PayPal in talks with PhonePe for funding
MUMBAI/BENGALURU: Flipkart-owned PhonePe is in the process of raising capital independently at a $500-million valuation, two people familiar with the matter told TOI, signalling the interest of strategic players in the Indian digital payments market.
PhonePe has held early discussions with the global online payments giant PayPal Holdings, it is learnt, for a share sale, sources said. Naspers-owned PayU, along with a few others, have also held initial talks with the one-year-old startup, which Flipkart bought in April 2016.
PayPal, which has been looking to get a toehold in the fledgling but fast-growing domestic digital payments industry, had nearly closed a funding round with Snapdeal's Freecharge last year, but the deal fell through, sources said on condition of anonymity.
If talks with PhonePe are successful, it will be PayPal's big push into the buzzy online payments space, which is emboldened by the government's push towards digitisation. The San Jose-headquartered payments firm, which enables digital and mobile payments for consumers and merchants, operates in India but has a negligible presence here not having been able to reap the e-commerce boom.
Players like the Alibaba-backed Paytm have, on the other hand, been able to scale up significantly more, especially in the backdrop of demonetisation of high currency notes, which was announced in November last year by the government.
The Vijay Shekhar Sharma led Paytm raised money at $4.8-billion valuation last year in August. What's interesting is that PayPal's parent eBay has also held talks with Flipkart for a potential round of funding. Co-founded by former Flipkart employees Sameer Nigam and Rahul Chari, PhonePe lets users make payments through the Unified Payment Interface (UPI) platform promoted by the National Payments Corporation of India (NPCI).
Nigam did not offer any comments, saying as a matter of company policy they don't respond to market speculation. A PayPal spokesperson said the company does not comment on speculation or rumours, while Amrish Rau, CEO, PayU India, said, "As a leading fintech player, we are keen on the consumer payments opportunity. We, however, wouldn't like to comment on market rumours."
PhonePe has held early discussions with the global online payments giant PayPal Holdings, it is learnt, for a share sale, sources said. Naspers-owned PayU, along with a few others, have also held initial talks with the one-year-old startup, which Flipkart bought in April 2016.
PayPal, which has been looking to get a toehold in the fledgling but fast-growing domestic digital payments industry, had nearly closed a funding round with Snapdeal's Freecharge last year, but the deal fell through, sources said on condition of anonymity.
If talks with PhonePe are successful, it will be PayPal's big push into the buzzy online payments space, which is emboldened by the government's push towards digitisation. The San Jose-headquartered payments firm, which enables digital and mobile payments for consumers and merchants, operates in India but has a negligible presence here not having been able to reap the e-commerce boom.
Players like the Alibaba-backed Paytm have, on the other hand, been able to scale up significantly more, especially in the backdrop of demonetisation of high currency notes, which was announced in November last year by the government.
The Vijay Shekhar Sharma led Paytm raised money at $4.8-billion valuation last year in August. What's interesting is that PayPal's parent eBay has also held talks with Flipkart for a potential round of funding. Co-founded by former Flipkart employees Sameer Nigam and Rahul Chari, PhonePe lets users make payments through the Unified Payment Interface (UPI) platform promoted by the National Payments Corporation of India (NPCI).
Nigam did not offer any comments, saying as a matter of company policy they don't respond to market speculation. A PayPal spokesperson said the company does not comment on speculation or rumours, while Amrish Rau, CEO, PayU India, said, "As a leading fintech player, we are keen on the consumer payments opportunity. We, however, wouldn't like to comment on market rumours."
