Flipkart announces partial spin-off of PhonePe; to remain majority shareholder

Flipkart on Thursday announced a partial spin-off of 'PhonePe'. The move will help the digital payment platform access dedicated and long-term capital to fund its growth ambitions over the next three to four years.

Commenting on this development, Kalyan Krishnamurthy, CEO of Flipkart Group, said, "As Flipkart Commerce continues to grow strongly serving the needs of Indian customers, we are excited at the future prospects of the group. This move will help PhonePe maximize its potential as it moves to the next phase of its development, and it will also maximize value creation for Flipkart and our shareholders."

Flipkart said it will remain PhonePe's majority shareholder and the two businesses will retain their close collaboration. In this financing round, PhonePe is raising USD 700 million in primary capital at a post-money valuation of USD 5.5 billion from existing Flipkart investors led by Walmart.

"Flipkart and PhonePe are already among the more prominent Indian digital platforms with over 250Musers 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," said Sameer Nigam, Founder and CEO at PhonePe.

PhonePe is one of India's leading digital payments platform with over 250 million registered users and over 100 million monthly active users (MAU) generating nearly one billion digital payment transactions in October 2020.