Amidst the eye-catching discounts on offer during Flipkart’s recently concluded Big Billion Days sale, a curious development went largely unnoticed. PhonePe, the payments company acquired in 2016 by Flipkart, no longer occupied pride of place on the checkout page. Instead, it was just another in a long line of payment options. PhonePe also wasn’t offering the massive cashbacks that it did on previous Big Billion Day sales.

This was a marked change for both companies. Earlier, Walmart-owned Flipkart was PhonePe’s benefactor—both in terms of capital and as a source for users. PhonePe understood this well, taking on Flipkart’s challenges as if they were its own.

The demands of the Big Billion Days sale, for example, extended to PhonePe. “Usually, during the time of the [Big Billion Days] sale, people in PhonePe aren’t allowed to take leaves and work nights just like those in Flipkart. But this time around, Big Billion Days was insignificant for PhonePe,” said an executive associated with the Flipkart Group.

But while few outside the company noticed this new normal, it was the latest and clearest sign yet that three-year-old PhonePe had outgrown its parent, Flipkart. “Three years ago, Flipkart accounted for more than 50% of transactions on PhonePe, but now it is less than 0.5% of the 350 million transactions we do in a month,” said Karthik Raghupathy, PhonePe’s head of strategy and planning.

According to sources, Walmart and Chinese conglomerate Tencent, both investors at Flipkart, are expected to invest $1 billion into PhonePe. This will be at a $9-10 billion post-money valuation, said two sources aware of the matter. This would bring it close to Flipkart, valuation-wise. In 2017, a year before Walmart bought Flipkart Group for $16 billion in the world’s largest e-commerce deal, Flipkart’s valuation was $11.6 billion. It took the Bengaluru-born e-commerce company a decade to get there. PhonePe, which was founded only in 2015, is inching closer to decacorn status—startups valued at $10 billion and over.

And as PhonePe grows into a payments behemoth—with claims of 65 million monthly active users and an annualised $100 billion worth of transactions—reports say it will be hived off into a separate unit. This could mean Walmart and Tencent, along with PhonePe co-founders Sameer Nigam and Rahul Chari, will get to own a piece of PhonePe. So far, those in PhonePe either own Flipkart stock or stock options. A PhonePe spokesperson maintained that news of funding and PhonePe being hived off as a separate entity was speculation. 

PhonePe’s burgeoning potential has been a blessing for Walmart. The company drew the ire of investors with its Flipkart acquisition. But having received not one but two multi-billion-dollar companies through the deal, the upside looks better than it once did. For a large, value-conscious public limited company with a steely-focus on profits, though, this means little without profitability.

AUTHOR

Arundhati Ramanathan

Arundhati is Bengaluru-based. She is interested in how people use money in the digital age and how new economies will take shape based on that interaction. She has spent over 10 years reporting and writing on various subjects. Previous stints were at Mint, Outlook Business and Reuters.

View Full Profile

Subscribe to read this story

The Ken is the only business subscription you need. Questions?

 

Premium

  • 5 original and reported longform business stories every week
  • Access to ONLY India edition
  • Close to 250 exclusive stories every year
  • Full access to over 5 years of paywalled stories
  • Pick up to 5 premium subscriber newsletters
  • 4 original and reported longform business stories each week
  • Access to ONLY Southeast Asia edition
  • Close to 200 exclusive stories every year
  • Full access to all paywalled stories since March 2020
  • Pick up to 5 premium subscriber newsletters

Rs. 2,750 /year

$ 120 /year

India Edition
Subscribe Subscribe
Most Asked For

Borderless

  • 8 original and reported longform business stories each week
  • Access to both India and Southeast Asia editions
  • Close to 400 exclusive stories every year
  • Full access to over 5 years of paywalled stories across India and Southeast Asia
  • Unlimited access to all premium subscriber newsletters
  • Visual Stories

Rs. 4,200 /year

Subscribe
 

Echelon

  • 8 original and reported longform business stories each week
  • Access to both India and Southeast Asia editions
  • Close to 400 exclusive stories every year
  • Full access to over 5 years of paywalled stories across India and Southeast Asia
  • Unlimited access to all premium subscriber newsletters
  • Visual Stories
  • Bonus annual gift subscription
  • Priority access to all new products and features

Rs. 8,474 /year

Subscribe
Or

Questions?

What kind of subscription plans do you offer?

We have three types of subscriptions
- Premium which gives you access to either the India or the Southeast Asia edition.
- Borderless which gives you complete access to The Ken across both editions
- Echelon which gives you complete access to The Ken across both editions along with a bonus gift subscription

What do I get if I subscribe?

The Premium edition gives you access to stories in that edition along with any five subscriber-only newsletters of your choice.

The Borderless and Echelon subscription gives you complete access to The Ken across editions and unlimited access to as many newsletters as you like.

What topics do you usually write about?

We publish sharp, original and reported stories on technology, business and healthcare. Our stories are forward-looking, analytical and directional — supported by data, visualisations and infographics. We use language and narrative that is accessible to even lay readers. And we optimise for quality over quantity, every single time.

Our specialised subscriber-only newsletters are written by our expert, award-winning journalists and cover a range of topics across finance, retail, clean energy, cryptocurrency, ed-tech and many more.

How many newsletters do you have?

We are constantly adding specialised subscriber-only newsletters all the time. All of these are written by our team of award-winning journalists on a specialised topic.

You can see the list of newsletters that we publish over here.

Does a Premium subscription to your Indian edition get me access to the Southeast Asia edition? Or vice-versa?

Afraid not. Each edition is separate with its own subscription plan. The India edition publishes stories focused on India. The Southeast Asia edition is focused on Southeast Asia. We may occasionally cross-publish stories from one edition to the other.

We recommend the Borderless or the Echelon Plan which will give you access to stories across both editions.

Do you have a mobile app?

Yes! We have a top-rated mobile app on both iOS and Android which allows you to read on-the-go and has some amazing features like the ability to bookmark stories, save on your device, dark mode, and much more. It’s really the best way to read The Ken.

Is there a free trial?

You can sign up for a free account to experience The Ken and understand our products better. We’ll send you some free stories and newsletters occasionally, and you can access our archive of previously published free stories. You can stay on the free account as long as you’d like.

The vast majority of our stories, articles and newsletters can be accessed only by a paid subscription.

Do you offer any discounts?

Sorry, no. Our journalism is funded completely by our subscribers. We believe that quality journalism comes at a price, and readers trust and pay us so that we can remain independent.

Do you offer refunds?

No. We allow you to sample our journalism for free before signing up, and after you do, we stand by its quality. But we do not offer refunds.

I am facing some trouble purchasing a subscription. What can I do?

Just write to us at support@the-ken.com with details. We’ll help you out.

I have a few more questions. How can I reach out to you?

Sure. Just email us at info@the-ken.com or follow us on Twitter.