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Flipkart Announces Partial Spin-Off of PhonePe to Help Fuel Long-Term Growth Plans

PhonePe’s partial spin-off will help it access dedicated capital to fund its long-term ambitions over the next three to four years.

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Flipkart Announces Partial Spin-Off of PhonePe to Help Fuel Long-Term Growth Plans

The partial spin-off also provides PhonePe an opportunity to constitute a new board of directors

Highlights
  • PhonePe has crossed 250 million registered users in just four years
  • Flipkart will remain PhonePe's majority shareholder
  • The two businesses will retain their close collaboration

Flipkart on Thursday announced a partial spin-off of PhonePe in a move that will help the digital payments platform to access dedicated, long-term capital to fund its growth ambitions.

PhonePe has crossed the 250 million registered user milestone in just four years with over 100 million monthly active users, generating nearly one billion digital payment transactions in October.

Flipkart said its board of directors 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 partial spin-off also provides PhonePe an opportunity to constitute a new board of directors focused on supporting its development, and to create a tailor-made equity incentive or employee stock option (ESOP) programme for its employees.

In this financing round, PhonePe is raising $700 million (roughly Rs. 5,200 crores) in primary capital at a post-money valuation of $5.5 billion (roughly Rs. 40,600 crores) from existing Flipkart investors led by Walmart.

Flipkart will remain PhonePe's majority shareholder, and the two businesses will retain their close collaboration.


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Further reading: Flipkart, PhonePe
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