Walmart Inc-controlled Indian e-commerce firm Flipkart said on Thursday it was incompletely turning off PhonePe in a move pointed toward augmenting the digital payments platform’s access to funding to fuel its development. PhonePe will bring $700 million up in essential capital, Bengaluru-based Flipkart said in an explanation.
“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,” Flipkart said.
The funds will be collected at a post-cash valuation of $5.5 billion from existing Flipkart speculators drove by Walmart, the assertion said. Flipkart will keep on being PhonePe’s larger part investor.
“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,” said Sameer Nigam, Founder and CEO at PhonePe.
Flipkart said PhonePe has in excess of 100 million monthly active clients which encouraged it clock almost one billion digital payments transactions in October.
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.”
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