India's largest e-commerce marketplace Flipkart has announced an investment commitment of USD 500 million for its group company PhonePe.
One of the largest ever single investment commitments in the Indian FinTech-payments space, Flipkart has shown its keen interest in rapidly scaling up the technology, reach, and offerings of PhonePe.
However, this commitment adds to the USD 75 million funds infusion which Flipkart has already made in PhonePe since acquiring it in 2015.
The FinTech ecosystem in India, especially payments, is undergoing a paradigm shift with the surge in mobile internet usage, and as vast swathes of people embrace its ease and convenience.
Accordingly, market research shows India's digital payments sector is estimated to grow to USD 500 billion by 2020 representing around 15 percent of GDP, up from around USD 50 billion last year.
"FinTech and e-commerce are among the most visible faces of a new digital India that is powered by the youth and technology, and both are set for outstanding growth. PhonePe is a critical part of our overall strategy at Flipkart to build a comprehensive ecosystem for our customers," said group CEO Flipkart, Binny Bansal.
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Hailing the development, co-founder and CEO, PhonePe, said "The investment will be used to scale up our technology platforms and expand our merchant network and consumer base rapidly."
He added that the company has been growing at over 100 percent every two months this year, and this investment will help us maintain the same aggressive growth rate for the next two years.
PhonePe's annual run rate touched a new high of USD 3.5 billion in terms of Total Payments Volume (TPV) in September. This ramp up is the fastest in the Indian digital payments space.