Flipkart and PhonePe complete separation six years after acquisition

Six years after the e-commerce behemoth acquired PhonePe, the two companies have now officially announced their separation, they stated in a joint statement on Friday. After the separation was finalised, PhonePe became wholly an Indian-domiciled business.
Recall that in October, PhonePe relocated its registered office from Singapore to India. u201cSetting up these businesses as separate entities will also provide value and create new opportunities for investors to participate in the Indian tech ecosystem u2013 helping unlock and maximize enterprise value for shareholders of the two companies,u201d the companies said.
According to a Bloomberg story, the split occurs as PhonePe is attempting to raise money at a valuation of close to $13 billion. If it is successful, it will rise to the position of India’s most valuable fintech startup. 2020 saw the company raise $700 million from new investors Walmart and Tiger Global at a valuation of $5.5 billion.
While media reports earlier suggested that PhonePe was planning an IPO, the companyu2019s founder and CEO Sameer Nigam in June 2022 dismissed the reports, saying, u201cPhonePe is not planning an IPO right now. We are focusing on building our business, and will go public once our core businesses turn profitable and our new initiatives have achieved a good product-market fit and scale,u201d according to a PTI report.
The current shareholders of Flipkart Singapore and PhonePe Singapore, led by Walmart, have acquired equity directly in PhonePe India as part of the split of the two businesses.
According to the announcement, Walmart will continue to be PhonePe and Flipkart’s largest stakeholder. u201cWe are looking forward to the next phase of our growth as we invest in new businesses u2013 like insurance, wealth management and lending, while also enabling the next wave of growth for UPI payments in India. This will help propel our vision to provide billions of Indians with financial inclusion,u201d said Nigam in the statement.The separation of Flipkart and PhonePe may potentially affect the former’s valuation; the e-commerce behemoth, which is now valued at $37.6 billion following a $3.6 billion fundraise in 2021, was allegedly eyeing a $60-70 billion valuation for its anticipated IPO in the US in 2023.
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