PhonePe, part of the Walmart Inc-controlled Flipkart group, is considering raising funds through an initial public offering for expanding its financial services portfolio and deepening its core United Payments Interface (UPI)-based payments operations, investment banking sources said on Wednesday. The digital payment company is seeking a valuation of USD 8-10 billion, they added.
They stated that the digital payment startup is looking for a valuation of USD 8-10 billion. The business will shortly engage with bankers and legal advisers to move the IPO (Initial Public Offering) process ahead, according to sources.
In addition, the firm has begun planning to relocate its registered holding organization from Singapore to India, demonstrating its made-in-India credentials. The plan to relocate PhonePe’s holding company to India has already been approved by the board of directors.
The firm will list on Indian stock exchanges, as opposed to many businesses that opt to register overseas, especially in Singapore or the United States, to take advantage of more favorable tax and regulatory policies.
Ex-Flipkart executives Sameer Nigam, Rahul Chari, and Burzin Engineer launched PhonePe, which was bought by Flipkart in 2016. Flipkart was bought by Walmart in 2018, and PhonePe was included in the deal.
According to investment banking sources, the company wants to go public after its primary operations become profitable, which it hopes to do by 2023.
PhonePe to raise its workforce strength
PhonePe is considering increasing its workforce strength to 5,200 by the end of December to ride on the growing UPI-based transactions in the country.
The firm has 2,600 employees and 2,800 open job positions across cities such as Bengaluru, Pune, Mumbai, and Delhi.
PhonePe had last raised $700 million in 2020 led by its promoters Flipkart and Walmart at a valuation of $5.5 billion. The digital payments firm has raised a total of $1.7 billion in funding over 13 rounds, including Tiger Global Management and Tencent as investors.
Other Details about PhonePe
PhonePe had last raised USD 700 million in 2020 led by its promoters Flipkart and Walmart at a valuation of USD 5.5 billion. The digital payment company has raised a total of USD 1.7 billion in funding over 13 rounds, including Tiger Global Management and Tencent as investors.
The company has applied for a mutual fund license and a Non-Banking Financial Company (NBFC) license and has acquired three companies — WealthDesk, OpenQ, and GigIndia. PhonePe is the leader in the UPI space enjoying a 47 percent market share in monthly transactions.
At present, PhonePe holds a mutual fund distribution license and will be adding stocks and exchange-traded funds to its growing list of wealth management products.
It announced that it will launch UPI SIP (Systematic Investment Plan) for investment in gold. Users will be able to invest in high purity 24K gold of a specified amount every month. The gold can be accumulated in their insured bank-grade lockers, maintained by MMTC-PAMP and SafeGold.
PhonePe was also in the process of integrating its processes with the Open Network for Digital Commerce (ONDC) pilot, India’s indigenously created open source e-commerce network, with real-time transactions in the retail and food delivery space starting in some cities.
Under ONDC, real-time transactions in the retail and food delivery space have started in some cities such as Shillong and Delhi. Currently, ONDC is focusing more on retailers and restaurants.
