Flipkart to plough in $90 million in PhonePe
Flipkart to plough in $90 million in PhonePeEcommerce giant, Flipkart has opted to make an investment of about $90 million in the digital payment platform,PhonePe which is also its marketplace establishment. With this the total fund infused in PhonePecomes up to a sum of $928 million till date whereas on the other hand Flipkart has grown its marketplace to about a $1.88 billion.
The allotment was made last week by FlipkartPvt. Ltd., the holding company of the e-commerce platform where Walmart owns a majority stake. This entity operates PhonePe and Flipkart’s marketplace and logistics business.
The funding for PhonePe comes at a time when the payments company is up against WhatsApp Pay,which is preparing to go live to a wider set of users with the help of Reliance Jio.
Over the last month, Flipkart too has taken a big hit in its core business with the government prohibiting the sale of non-essentials on e-commerce platforms, denting the company’s top line by more than 90 per cent.
It is observed that Flipkart and Amazon are bleeding more money on every delivery than before as the margins on food and fast-moving consumer goods (FMCG) are far thinner than what they earned on smartphones and apparel.
Analysts and industry watchers are now expecting overall growth in the e-commerce sector to be in the mid-single-digits this year, down from almost 35% in 2019. PhonePe, on the other hand, with a total registered user base of 200 million, is also fighting a bruising battle with Google Pay, Amazon Pay, and Paytm.
Founded by Sameer Nigam and Rahul Chari, PhonePe has been looking to raise independent capital since last year but has been unable to do so, largely due to Walmart’s bullishness on the payments business, and a steep valuation ask by the company.
“Walmart will continue to bankroll PhonePe,” said a person in the know. Earlier this year, PhonePe said it sees itself hitting profitability by 2022 and will file for an initial public offering (IPO) in 2023.
Over the last few weeks, PhonePe has restructured its homepage and user interface to feature essential use cases like recharges, bill payments, money transfers prominently and also launched a dedicated Covid-19 information centre on its app. The company, however, has seen its transactions dip by 35% as offline stores remain closed amid Covid-19 outbreak.
It is observed that Flipkart and Amazon are bleeding more money on every delivery than before as the margins on food and fast-moving consumer goods (FMCG) are far thinner than what they earned on smartphones and apparel.
Analysts and industry watchers are now expecting overall growth in the e-commerce sector to be in the mid-single-digits this year, down from almost 35% in 2019. PhonePe, on the other hand, with a total registered user base of 200 million, is also fighting a bruising battle with Google Pay, Amazon Pay, and Paytm.
Founded by Sameer Nigam and Rahul Chari, PhonePe has been looking to raise independent capital since last year but has been unable to do so, largely due to Walmart’s bullishness on the payments business, and a steep valuation ask by the company.
“Walmart will continue to bankroll PhonePe,” said a person in the know. Earlier this year, PhonePe said it sees itself hitting profitability by 2022 and will file for an initial public offering (IPO) in 2023.
Over the last few weeks, PhonePe has restructured its homepage and user interface to feature essential use cases like recharges, bill payments, money transfers prominently and also launched a dedicated Covid-19 information centre on its app. The company, however, has seen its transactions dip by 35% as offline stores remain closed amid Covid-19 outbreak.
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