Digital payment app PhonePe announced partnering up with e-commerce giant Flipkart to enable a pay-on-delivery service. Customers who opt for the COD option will be able to pay digitally through any UPI app. PhonePe’s dynamic QR code solution will enable customers to do so. In December 2020, Flipkart announced a spin-off with PhonePe. The payments app had raised $700 mn funding valuing it at $5.5bn. This project aims to reduce contact and increase digitisation of the country.
PhonePe has acquired Indian android store Indus App Bazaar for Rs.438 cr. An official statement by both companies is yet to be released. Indus App Bazaar serves over 100 mn users and is available in 13 Indian languages with 40,000 apps being a part of the android store. App Bazaar aims to make apps easily accessible to everyone with an enhanced app store ecosystem. To date, Indus OS has earned nearly $20 mn.
PhonePe is set to enter the stockbroking business. The fintech startup has applied for the license from the SEBI and is waiting for the mandatory approvals. PhonePe aims to tap its existing user base to foray into the broking business by encouraging them to invest a part of the unutilised funds in wallets in stocks. PhonePe, in March, processed 1.19 bn UPI transactions to the tune of Rs 2.31 lakh cr to grab 44% of the UPI market share.
WhatsApp Pay UPI transactions volume doubled in Dec as it processed 0.81 mn payments worth Rs 29.72 cr, an over 100% rise in both volume and value compared to Nov, as per NPCI data. PhonePe and Google Pay processed 902.03 mn and 854.49 mn transactions, respectively. PhonePe overtook Google Pay as the most-used UPI app in the month, facilitating transactions worth Rs 1.82 lakh cr, with a market share of 40%. Paytm processed 256.36 mn payments.
PhonePe reported a 74% rise in yearly revenue to Rs 147.21 cr in the FY ended March 2020, from Rs 245.8 cr a year earlier. Its total loss narrowed 7% to Rs 1,772.93 cr, YoY. The business unit’s total expenses were up 2% to Rs 2,202.91 cr. Advertising and promotional charges, its largest expenditure, dropped 22% to Rs 1,016,64 cr. Employee costs, another big cost centre, were cut 10% to Rs 478.92 cr.
Flipkart and PhonePe have space for other investors and can even go for stock market listings, said Walmart CEO Doug McMillon. McMillon, however, did not share details but said both Flipkart and PhonePe could diversify in a number of ways, including IPOs. Walmart bought around 77% of Flipkart for roughly $16 bn in 2018. Bengaluru based Flipkart, was earlier reported, to preparing for an IPO overseas in the year 2021, which could value the firm at up to $50 bn.
Flipkart co-founder Binny Bansal will join PhonePe’s board of directors, as it separates from parent Flipkart to become independent. PhonePe co-founders Sameer Nigam, Rahul Chari, Rohit Bhagat and two other independent directors from Walmart will be also on the board. Bansal in Nov 2018 had resigned from Flipkart following an internal investigation into an allegation of “serious personal misconduct”. He has now co-founded startup consultancy xto10x Technologies.
PhonePe is “partially” spinning off to kick off a new journey after it has secured $700 mn in a new financing round. The partial spin-off means that Flipkart’s stake in PhonePe will reduce from 100% to 87%. However, the “two businesses will retain their close collaboration.” The round was led by Walmart with participation from some existing investors gave PhonePe a post-money valuation of $5.5 bn. PhonePe has amassed over 100 mn monthly active users.