Even as it becomes a separate entity, payments player PhonePe is raising $700 million in primary equity capital led by Walmart at a post-money valuation of $5.5 billion. After the restructuring, Flipkart will retain a majority 87 per centin PhonePe while Walmart will own a direct 10 per cent, via its controlling stake in Flipkart. The remaining 3 per cent in PhonePe will be held by other existing (Flipkart) shareholders, including Tiger Global.
As founder and CEO, PhonePe, Sameer Nigam pointed out, the capital is a war chest that can help the fintech chalk out a three-four year strategy. Nigam said on a leading business television channel that by virtue of being a separate entity PhonePe could incentivize employees, for instance via ESOPs, needed to attract and retain good talent. Moreover,a separate board would allow for independence in decision-making.
He further said a good part of the money would be used to penetrate rural India, across states, in the next two years where digital payments were gaining rapid acceptance. Funds would also be invested in innovation and new platforms as also to grow and strengthen newly-launched products-mutual funds, wealth, insurance and gold.
Nigam has set the firm a stiff target of doubling the registered users to 500 million by December 2022 from over 250 million today in a market where it competes with deep-pocketed players. —FE
📣 The Indian Express is now on Telegram. Click here to join our channel (@indianexpress) and stay updated with the latest headlines