Flipkart Splits PhonePe In a Separate Unit, Latter to Raise $700 Mn at $5.5 Bn Valuation The Flipkart board has taken this decision to allow PhonePe to access dedicated capital to fund its long-term ambitions over the next three to four years

By Shipra Singh

You're reading Entrepreneur India, an international franchise of Entrepreneur Media.

Entrepreneur Media

Nearly four years after acquiring PhonePe, Walmart-owned Flipkart has decide to partially spin-off the financial services company in a separate entity.

Flipkart said in a statement that the board has taken this decision to allow PhonePe to access dedicated capital to fund its long-term ambitions over the next three to four years. In line with this, the 5-year-old startup will raise USD 700 million in primary capital, in a round led by Walmart along with participation from some existing investors.

The latest capital infusion will value PhonePe at USD 5.5 billion.

Post the spin-off, Flipkart will continue to be a major stakeholder in PhonePe with 87 per cent stake, as per a report by Bloomberg Quint. "This partial spin-off gives PhonePe access to dedicated long-term capital to pursue our vision of providing financial inclusion to a billion Indians," said Sameer Nigam, founder and CEO, PhonePe.

PhonePe started as a mobile payments app and has over the years forayed into financial services. In October, it surpassed Google Pay to record largest UPI transactions on its platform at 835 million.

Commenting on the development, Kalyan Krishnamurthy, CEO, Flipkart Group, said "As Flipkart Commerce continues to grow strongly serving the needs of Indian customers, we are excited at the future prospects of the group. This move will help PhonePe maximize its potential as it moves to the next phase of its development, and it will also maximize value creation for Flipkart and our shareholders."

Shipra Singh

Entrepreneur Staff

Freelance Journalist

Business News

JPMorgan Shuts Down Internal Message Board Comments After Employees React to Return-to-Office Mandate

Employees were given the option to leave comments about the RTO mandate with their first and last names on display — and they did not hold back.

Business Ideas

70 Small Business Ideas to Start in 2025

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2025.

News and Trends

NeoSapien Secures INR 80 Lakhs on Shark Tank India 4 for AI Wearable

Founded in 2024 by Dhananjay Yadav and Aryan Yadav, NeoSapien aims to integrate AI into daily life through its wearable technology

News and Trends

Recur Club Announces Credit Offerings for Startups Beyond Series A and SMEs

In FY 24–25, the platform also plans to deploy an additional INR 2000 crores through its Recur Swift program for startups.

Leadership

Praveen Someshwar to Succeed Hina Nagarajan as CEO of Diageo India

Praveen Someshwar will take over as managing director and CEO from Hina Nagarajan, effective from April 1, 2025. Someshwar will join as CEO-designate on March 1, 2025, before officially assuming the role.

News and Trends

Riceberg Ventures Launches $20 Million Fund to Support DeepTech Startups

The fund plans to invest in 25-30 startups globally, with an average ticket size of USD 0.5 million per investment