PhonePe, the crown jewel in Flipkart’s acquisition by Walmart, is “partially” spinning off, the financial services firm said on Thursday. To kick off its new journey, the firm said it has secured $700 million in a new financing round.
This round, the name of which was not disclosed, was led by Walmart with participation from some existing investors, PhonePe said. The new round gave PhonePe, which was founded by a former Flipkart employee, a post-money valuation of $5.5 billion.
Today’s announcement is a big boost to the confidence investors have on PhonePe. The startup has been engaging with investors for new capital for several quarters and had struggled to raise capital at a $3 valuation earlier this year, TechCrunch reported earlier.
The partial spin-off means that Flipkart’s stake in PhonePe will reduce from a 100% to 87%. “This partial spin-off gives PhonePe access to dedicated long-term capital to pursue our vision of providing financial inclusion to a billion Indians,” said Sameer Nigam, founder and chief executive of PhonePe, in a statement.
“As Flipkart Commerce continues to grow strongly serving the needs of Indian customers, we are excited at the future prospects of the group. This move will help PhonePe maximize its potential as it moves to the next phase of its development, and it will also maximize value creation for Flipkart and our shareholders,” said Kalyan Krishnamurthy, CEO of Flipkart Group, in a statement.
More to follow…