Walmart-owned ecommerce giant Flipkart and digital payments unicorn PhonePe on Friday announced full ownership separation as the latter prepares for an IPO.
The PhonePe Group, founded by Sameer Nigam, Rahul Chari and Burzin Engineer, was acquired by the Flipkart Group in 2016. Flipkart had later partially hived off PhonePe as a separate entity in 2020.
As part of the transaction, the shareholders of the Singapore entities of both firms have purchased shares directly in PhonePe’s India entity.
Walmart will remain the majority shareholder of both business groups.
This completes the move to make PhonePe a fully India-domiciled company, a process that started earlier this year, the company said in a statement.
Ahead of its plan to hit the Indian public market, the company, in October, moved its registered entity from Singapore to India. PhonePe is looking to go in for a massive fundraise, which will make it the most-valued fintech startup in India, as per media reports.
“Setting up these businesses as separate entities will also provide value and create new opportunities for investors to participate in the Indian tech ecosystem – helping unlock and maximise enterprise value for shareholders of the two companies,” the companies said in a joint statement.
PhonePe, which is among the top payments app on UPI, commands over 40% of market share. Besides payments, the firm has expanded into other financial services like gold, insurance, and mutual funds, and is also looking at launching its own payment gateway. It recently acquired BNPL platform Zestmoney to tap into the lending segment.
Expanding its suit, the digital payment firm has also acquired GigIndia, WealthDesk, OpenQ and IndusOS, as part of its bigger plan to create a superapp.
“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,” said Sameer Nigam, Founder and CEO at PhonePe.
“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 organisation in its own right,” said Kalyan Krishnamurthy, CEO of Flipkart Group.
“We are confident PhonePe will continue to scale and achieve its vision of providing financial inclusion to millions of Indians.” Kalyan added.
