Flipkart on Thursday announced a partial spinoff of PhonePe to facilitate independent fundraising for the payments business. PhonePe is now raising $700 million from Walmart and some other investors of Flipkart and has been valued at $5.5 billion.
Sameer Nigam, CEO of PhonePe, said that while Flipkart will continue to be the absolute majority shareholder, the company will constitute a new board which will have his cofounder Rahul Chari and him, as well as Flipkart co-founder Binny Bansal and a few representatives from Walmart.
The board will also get independent directors who are experts in fin-tech and markets, Nigam told CNBC-TV18.
Post this partial spinoff, Flipkart will hold 87 percent stake in PhonePe, while Walmart will hold a 10 percent stake in PhonePe. Other investors include some of Flipkart's early backers, such as Tiger Global, sources said.
“PhonePe‘s cap-table will have separate standing, and there will also be a separate ESOP programme for employees,” Nigam said.
Nigam added that the company has raised $700 million in primary capital from Flipkart’s existing investors led by Walmart.
“We have got $700 million primary capital, and we can plan a 3-4 year strategy from the war chest."
“We will invest in three areas - to layout merchant acceptance rails, penetrating deeper with our categories in mutual funds, gold, insurance, and for new innovations," he added.
PhonePe claims it has 250 million registered user milestone and 100 million monthly active users (MAU).
It saw ~900 million digital payment transactions in October 2020, giving it the largest market share of nearly 40 percent among all UPI transactions processed in the month.
(Edited by: By Abhishek Jha)
First Published: IST