Bengaluru – December 3, 2020: Flipkart, India’s homegrown e-commerce marketplace, today announced a partial spin-off of PhonePe, India’s largest digital payments platform.
In just 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.
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.
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.
In this financing round, PhonePe is raising USD $700Mn in primary capital at a post-money valuation of USD $5.5Bn 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.‘’
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.”