LAST UPDATED: Dec. 3, 2020, 2:34 p.m.
New Delhi (Anish Yande): PhonePe has raised $700 million through a new round of fundraising, leading it to become a separate entity. The payment platform is “partially” spinning off to become an entity separated from operations by Flipkart and Walmart. The fresh fundraising round of PhonePe was led by Walmart. Some existing investors of PhonePe were also involved in the fundraising round.
Fundraising Round Details:
Through the fundraising round, the valuation of PhonePe rose to $5.5 billion. The partial spin-off would materialize through this round of fundraising, leading PhonePe to the status of a separate entity. The spin-off was in the works since last year, which would reduce Flipkart’s stake in PhonePe to 87% from 100%.
PhonePe would create a new separate Board of Directors. The payments platform would be creating a customized equity incentive program for its employees.
The founder and CEO of PhonePe, Sameer Nigam, released a statement after the fresh fundraising round. Nigam stated that the partial spin-off would provide PhonePe long-term capital for pursuing their vision. This vision entails providing financial services for billion Indians.
PhonePe Surpasses Google Pay in recorded transactions:
In addition to PhonePe becoming a separate entity, PhonePe will also create a tailor-made equity incentive program or Employee Stock Option Plan (ESOP) for its employees.
The payments service recorded 835 million UPI transactions in October. Recorded transactions in Google Pay for October are 820 million transactions.
PhonePe has crossed the Google Pay user base to become the topmost UPI payment app in October. The payment service was founded in December 2015 by three employees formerly at Flipkart.
Kalyan Krishnamurthy, the CEO of Flipkart Group, has stated that the fundraising would help PhonePe to maximize their potential as the payment service moves towards the next phase of the development. The fundraising would maximize value creation for Flipkart as well.
Krishnamurthy stated that as Flipkart Commerce and PhonePe would continue to grow, they are excited for the prospects of the group.
Image Credit: Google