Walmart shareholding in PhonePe reduces to 85%

American retail giant Walmart’s stake in PhonePe reduced to about 85% at the end of April from 89% three months earlier, as the Indian digital payments startup sold new shares to raise funds as part of a $1-billion fundraising plan.

“During the three months ended April 30, 2023, the company received $0.5 billion related to new rounds of equity funding for the company's majority-owned PhonePe subsidiary,” Walmart, which follows a February-January fiscal year, said in its quarterly report filed with the US Securities and Exchange Commission. This, the company said, reduced the stake to about 85%.

Since January, PhonePe has raised $850 million via five deals, including with private equity firms General Atlantic, Ribbit Capital and Tiger Global participating.


Walmart also infused $200 million in March as part of the fintech’s current funding. The funds are being raised at a pre-money valuation of $12 billion, making it the most valuable privately held fintech in the country.

Walmart had taken over PhonePe as part of its 2018 acquisition of ecommerce firm Flipkart.

The startup kicked off the ongoing funding round after it was hived off from Flipkart in December last year. The round started with General Atlantic investing $350 million in January, followed by an investment of $100 million jointly from fintech backer Ribbit Capital, TVS Capital Funds and Tiger Global. After Walmart infused funds, General Atlantic invested another $200 million across April and May.

ET in March reported that Flipkart cofounder Binny Bansal was also in talks to invest $100-150 million in PhonePe.

Newer horizons

Post the hive off from Flipkart, PhonePe has been looking to double down on its offerings apart from unified payments interface (UPI), in which it is a market leader.

It entered into digital commerce recently with a new app, Pincode, riding on to the Open Network for Digital Commerce protocol.

Among financial services, PhonePe expanded into insurance in 2021, while also receiving an NBFC-AA licence from the Reserve Bank of India to operate as an account aggregator.

It is looking to bolster its wealth management play by entering into the stock broking space. The company already allows users to invest in mutual funds, and has recently started pilots for SME (small, and medium enterprises) lending.

Earlier this year, PhonePe tried to acquire buy-now, pay-later startup ZestMoney. The deal fell through because of concerns raised during the due diligence.

It is now looking to build its credit aspirations in-house, after it has taken a copy of ZestMoney’s loan servicing platform and hired around 130 of its employees.