In a recent round of financing led by Walmart, PhonePe has recently raised $700 million (~Rs. 5,100 crore). On Thursday, announcing the transaction, Flipkart revealed that the payments firm, so far a fully-owned subsidiary of India's largest e-commerce company, was 'partially' spun off into a separate entity and will have a new Board of Directors that will best reflect its new shareholding pattern.
"This partial spin-off gives PhonePe access to dedicated long-term capital to pursue our vision of providing a billion Indians with financial inclusion," PhonePe founder and CEO Sameer Nigam said in a statement. The fund injection now rates PhonePe at $5.5 billion (~Rs. 40,600 crore), according to the official press release. Flipkart continues to remain the largest shareholder of the firm, but according to TechCrunch, its interest will now be reduced to 87 percent from 100 percent.
In addition, the organisation would also build for its staff an Employee Stock Option Plan (ESOP), said Flipkart. This move will help PhonePe leverage its capacity as it moves to the next stage of its growth, and will also maximise value creation for Flipkart and our shareholders, according to Kalyan Krishnamurthy, CEO of the Flipkart Company.
According to a joint statement by Flipkart and PhonePe, the recent capital injection would make it possible for the latter to finance its long-term acquisition plans, even though there is no more word on that front. "The Board of Flipkart determined that this was the right time to partially spin-off PhonePe so that it could access dedicated capital over the next three to four years to fund its long-term ambitions," the statement added.
