PhonePe is raising USD $700 mn; firm valued at USD $5.5 bn

By Edil Corneille

Flipkart, India’s homegrown e-commerce marketplace, announced a partial spin-off of PhonePe, the digital payments platform in the country. Registered users of the platform can send and receive money, recharge their mobiles, DTH, data cards, pay at stores, make utility payments, buy gold and make investments.

Withing four years since its founding, PhonePe crossed the 250 million registered user milestone, with over 100 million monthly active users (MAU) generating nearly a billion digital payment transactions in October 2020.

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 that it can access dedicated capital to fund its long-term ambitions over the next three to four years.

The partial spin-off also provides the firm with 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.

In this financing round, the digital payments platform is raising USD $700 million in primary capital at a post-money valuation of USD $5.5 billion from existing Flipkart investors led by Walmart.

Flipkart will remain PhonePe’s majority shareholder, and the two businesses will retain their close collaboration.

Speaking on the development, 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.”