BENGALURU: Flipkart co-founder Binny Bansal will join PhonePe’s board of directors as the digital payments company splits from Walmart-owned Flipkart to become a separate entity.
Bansal will join PhonePe co-founders Sameer Nigam, Rahul Chari and Rohit Bhagat on the board.
Read also: Inside India’s quest to fix its payments puzzle
Bhagat currently serves as an independent director at Flipkart Private Ltd, PhonePe’s largest shareholder, and private sector lender Axis Bank Ltd., and its fintech payments entity, Freecharge.
In the past, Bhagat has also served on the board of various fintechs, including digital loan startup Capital Float, and is a senior advisor to global equity investment firm B Capital Group.
There will be two other independent directors from US retail giant Walmart appointed to PhonePe’s board as the leading Bengaluru-based digital payments company looks to add more senior industry advisers BFSI to its board.
The list of directors will be finalized in the first quarter of next year, Sameer Nigam said in an interview Thursday.
Flipkart co-founder and former CEO of the group, Binny Bansal, abruptly quit the e-commerce specialty in November 2018. After his departure, he co-founded startup consultancy xto10x Technologies.
Since then, Bansal has also undertaken various philanthropic initiatives and invested in fintechs, including player insurtech, Acko General Insurance, and the Rupeek gold loan market.
Following PhonePe’s corporate restructuring, Flipkart will continue to hold an 87% majority stake in separate entity PhonePe Private Ltd., with US retail giant Walmart holding 10% and existing investors including Tiger Global Management holding the remaining 3% .
PhonePe is also looking to raise $ 700 million at a $ 5.5 billion valuation as part of this hive that will be led by Walmart and will feature existing investors. The funding is likely to be spread over two tranches, with the first expected next month.
PhonePe confirmed that the fundraiser will not feature any new investors.
Sameer Nigam, founder and CEO of PhonePe, said that while the company has sufficient capital stream that will strengthen its independent operations, PhonePe can raise strategic capital from BFSI and the traditional financial services segments in the long term.
“Flipkart and PhonePe are already among the top Indian digital platforms with more than 250 million users each. This partial spin-off gives PhonePe access to long-term dedicated capital to pursue our vision of bringing financial inclusion to one billion Indians, “he said.
However, this has yet to be discussed with the Flipkart and PhonePe board, and is subject to approvals.
As a result of the corporate restructuring, PhonePe’s Employee Stock Ownership Plan (Esop) group will also be independent from Flipkart, and all employees will be entitled to receive Esops from PhonePe.
Previously, some senior PhonePe employees had received shares from Flipkart.
Sources close to the discussion said the spin-off is in line with PhonePe’s plans to file a separate Initial Public Offering (IPO). Mint was the first to report on PhonePe’s plans to go public by 2023 and targets to become profitable in 2022.
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