Flipkart to stay PhonePe’s majority shareholder, and the 2 companies will retain their shut collaboration
Flipkart on Thursday introduced a “partial spin-off” of PhonePe to assist the digital funds platform entry devoted, long-term capital to fund its development ambitions. Flipkart, nonetheless, will stay the PhonePe’s majority shareholder.
The firm may even be elevating $700 million in main capital at a post-money valuation of $5.5 billion. The funding comes from current Flipkart traders, led by Walmart.
In the final 4 years, since PhonePe was based, it has garnered over 250 million registered customers with over 100 million month-to-month energetic customers, producing almost one billion digital cost transactions in October 2020.
“Recognizing the momentum that has been achieved, as well as PhonePe’s significant growth potential, Flipkart’s Board determined that this was the right time to partially spin-off PhonePe so it can access dedicated capital to fund its long-term ambitions over the next three to four years,” the corporate mentioned in an announcement.
The partial spin-off, it added, additionally supplies PhonePe a chance to represent a brand new Board of Directors targeted on supporting its improvement, and to create a tailored fairness incentive or ESOP program for its workers.
Flipkart will stay PhonePe’s majority shareholder, and the 2 companies will retain their shut collaboration, it added.
“Flipkart and PhonePe are already among the more prominent Indian digital platforms with over 250 million 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, mentioned.
Meanwhile, Kalyan Krishnamurthy, CEO of Flipkart Group, mentioned, this transfer will assist PhonePe maximize its potential because it strikes to the following part of its improvement, and it’ll additionally maximize worth creation for Flipkart and our shareholders.