Flipkart’s struggles and efforts paid-off and it recently raised a whopping $1.4 billion from blue-chip tech giants Microsoft, eBay, and Tencent. This was the company’s biggest funding round. It was raised at a valuation of $11.6 billion, which is quite lower than the $15 billion valuation in the previous funding round in 2015. Now, the company is proposing to utilize a major chunk of the funding for the development of PhonePe and its finance technology.
Given the market potential for the finance technologies such as for money transferring, it seems like a good move. However, the segment already has a lot of active and established players. Flipkart co-founder and group CEO Binny Bansal said,
A large part of the money raised from the latest deals struck with Tencent, Microsoft and eBay, will be invested in new businesses, especially PhonePe and fintech.
Opportunities are definitely there on the payment side becoming a business on its own. Even if you look at the business today, a large part of the business comes from people sending money to each other on phone pay, UPI platform.
For those who are unaware, PhonePe is Flipkart’s electronic wallet service and has a tie up with Yes Bank to provide UPI services. Its aim is to make digital payments easy, safe and universally accepted — such that people never feel the need to carry cash or cards again.
The homegrown e-commerce giant believes India is at the cusp of a new mobile revolution, which will change the way people manage money on the go. The company says that it sees itself facilitating this change, through technology and dogged customer centricity.
The mobile-based money transfer platform has been downloaded between 10 million to 50 million times. It competes against other similar digital payment service providers such as Freecharge, Paytm, Jio Money, and Airtel Money, among others.
Binny Bansal further added that Flipkart was also going to invest ‘heavily’ in other new businesses like grocery, furniture and private labels. Commenting about forging a partnership with eBay, he added that they were very excited about it because it would provide a global platform for Indian sellers to sell products. He said that the partnership does not bring just capital but actually tags along a lot of new opportunities as well.
The fundraising for Flipkart also comes amid speculation that it may be interested in a takeover of its smaller rival Snapdeal. Reports suggest that Tiger Global is looking to shell-out some of its shares in Flipkart and SoftBank is ready to buy them if Snapdeal’s sale goes through.
He has been a technology writer since more than five years. At The Tech Portal, he covers gadgets, startups and the good and bad of tech.