Flipkart, the Indian e-commerce giant, has announced on Thursday that it has partially disinvested from the popular internet payment application PhonePe which will, from now on, act as a separate entity. The Bangalore-based financial services platform will start its new journey and has said that it has secured $700 million in its latest financing round which was led by Walmart, which is also the parent company of Flipkart, with participation from some existing investors.

The company in a statement informed, “Recognizing the momentum that has been achieved, as well as PhonePe’s significant growth potential, Flipkart’s Board determined that this was the right time to partially spin-off PhonePe so it can access dedicated capital to fund its long-term ambitions over the next three to four years.”

The financial services company which was launched by three former Flipkart executives Nigam, Rahul Chari, and Burzin Engineer, four years back, now has a post-money valuation of $5.5 billion. This new ownership will grant the company more autonomy in operations. However, Flipkart still remains the majority shareholder in the company with more than 80 percent stake. Flipkart also said that the “two businesses will retain their close collaboration”.

In a statement to the news agency The Economic Times, PhonePe CEO Sameer Nigam said, “the partial spin-off gives PhonePe access to dedicated long-term capital to pursue our vision of providing financial inclusion to a billion Indians.”

Flipkart acquired PhonePe in 2016. Thereafter, in 2018, the e-commerce giant was acquired by US retail major Walmart. PhonePe is one of the most used digital payment platforms in India and has over 250 million registered users. It was one of the key points in Walmart’s acquisition of Flipkart. In October, PhonePe had reported 835 million UPI transactions, making it the leader in the market, surpassing Google Pay which had reported 820 million UPI transactions.

The partial spinoff has been coming for more than a year. The payments application now has the power to constitute a new board of directors that can focus on the development of the company and also create equity incentives for its employees.

Kalyan Krishnamurthy, CEO of Flipkart Group, in a statement, “As Flipkart Commerce continues to grow strongly serving the needs of Indian customers, we are excited at the future prospects of the group. This move will help PhonePe maximize its potential as it moves to the next phase of its development, and it will also maximize value creation for Flipkart and our shareholders.”