April 23, 2024

Investments & Exits

PhonePe Investing $200 Mn In Building Data Centres In India: CTO Rahul Chari

The company, PhonePe, is investing $200 million in Indian data centres. Specifically, they plan to spend $150 million to build four centres in Bengaluru and Navi Mumbai, increasing their capacity to over 14 megawatts. This investment shows their commitment to the growth and development of the industry in India.

The government’s regulatory requirement for data localisation has motivated investments from PhonePe, a digital payments platform that currently processes 120 million transactions daily, with a peak of 7,000 transactions per second, and aims to reach 500 million in the coming year.

In response to increased regulations and growth in payments, fintech company PhonePe is investing up to $200 million in setting up data centres across the country. Co-founder and CTO Rahul Chari stated that these investments are necessary for compliance with local storage requirements. This expansion demonstrates the company’s commitment to keeping up with the rapidly evolving landscape of digital payments.

The startup has already deployed $150 million out of its $200 million budget to build data centres, with plans to use the remaining funds for more facilities in the future.

In September, 678 Crore UPI transactions worth 11 trillion rupees were processed, with PhonePe leading the way with 47.4% of transactions and nearly 50% of the transaction value. In addition, a new data centre with 4.8 MW of power and 1,3740 sq. ft. of space was opened in Mahape, Navi Mumbai, utilising smart cooling technology. The data centre was jointly founded by PhonePe, NTT, and Dell Technologies.

In recent years, there has been an increase in the number of data centres built in India. This is due to the growing demand for computing power and the increasing use of cloud services. Major industry players, such as the Adani Group and Hiranandani Group, have also entered the profitable data centre market.


A market study states that India currently has 138 data centres spread over 11 million square feet, with a capacity of 737 Megawatts.

Mumbai and Chennai house the majority of these centres. By 2025, the number of data centres is expected to increase upto 183, along with a 1,752 MW increase in capacity and 24 million square footage.

After the pandemic, demand for digital services has primarily come from individuals. However, government regulations have also played a role in boosting the industry. Specifically, the RBI has instituted several measures requiring payment processing companies to store customer data on servers located within India.

The Indian data centre market has seen significant growth in recent years, with revenue reaching $7.3 billion by 2021 and projected to reach $9.27 billion by 2027. This growth can be attributed to the increasing demand for local data centres to handle digital payments and avoid losing access to one of the largest digital payment markets.

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