Flipkart, an Indian e-commerce company, no longer holds a stake in PhonePe. Both companies announced on Friday that they had completed a complete ownership separation of PhonePe. Shareholders in both the Singapore and India entities purchased shares in PhonePe India. This is because PhonePe, acquired in 2016 by Flipkart, has moved its entire base to India.
According to a source, PhonePe is looking to raise $1.5 billion at a $12 billion pre-money valuation and to use some proceeds to purchase back shares from new shareholders.
“The Flipkart Group has developed many successful entrepreneurs and seen impactful businesses started by former employees. We are proud to see PhonePe grow and thrive as a successful organization in its own right,” said Kalyan Krishnamurthy, chief executive of Flipkart Group
In a statement, Kalyan Krishnamurthy said that “We are confident PhonePe will continue to scale and achieve its vision of providing financial inclusion to millions of Indians.
“Flipkart stays committed to its purpose to empower every Indian’s dream by delivering value through innovation in technology and commerce while helping small businesses connect to pan-India markets.”
According to another source, Flipkart does not plan to enter the consumer payments market again. PhonePe stated its intention to separate in 2020. Flipkart’s valuation will be affected by the separation.
PhonePe, India’s leader in mobile payments, was valued at $5.5 Billion in a round of funding it announced in late 2020. Flipkart Group raised $3.6 Billion in July at a value of $37.6 Billion. PhonePe and Flipkart are proud Indian brands that have a user base of over 400 million.
“Flipkart and PhonePe are proud, homegrown Indian brands with a user base upwards of 400 million each. 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 of PhonePe, in a statement.