E-commerce major Flipkart on Thursday said it was partially spinning off PhonePe, aiming to widen the access of capital for the growth of its digital payments platform. The digital wallet and online payment company will be raising $700 million in primary capital, Walmart-owned Flipkart Group said in a statement.
“Recognizing the momentum that has been achieved, as well as PhonePe’s significant growth potential, Flipkart’s Board determined that this was the right time to partially spin-off PhonePe so it can access dedicated capital to fund its long-term ambitions over the next three to four years,” said Flipkart. 
The funds will be raised at a post-money valuation of $5.5 billion from existing Flipkart investors and Flipkart will continue to hold a majority stake in PhonePe. The e-commerce major said that PhonePe has over 100 million monthly active users (MAU) on its platform which has helped it clocking in nearly one billion digital payment transactions in October, it added.
“This partial spin-off gives PhonePe access to dedicated long-term capital to pursue our vision of providing financial inclusion to a billion Indians,” Sameer Nigam, Founder and CEO, PhonePe said in a statement.