Morgan Stanley values Flipkart’s payments arm PhonePe at $7b: Report

PhonePe co-founder Sameer Nigam. Photo: Mint

Flipkart-owned payments company PhonePe has been valued at a starkling $7 billion by Morgan Stanley in its latest report, which also said that PhonePe has been the key factor for driving up Walmart’s share price.

PhonePe was reportedly valued at a little over $1 billion in its last funding round.

In a bull case, PhonePe could be worth as much as $20 billion, The Times of India reported quoting Morgan Stanley. Walmart’s share prices could go up to $125 in the base case and $165 in bull case, the report added.

The American retail giant’s shares were at an all-time high of $118 on Thursday.

With Indian payments space bracing for a growth of over 20 per cent in the next four years, PhonePe could turn out to be the biggest value creator for Walmart, which bought a controlling 77 per cent stake in its parent company, Flipkart, for $16 billion last year.

Quoting Morgan Stanley, the report further said PhonePe could garner revenues of about $1.4 billion (base case) from its foray into financial services business alone. The company is already operating in the mutual funds’ segment, and plans to further broaden its wealth management portfolio.

PhonePe was founded in 2015 by former Flipkart executives Sameer Nigam, Rahul Chari, and Burzin Engineer. It was, however, acquired by Flipkart within a year. Flipkart’s board is reportedly looking to spin off PhonePe into a separate entity and is exploring to raise $1 billion from outside investors at a valuation of as much as $10 billion.

At $10-billion valuation, however, PhonePe would still trail arch-rival Paytm, which is valued at over $15 billion.

PhonePe claimed to have emerged as a market leader driving the highest number of merchant UPI transactions in August by driving over 343 million transactions. Further, it claims to have deployed QR code across 6.5 million merchants across 210 cities in India.

Other players operating in the Indian digital payments space include Google Pay and Amazon Pay, both of which are vying to capture a larger share of the market. The competition is only going to get intense with the entry of global messaging giant WhatsApp into payments. The Facebook-owned app has about 400 million users in India.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.