Walmart has led a clutch of existing investors in chipping in with an investment of $700 million in PhonePe , even as it announced a partia...
Walmart has led a clutch of existing investors in chipping in with an investment of $700 million in PhonePe, even as it announced a partial spin-off of digital payments platform from Flipkart.
Flipkart will still remain the PhonePe's majority shareholder and the two companies will "retain their close collaboration."
"Recognising the momentum that has been achieved, as well as PhonePe's significant growth potential, Flipkart's Board determined that this was the right time to partially spin-off PhonePe so it can access dedicated capital to fund its long-term ambitions over the next three to four years," Flipkart said in a statement.
In four years since its founding, PhonePe has crossed the 250 million registered user milestone, with over 100 million monthly active users (MAU) generating nearly one billion digital payment transactions in October 2020.
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PhonePe valued at $5.5 billion
PhonePe, which competes with GooglePay and Paytm, has now raised $700 million in primary capital. The funds are being raised at a post-money valuation of $5.5 billion from the existing investors of Flipkart led by Walmart, Flipkart said in a statement.
"The partial spin-off also provides PhonePe an opportunity to constitute a new Board of Directors focused on supporting its development, and to create a tailor-made equity incentive or ESOP program for its employees," Flipkart said.
PhonePe has over 100 million active users, which helped it log around one billion digital payment transactions in October this year.
Sameer Nigam, Founder and CEO at PhonePe, said, "Flipkart and PhonePe are already among the more prominent Indian digital platforms with over 250M users each. This partial spin-off gives PhonePe access to dedicated long-term capital to pursue our vision of providing financial inclusion to a billion Indians."
Kalyan Krishnamurthy, CEO of Flipkart Group, too noted, "As Flipkart Commerce continues to grow strongly serving the needs of Indian customers, we are excited at the future prospects of the group. This move will help PhonePe maximise its potential as it moves to the next phase of its development, and it will also maximise value creation for Flipkart and our shareholders."
PhonePe has a range of financing services too, including 600,000 insurance policies. PhonePe has been helped a great deal by Flipkart’s festival sale and the growth of fantasy sports app Dream 11.
Source: Flipkart
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