Flipkart invested $66 million into its payments arm PhonePe

Tinuku - Flipkart invested about ₹452 crore (US$66 million) into its payments arm PhonePe Pvt. Ltd, at a time when the UPI-based platform is expanding aggressively to take on SoftBank-backed rival Paytm, run by One97 Communications Ltd. According to regulatory documents sourced from Paper.VC, PhonePe received the latest funding from Flipkart in July.

PhonePe has been Flipkart’s big bet in digital payments after several failed attempts between 2013 and 2015. In October last year, Flipkart said it would invest US$500 million to expand PhonePe. The commitment was in addition to the $75 million infused by Flipkart in mobile payments businesses since it acquired PhonePe in April 2016.

Tinuku Flipkart invested $66 million into its payments arm PhonePe

Last week, PhonePe claimed that it was the largest UPI-based payments player in the country, ahead of the likes of Paytm and Google Tez, citing data from the National Payments Corporation of India (NPCI).

In July, PhonePe bought the point of sale (PoS) business of Zopper, a hyperlocal mobile marketplace for small and medium-sized businesses, as part of a broader strategy to ramp up its offline business. In November last year, PhonePe launched its own point-of-sale device for small merchants.

Since Flipkart bought PhonePe, which was started by three former Flipkart executives Sameer Nigam, Rahul Chari and Burzin Engineer, the payments business has emerged as an integral part of Flipkart’s overall strategy. During the talks leading up to the US$16-billion buyout of Flipkart, Walmart is believed to have valued PhonePe at around US$1-1.5 billion, Mint reported on 9 May.

Since the beginning of the year, PhonePe has started to offer a range of services, including bus ticket bookings and food ordering, through tie-ups with service providers, starting with ticketing platform RedBus, as it looks to extend its platform and compete with market leader Paytm.