Following the partial separation announced in December 2020, e-commerce marketplace Flipkart and digital payments platform PhonePe have now been established as separate entities.
With this move, PhonePe becomes a fully India domiciled company. Previously, it was owned and operated by a Singapore entity.
Existing Flipkart Singapore and PhonePe Singapore shareholders, led by Walmart, have purchased shares directly in PhonePe India, said Flipkart in a press release. It also added that Walmart will remain the majority shareholder of both business groups. Its other backers include Temasek, Tiger Global, and Tencent.
“..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,” said Sameer Nigam, Founder and CEO at PhonePe.
The hive-off process was initiated in December 2020 when PhonePe was separated from Walmart-owned Flipkart Group. Even after the separation, Flipkart continued to own a majority share of 87% in the hived-off entity. According to Fintrackr, Walmart and Tiger Global had 10% and 3% stake respectively at that time. The company was valued at $5.5 billion then.
As per a Bloomberg report, PhonePe is looking to raise around $1 billion from new and existing backers at a valuation of $13 billion. If the deal goes through, it will become the highest privately valued fintech platform from India. Its close competitor Paytm had once reached a valuation of $16.5 billion before listing on the bourses.
PhonePe Group was acquired by the Flipkart Group in 2016 and now claims to have 400 million registered users on its platform. It has been dominating the UPI ecosystem and surpassed Google Pay’s UPI transaction volume for the first time in December 2020. Since then, PhonePe has been at the top with more than 45% market share.
In July, PhonePe completed the acquisition of Indus Os after a long battle with the latter’s existing shareholders. As per Entrackr’s sources, PhonePe was expected to pay $60 million for the deal.