it understands its market position well. This focus on individual business units signals a strategic approach as the company prepares for future challenges and growth, including the potential for an IPO down the line.
