Vivid News 24: Flipkart, an online retailer owned by Walmart, no longer has any equity in PhonePe, a digital payments network, as the two businesses declared on Friday that they had completely split their ownership. Existing Flipkart Singapore and PhonePe Singapore shareholders, led by Walmart, have acquired shares in PhonePe India as part of the agreement.
Walmart will continue to have a majority stake in both company organizations. This completes the transition that began earlier this year to transform PhonePe into a totally India-based business. Flipkart purchased PhonePe in 2016 this occurs at a time when the start up for digital payments is purportedly in discussions to fund about $1 billion at a $12 billion valuation.
The two companies stated in a statement that establishing these businesses as distinct entities will benefit investors and open up new opportunities for them to engage in the Indian digital ecosystem, helping to unlock and maximize enterprise value for shareholders. The e-commerce behemoth claims that by establishing these companies as separate legal entities, both will be able to choose their own pathways for expansion.
One of India’s biggest digital payment systems, PhonePe, controls 40% of the Unified Payments Interface (UPI) network’s market share. The 30% market share cap deadline for third-party apps was recently extended by two years by UPI operator National Payments Corporation of India (NPCI). The new deadline will be December 31, 2024 rather than the earlier January 1, 2023, according to NPCI.
More than one in four Indians now use the PhonePe app, according to the company’s assertion that it has over 400 million registered users. “Flipkart and PhonePe each have user bases of more than 400 million, and they are both proudly manufactured in India.
We are excited for the following stage of our development as we invest in new businesses such as lending, insurance, and wealth management while also enabling the following expansion of UPI payments in India. This will assist advance our mission of bringing financial inclusion to billions of Indians “explains Sameer Nigam, the founder and CEO of PhonePe.
PhonePe says that since its launch, it has digitalized more than 35 million offline retailers scattered across Tier 2, Tier 3, and beyond cities, covering 99% of the nation’s pin codes.
The Flipkart Group has given birth to many prosperous businessmen and has seen cutting-edge ventures start up by former employees. We are happy to witness PhonePe develop and prosper as a stand-alone prosperous business. We have faith that PhonePe will expand and realize its goal of enabling financial inclusion for millions of Indians.
Flipkart continues to be dedicated to its mission of enabling every Indian’s ambition by providing value via innovation in technology and business while assisting small businesses in connecting to markets across India “the CEO of the Flipkart Group, Kalyan Krishnamurthy, said. Indian e-commerce giant Flipkart manages a number of companies, including the fashion shop Myntra and the online travel agency Clear trip.