Flipkart currently owns about 87% of PhonePe after its partial spin-off
PhonePe recorded 868.4 Mn transactions with a value of INR 1.75 Lakh Cr in November
It aims to be published by 2023 in the US or India, looking at an estimate of $ 7 to $ 10 billion
Digital payment platform PhonePe has raised INR 150 Kr (about $ 21 Mn) in funding from majority shareholder and e-commerce giant Flipkart
According to Ministry of Corporate Affairs records accessed by Mint, PhonePe has allocated 198,755 shares to Flipkart’s Singapore holding. With this round, Flipkart owns about 87% of the payment company and continues to be a majority investor in the payment entity.
The development comes shortly after PhonePe obtained $ 700mn funding from Walmart at a post-monetary valuation of $ 5.5bn. The company also said it will partly leave Flipkart Group and set up an independent board of directors. Flipkart said the partial by-product will help PhonePe access dedicated capital to fund its long-term ambitions over the next three to four years.
Like its parent company Flipkart, PhonePe is also working aggressively to launch by 2023 as a separate entity in the US or India, looking at an estimate of $ 7 to $ 10 Billion. Last week, the head of Walmart, owner of Flipkart, Walg, Doug McMillon, reiterated the company’s commitment to see Flipkart as well as PhonePe choose an IPO.
This year PhonePe launched six products on insurance and wealth management. It claims to have become the fastest growing digital insurance distributor in India.
“As Flipkart business continues to grow strongly serving the needs of Indian customers, we are excited about the group’s future prospects. 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, ”said Kalyan Krishnamurthy, CEO of Flipkart Group.
PhonePe was founded in 2015 by Burzin Engineer, Rahul Chari and Sameer Nigam. It was acquired by Flipkart in April 2016, just five months after the payments company. The company now claims to have more than 250 Mn registered users with more than 100 Mn monthly active users, generating nearly 1 Bn transaction in October.
The company is currently leading the UPI (unified payment interface) market along with Google Pay. The duo cumulatively owns more than 80% of the market share. In November, Google Pay recorded about 960 Mn transactions worth INR 1.61 Lakh Cr, while PhonePe recorded 868.4 Mn transactions worth INR 1.75 Lakh Cr. In October, Google counted 857.81 Mn transactions, while PhonePe ranked second with 839.88 Mn transactions.
Like its parent company Flipkart, PhonePe is also working aggressively to make it public by 2023 as a separate entity in the US or India, looking at a valuation of $ 7 to $ 10 Billion. The company aimed to diversify its portfolio following the rule of the government zero MDR (commercial discount rate), which leaves very little revenue potential only in UPI.