Walmart-owned Flipkart and PhonePe on Friday announced the full ownership separation of the digital payments platform as PhonePe plans a massive fundraise followed by an initial public offering (IPO).
PhonePe, which was founded in 2015 by former Flipkart executives Sameer Nigam, Rahul Chari and Burzin Engineer, was acquired by the Flipkart group in 2016.
In December 2020, Flipkart partially spun-off PhonePe which led to the latter raising $700 million from Tiger Global and Walmart at a valuation of $5.5 billion.
PhonePe in October 2022 completed the process of moving its domicile from Singapore to India as it prepared for IPO. The fintech aims to come out with a public float once its core business turns profitable by 2023.
It is now reportedly in the process of raising up to $1 billion from parent Walmart and other investors such as General Atlantic and TigerGlobal at a valuation of over $12 billion. This will make PhonePe the largest valued fintech ahead of Razorpay at $7.5 billion.
Flipkart said the full ownership separation will allow PhonePe and itself chart their own growth paths as they continue to build industry-leading offerings providing access and inclusion to Indians.
“As part of this transaction, existing Flipkart Singapore and PhonePe Singapore shareholders, led by Walmart, have purchased shares directly in PhonePe India. This also completes the move to make PhonePe a fully India-domiciled company, a process that started earlier this year,” Flipkart disclosed. Walmart will remain the majority shareholder of both the business groups.
“Flipkart and PhonePe are proud 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 such as insurance, wealth management and lending,’’ Sameer Nigam, founder and chief executive officer at PhonePe, said. PhonePe has over 40 crore users.
“The Flipkart group has developed many successful entrepreneurs and seen impactful businesses started by former employees. We are proud to see PhonePe grow and thrive as a successful organization. We are confident PhonePe will continue to scale and achieve its vision of providing financial inclusion to millions of Indians,’’ Kalyan Krishnamurthy, CEO of the Flipkart group, said.