Indian e-commerce giant Flipkart has announced the separation of the digital payments platform Phonepe, setting the two businesses as separate entities. Flipkart will no longer own any stake in PhonePe, said its parent company.
The businesses will now chart their separate growth paths.
The move comes as PhonePe, which was acquired by Flipkart in 2016, has decided to move its entire operational base to India. The payments startup has to win back shares it’s going to lose because of the separation.
As part of this transaction, existing Flipkart Singapore and PhonePe Singapore shareholders, led by US behemoth Walmart, have purchased shares directly in PhonePe India. This completes the move to make PhonePe a fully India-domiciled company, a process that started earlier this year.
Walmart will remain the majority shareholder of both business groups.
According to the Flipkart press statement, the move will provide value and create new opportunities for investors to participate in the Indian tech ecosystem – helping unlock and maximize enterprise value for shareholders of the two companies.
PhonePe founder and CEO Sameer Nigam said, “Flipkart and PhonePe are proud, home-grown 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. This will help propel our vision to provide billions of Indians with financial inclusion.”
Flipkart Group’s chief executive officer Kalyan Krishnamurthy, “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 organization in its own right. We are confident PhonePe will continue to scale and achieve its vision of providing financial inclusion to millions of Indians.”