Walmart-owned E-commerce platform Flipkart and digital payments platform PhonePe publicised the complete ownership separation of PhonePe on Friday, even as the payment platform gears up to raise funds through its IPO.
The split from Flipkart makes PhonePe a completely India-domiciled business, a process that commenced earlier this year. It finished shifting its domicile from Singapore to India in October.
As a result of this separation, existing Flipkart Singapore and PhonePe Singapore shareholders, directed by Walmart, have bought shares directly in PhonePe India. Walmart would continue to stay the majority shareholder in both companies.
The two companies informed this move in a joint press statement. Sameer Nigam, founder and chief executive officer (CEO) of PhonePe said,
“Flipkart and PhonePe are proud, homegrown Indian brands with a user base upwards of 400 million each. “We are looking forward to the next phase of our growth as we invest in new businesses – like insurance, wealth management and lending, while also enabling the next wave of growth for UPI payments in India. This will help propel our vision to provide billions of Indians with financial inclusion.”
CEO of Flipkart Group Kalyan Krishnamurthy said, “Flipkart stays committed to its purpose to empower every Indian’s dream by delivering value through innovation in technology and commerce while helping small businesses connect to pan-India markets.”
Sources say that the move comes at a time when PhonePe is expecting some major developments happening in 2023. The fintech firm is in talks with its parent company Walmart, General Atlantic, and other existing investors to raise about USD 700 million to USD 1 billion. The round is expected to more than double PhonePe’s valuation to around USD 12 billion and make it India’s most-valued financial technology firm ahead of Razorpay, which is valued at USD 7.5 billion.
This funding, as 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 that PhonePe is also set to acquire fintech start-up ZestMoney for USD 200-300 million and the deal may be closed in the next few weeks.