Flipkart's Binny Bansal sets sights on $100-150 million investment to recharge PhonePe
PhonePe deal to be among largest individual investments in a new-age firm
10 March 2023
Flipkart cofounder Binny Bansal is in talks to invest about $100-150 million in PhonePe as part of an ongoing financing round at the digital payments company.
The transaction, if it goes through, will be among the largest individual investments in a new-age firm.
It will be similar to the $100 million bet taken by Flipkart’s other founder Sachin Bansal in Ola during 2018.
According to insiders, Binny Bansal, co-founder of Flipkart, is negotiating to invest $100-150 million in PhonePe as part of its ongoing funding round. This potential transaction, if completed, would be one of the biggest individual investments in a new-age firm, similar to Sachin Bansal's $100 million investment in Ola in 2018.
“The amount that he (Binny Bansal) is investing is yet to be finalised. The talks have been on and are likely to close soon,” said a person familiar with the discussions.
In this funding round, PhonePe has raised close to $450 million in primary capital from investors such as General Atlantic, Tiger Global, and Ribbit Capital at a valuation of $12 billion. PhonePe was planning to create a new ownership structure and expected existing shareholders from Flipkart like Bansal, Tencent, Tiger Global, Qatar Investment Authority, and Microsoft to purchase a new stake.
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With around 70% stake, Walmart remains the largest investor in PhonePe, which is the dominant online payments app on India's Unified Payments Interface (UPI) and records around four billion transactions monthly. According to Judith McKenna, the President and CEO of Walmart International, the company's total payment volume (TPV) reached $950 billion at the end of 2022.
PhonePe competes with Google Pay, Paytm, Amazon Pay, and WhatsApp Pay on the UPI network. As of December 2021, PhonePe holds a 50.2% market share of UPI transactions by value. The company is reportedly in the final stages of acquiring buy-now-pay-later startup ZestMoney as it looks to monetize through financial services. PhonePe co-founder Sameer Nigam, along with Rahul Chari and Burzin Engineer, previously founded Mime360, which was sold to Flipkart in 2011. Flipkart's acquisition of PhonePe in 2016 was led by its co-founder Binny Bansal, who remains on the company's board. This deal is significant as the technology industry has faced a slowdown in funding activity.
Bansal has invested in Curefoods, a cloud kitchen platform that was separated from Cultfit, a firm founded by Mukesh Bansal and Ankit Nagori in 2016. Three sources revealed that Bansal purchased secondary shares owned by Cultfit in Curefoods, and his ownership increased from under 5% to about 12-13% with a $25-30 million investment.