According to reports, Walmart-owned PhonePe has invested more than Rs 800 crore in its subsidiaries over the past year in order to expand a variety of industries, including wealth management, insurance broking, and hyperlocal e-commerce.

PhonePe Insurance Broking Services received more than half of this, or Rs 426 crore, which is indicative of the payment company's goal to become a sizable retail cover distribution business.

Since obtaining a license, PhonePe has invested over Rs 1,000 crore in equity in its insurance division, per data obtained from the Registrar of Companies.

Although PhonePe is clearly quite positive on insurance based on the size of its investment, the products it is selling are not particularly lucrative.

The digital payments company also made a Rs 287 crore investment in PhonePe Wealth Broking, a subsidiary, last year.

It invested Rs 90 crore in Pincode Shopping Solutions in two installments, one in July 2023 and again earlier this month. With support from Open Network for Digital Commerce (ONDC), this division oversees the e-commerce app Pincode.

For the longest time, PhonePe has made insurance a strategic gamble, while competitors like its closest rival Paytm were pursuing expansion mostly through consumer lending.

According to reports, while PhonePe Insurance is experiencing an increase in sales volume from its portfolio of two-wheeler covers and micro-insurance products, this does not translate into a significant increase in revenues because each product has a very little fee. For PhonePe Insurance to develop robust revenue streams, it must offer more life and health products.

PhonePe Insurance Broking recorded operating revenue of Rs 28 crore for the fiscal year ended March 2023, with a net loss of Rs 427 crore, according to regulatory documents obtained from Tofler. The company spent Rs 317 crore on advertising and promotions, which accounted for the majority of its expenses.