InvestorQ : Why is Flipkart exiting its stake in PhonePe?
Lavanya Subramanian made post

Why is Flipkart exiting its stake in PhonePe?

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Anamika Sodhani answered.
4 months ago
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Let me clarify that Flipkart, which is part of Wal-Mart, is not exiting PhonePe but it is only selling a small stake in PhonePe. In fact, Flipkart will continue to be be the largest majority shareholder of PhonePe even after the sale deal is consummated.

It is estimating that Flipkart sell a partial stake in PhonePe to raise around $700 million to fund its expansion plans. This will give PhonePe, the digital payment website, an overall valuation of $5.50 billion in approximate terms.

PhonePe is currently facing stiff competition in the digital payments business from the likes of Paytm, Google Pay and Amazon Pay. Paytm is backed by Softbank and Warren Buffett. PhonePe processed over 1 billion digital payment transactions in Oct-20 alone.

As per latest available records, PhonePe has 100 million active monthly users and is currently targeting to turn profitable in the year 2022.This will be followed up with an IPO in 2023. Indian digital payment market is expected to double to $135 billion by fiscal 2023.

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