Flipkart commits to invest $500 mn in arm PhonePe

E-commerce marketplace operator Flipkart has made an investment commitment of $500 million for its group company PhonePe, which operates in fintech payments space in the country. The new commitment adds to the $75 million funds infusion Flipkart has already made in PhonePe since acquiring it in 2015.

According to Binny Bansal, group CEO, Flipkart, “FinTech and e-commerce are among the most visible faces of a new digital India that is powered by the youth and technology, and both are set for outstanding growth. PhonePe is a critical part of our overall strategy at Flipkart to build a comprehensive ecosystem for our customers.”

The fintech ecosystem in India, especially payments, is undergoing a paradigm shift with the surge in mobile internet usage as vast swathes of people embrace its ease and convenience. Accordingly, market research shows India’s digital payments sector is estimated to grow to $500 billion by 2020, representing around 15% of gross domestic product, up from around $50 billion last year.

“The investment,” Sameer Nigam, co-founder and chief executive officer, PhonePe, said, “will be used to scale up our technology platform and expand our merchant network and consumer base rapidly. We have been growing at over 100% every two months this year, and this investment will help us maintain the same aggressive growth rate for the next two years.”