Flipkart announced a partial spin-off of PhonePe on Thursday to give the digital payments platform access to dedicated, long-term capital to fund its growth ambitions.
PhonePe passed the 250 million registered user milestone in just four years with over 100 million active users per month and generated nearly a billion digital payment transactions in October.
According to Flipkart, the board of directors has determined that this is the right time to partially outsource PhonePe so that the company can access dedicated capital over the next three to four years to fund its long-term ambitions.
The partial spin-off also gives PhonePe the opportunity to form a new Board of Directors focused on supporting its development and create a bespoke Equity Incentive or Employee Stock Options (ESOP) program for its employees.
In this funding round, PhonePe is raising $ 700 million in primary capital from existing Flipkart investors, led by Walmart, with a post-money valuation of $ 5.5 billion (approx. Rs. 40,600 million) Billion Rs.).
Flipkart remains the majority shareholder in PhonePe and the two companies will continue to work closely together.
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