Bengaluru-based ecommerce platform Flipkart is all set to play a major role in payments space as it commits to infuse fresh round of $500 million into the payments platform Phonepe.
A week ago, Singapore-based group entity, Flipkart Payments had announced the funding of $38.7 million in its payment company. This newly committed amount brings it to a grand total of $75 million worth of infusion by Flipkart since the acquisition. PhonePe was acquired by Flipkart in 2015.
This is one of the largest single investment in the Indian financial technology payments space. In May this year, Paytm had raised $1.4 billion from Softbank.
The funding comes when the digital payment space is going through a paradigm shift and witnessing new growth figures. Riding on the positive growth chart, Phonepe aims to achieve its target of 25 billion digital payment transactions by next year.
India’s digital payments sector Will grow to $500 billion by 2020 representing around 15 percent of GDP, up from around $50 billion last year.
“Financial technology and ecommerce are among the most visible faces of a new digital India that is powered by the youth and technology, and both are set for outstanding growth,” said Binny Bansal, group CEO, Flipkart. “PhonePe is a critical part of our overall strategy at Flipkart to build a comprehensive ecosystem for our customers.”
The investment will be used to scale up our technology platforms and expand our merchant network and customer base rapidly, according to Sameer Nigam, cofounder and CEO, PhonePe. “We have been growing at over 100% every two months this year, and this investment will help us maintain the same aggressive growth rate for the next two years.”
PhonePe claims to be a leader in UPI payments and continues to grow at fast pace. In the wallet space, Paytm and Mobikwik are the other competitors.