Flipkart to partially spin-off Indian digital payment platform PhonePe
Indian e-commerce company Flipkart said that it will carry out a partial spin-off of Indian payment app PhonePe.
Founded nearly four years ago, PhonePe is said to have surpassed 250 million registered users, with more than 100 million monthly active users (MAU) generating almost a billion digital payment transactions in October 2020.
Flipkart said that due to the momentum achieved by PhonePe along with its considerable growth potential, the company’s board concluded that this was the appropriate time for the partial spin-off.
The move would enable PhonePe to access dedicated capital to finance its long-term goals in the coming three to four years, said Flipkart.
Sameer Nigam – Founder and CEO of 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.”
According to the e-commerce company, PhonePe in the financing round is raising $700 million in primary capital at a post-money valuation of $5.5 billion from the former’s existing investors led by US retailing giant Walmart.
Flipkart will continue as majority shareholder of the digital wallet platform and the two businesses will closely collaborate.
Kalyan Krishnamurthy – CEO of Flipkart Group said: “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 maximize its potential as it moves to the next phase of its development, and it will also maximize value creation for Flipkart and our shareholders.”