Led by growth equity firm General Atlantic, the fundraising also saw the participation of Marquee Global and various Indian investors.
The investment represents the first batch of up to $1bn fundraise started by PhonePe this month.
The second round of investment, which is anticipated to complete next month, will be joined by a host of global and Indian investors, noted PhonePe.
It is expected to help the company to develop its infrastructure, such as building data centres and support the development of digital financial services in the country.
Besides, PhonePe intends to use the new funding to expand its business, including Insurance as well as wealth management and lending.
The company further aims to promote the growth of Unified Payments Interface (UPI) in India, involving UPI lite and Credit on UPI.
PhonePe founder and CEO Sameer Nigam said: “PhonePe is proud to help lead India’s country-wide digitisation efforts and believes that this powerful public-private collaboration has made the Indian digital ecosystem a global exemplar.
“We are an Indian company, built by Indians, and our latest fundraise will help us further accelerate the Government of India’s vision of digital financial inclusion for all.
“We look forward to delivering the next phase of our growth by investing in new business verticals like Insurance, Wealth Management and Lending, while also facilitating the next wave of growth for UPI payments in India.”
Established in December 2015, PhonePe is currently said to have more than 400 million registered users.