Flipkart has pumped a total of $ 90 million into its market entity and PhonePe digital payment platform, according to Singapore regulatory filings.
This brings the total infusion of funds in PhonePe to $ 928 million so far, and the Flipkart market to $ 1.88 billion.
Last week allotment was made by Flipkart Pvt. Ltd., The holding company of the e-commerce platform where Walmart owns a majority stake. This entity operates PhonePe, Flipkart, and logistics business.
Funding for PhonePe comes at a time when the payment company is against WhatsApp Pay, which is preparing to launch for a wider group of users, with the help of Reliance Jio. Over the past month, Flipkart has also had great success in its core business as the government has banned the sale of non-essentials products on e-commerce platforms, affecting the company's top-line by more than 90%.
On Monday, ET reported that Flipkart and Amazon are spending more money on every delivery than before, as margins on (FMCG) fast-moving consumer goods are much thinner than what they earned on smartphones and apparel.
Industry analysts and watchers now expecting total growth in the e-commerce sector to be in the mid-single digits this year, down from around 35% in 2019. On the other hand, with PhonePe a total user base of 200 million registered, fighting a tough battle with Google Pay and Amazon Pay and Paytm.
Founded by Sameer Nigam and Rahul Chari, PhonePe has been seeking independent capital raise since last year, but it has been unable to do so, largely due to Walmart's bullishness on the payments and a strong appraisal from the company.
"Walmart will continue to bankroll PhonePe,”. Earlier this year, PhonePe said it sees profitability in 2022 and will present an Initial Public Offering (IPO) in 2023.
In an effort to create an open ecosystem of services, PhonePe has expanded across categories such as food delivery, hyperlocal delivery, travel, and entertainment. It is one of the largest UPI transactions platforms in the country.
Over the last few weeks, PhonePe has restructured its home page and user interface to feature essential use cases like recharges, bill payments and money transfer prominently, and also launched Covid-19 information center on its app. However, the company saw its transactions dip by 35% as offline stores remain closed amid the Covid-19 outbreak.
Source: Economic Times, Business Standards
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