The digital business of the Walmart Inc-controlled Indian e-commerce firm Flipkart will be partially spun off, the company said on Thursday. Its digital payment app PhonePe will be spun off to broaden the businesses access to the capital markets for faster growth of the platform.
The Bengaluru based Flipkart said in a statement that it plans to raise as much as $700 million in primary capital to fuel growth. PhonePe – the digital payment platform of Flipkart operates in direct competition in the Indian market with Alibaba backed home grown payments pioneer Paytm and Google Pay.
The statement form the company said that existing Flipkart investors led by Walmart, will from the source of raising the additional funds which is expected to give a valuation to PhonePe of $5.5 billion including the fundraising,
It added that despite the fund raising round, PhonePe's majority shareholder will still be Flipkart.
"We are really excited to have access to dedicated long-term capital to further our ambitions in the financial services distribution sector as well as creating large innovative growth platforms for India's micro, small and medium enterprises," PhonePe CEO Sameer Nigam said.
Nigam has previously said that he expects PhonePe to become profitabile by 2022 and there are plans of floating the company on the stock exchange the following year.
In the month of October, PhonePe – the fintech firm of Flipkart, managed to achieve digital payment transactions worth almost one billion driven by its huge subscriber base of more than 100 million monthly active users.
It is expected that in 2032, the total value of the digital payments market in India will be more than twice of what it was in 2019 to reach a total of $135 billion. This prospect of the sector has therefore caught the fancy of major international players in the segment with the likes of Amazon.com and Facebook Inc showing interest and investing in the industry in India. Both the companies have come up with their own systems to attract customers and users.
India's flagship payments processor, the National Payments Corp of India (NPCI), has driven the rapid growth in fintech industry in the country and has capped the share of digital transactions some companies can account for.
It is expected that the growth of payments services offered by Facebook, Google and PhonePe will be hindered by the move of the NPCI which was announced last month, while potentially helping out the business of the likes of Reliance's Jio Payments Bank and Paytm, which have niche bank licenses.
(Source:www.foxbusiness.com)
The Bengaluru based Flipkart said in a statement that it plans to raise as much as $700 million in primary capital to fuel growth. PhonePe – the digital payment platform of Flipkart operates in direct competition in the Indian market with Alibaba backed home grown payments pioneer Paytm and Google Pay.
The statement form the company said that existing Flipkart investors led by Walmart, will from the source of raising the additional funds which is expected to give a valuation to PhonePe of $5.5 billion including the fundraising,
It added that despite the fund raising round, PhonePe's majority shareholder will still be Flipkart.
"We are really excited to have access to dedicated long-term capital to further our ambitions in the financial services distribution sector as well as creating large innovative growth platforms for India's micro, small and medium enterprises," PhonePe CEO Sameer Nigam said.
Nigam has previously said that he expects PhonePe to become profitabile by 2022 and there are plans of floating the company on the stock exchange the following year.
In the month of October, PhonePe – the fintech firm of Flipkart, managed to achieve digital payment transactions worth almost one billion driven by its huge subscriber base of more than 100 million monthly active users.
It is expected that in 2032, the total value of the digital payments market in India will be more than twice of what it was in 2019 to reach a total of $135 billion. This prospect of the sector has therefore caught the fancy of major international players in the segment with the likes of Amazon.com and Facebook Inc showing interest and investing in the industry in India. Both the companies have come up with their own systems to attract customers and users.
India's flagship payments processor, the National Payments Corp of India (NPCI), has driven the rapid growth in fintech industry in the country and has capped the share of digital transactions some companies can account for.
It is expected that the growth of payments services offered by Facebook, Google and PhonePe will be hindered by the move of the NPCI which was announced last month, while potentially helping out the business of the likes of Reliance's Jio Payments Bank and Paytm, which have niche bank licenses.
(Source:www.foxbusiness.com)
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