Flipkart Phonepe finally separates as Fintech firm gears up to raise funds
The two companies informed about this in a joint press release. As a result of this separation, existing Flipkart Singapore and PhonePe Singapore shareholders, directed by Walmart, have purchased shares directly in PhonePe India. Walmart will continue to be the majority shareholder in both companies
Walmart-owned e-commerce platform Flipkart and digital payments platform PhonePe announced the complete ownership separation of PhonePe on Friday, even as the payments platform prepares to raise funds through its IPO.
The demerger from Flipkart makes PhonePe a fully India-domiciled business, a process that began earlier this year. It finished moving home from Singapore to India in October.
As a result of this separation, existing Flipkart Singapore and PhonePe Singapore shareholders, directed by Walmart, have purchased shares directly in PhonePe India. Walmart will continue to be the majority shareholder in both companies.
The two companies informed about this in a joint press release. Sameer Nigam, Founder and Chief Executive Officer (CEO) of PhonePe said, “Flipkart and PhonePe are proud, homegrown Indian brands with a user base of over 400 million each. “We look forward to the next phase of our growth as we invest in new businesses – such as insurance, wealth management and lending, while enabling the next wave of growth for UPI payments in India. This will help drive our vision of providing financial inclusion to billions of Indians.”
Flipkart Group CEO Kalyan Krishnamurthy said, “Flipkart remains committed to its mission of empowering every Indian’s dream by delivering value through innovation in technology and commerce while helping small businesses connect to pan-India markets.”
Sources say the move comes at a time when PhonePe expects some big developments to happen in 2023. The fintech firm is in talks with parent company Walmart, General Atlantic and other existing investors to raise around $700 million-$1 billion. The round is expected to more than double PhonePe’s value to around $12 billion and make it India’s most valued financial technology company ahead of Razorpay, which is valued at $7.5 billion.
This funding, experts feel, is expected to help PhonePe scale up its operations and enable it to be in direct competition with names like Google Pay, Paytm and Amazon Pay in the Indian fintech sector. Industry insiders say PhonePe is also set to buy fintech startup ZestMoney for $200-300 million, and the deal could close in the next few weeks.
