Startups Disunion Flipkart Finishes Entire Severance of Phonepe
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Startups Disunion: Flipkart Finishes Entire Severance of Phonepe

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Startups Disunion: Flipkart, a dominant player in Indian e-commerce, has sold its interest in the payments company PhonePe. On Friday, the two companies announced that they had achieved a full ownership separation of PhonePe and that shareholders in their Singapore-based companies had bought shares in PhonePe’s India-based company directly.

The modification coincides with PhonePe’s decision to move its whole base to India when Flipkart acquired it in 2016. The payments company is in discussions to raise up to $1.5 billion at a $12 billion pre-money value and use some of the proceeds to buy back some shares, according to a source with knowledge of the matter.

The primary stakeholder in both companies is still Walmart.

Flipkart is still committed to its purpose of making every Indian’s dream a reality by bringing value via business and technological innovation and by aiding small businesses in reaching markets all throughout India.

Another source with knowledge of the situation claims that Flipkart has no plans to return to the consumer payments industry. In late 2020, PhonePe declared its plan to separate from its parent company.

The valuation of Flipkart will be somewhat impacted by the separation. In a funding round that it announced in late 2020, PhonePe, which dominates the mobile payments market in India, was valued at $5.5 billion. Flipkart Group raised $3.6 billion in July at a $37.6 billion value.

We anticipate the next phase of our development as we invest in fresh industries like lending, insurance, and wealth management and support the upcoming upsurge in UPI payments in India. The founder and CEO of PhonePe, Sameer Nigam (shown above), claims that “this will help progress our mission to provide billions of Indians with financial inclusion.”

With a market share of over 40%, PhonePe dominates the nation’s native UPI app as the leading payments app. In an unexpected extension to the deadline, India said earlier this month that it will not implement a check on the market share for firms operating on the domestic payments network until December 31, 2024, which analysts said is a huge victory for the industry leaders PhonePe and Google Pay.