E-commerce major Flipkart today announced a “partial spin-off” of PhonePe as the digital payment firm raises USD 700 million in funding – valuing it at USD 5.5 billion.
A statement said, Flipkart will remain PhonePe’s majority shareholder, and the two businesses will retain their close collaboration. It added, “Recognizing 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.”
PhonePe founder and CEO Sameer Nigam said, “Flipkart and PhonePe are already among the more prominent Indian digital platforms with over 250 million 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.” PhonePe was founded by ex-Flipkart executives Nigam, Rahul Chari, Burzin Engineer, and was acquired by Flipkart in 2016. In 2018, Flipkart was acquired by Walmart, and PhonePe was part of the transaction as well.