Flipkart to hive off PhonePe; digital payment platform eyes $700 million funding

Ecommerce giant Flipkart on Thursday announced a partial spin-off of digital payments platform PhonePe, in a move aimed at widening access to capital to fuel its growth.

In this financing round, PhonePe is planning to raise $700 million in primary capital at a post-money valuation of $5.5 billion from existing Flipkart investors led by Walmart.

Flipkart will remain PhonePe’s majority shareholder, and the two businesses will retain their close collaboration, a statement by Flipkart said.

The funds will be raised at a post-money valuation of $5.5 billion from existing Flipkart investors led by Walmart, the statement said.

The payments platform is said to have over 100 million monthly active users (MAU), generating nearly one billion digital payment transactions in October 2020.

"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," Sameer Nigam, Founder and CEO at PhonePe, said.