Online retailer Flipkart Group spun off part of its digital payment arm PhonePe, clearing the unit to raise $700 million to fund fresh developments from a group of existing investors led by US retail giant Walmart.
In addition to allowing it to tap third-party capital, Flipkart explained the move values PhonePe at $5.5 billion, and enables the unit to create its own board of directors focused on its development and offer employees new stock benefits.
Flipkart retains a majority stake of around 87 per cent in PhonePe: it said the companies will continue to work closely together.
Sameer Nigam, PhonePe founder and CEO, said the move provided it with the “dedicated long-term capital” required to achieve a goal of “providing financial inclusion to a billion Indians”.
In October, PhonePe staked a claim as the top mobile payments provider in India [1], stating it handled a record 925 million transactions for its more than 250 million registered users.
It faces competition from WhatsApp, which launched a payments service in the country [2] in November, and Google Pay, currently in second place by transaction volume.
[1] https://www.mobileworldlive.com/money/news-money/phonepe-claims-india-payments-market-leadership
[2] https://www.mobileworldlive.com/money/news-money/whatsapp-finally-brings-payments-to-india
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