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BENGALURU: Flipkart co-founder Binny Bansal will join PhonePe’s board of directors, as the digital payments firm separates from parent Walmart-owned Flipkart to become an independent entity.

Bansal will be join PhonePe co-founders Sameer Nigam and Rahul Chari and Rohit Bhagat on the board.

Also Read: Inside India’s Quest to Fix Its Payments Puzzle

Bhagat currently serves as an independent director at PhonePe’s largest stakeholder Flipkart Private Ltd and private sector lender Axis Bank Ltd., and its fintech payments entity, Freecharge.

In the past, Bhagat has also served on the board of various fintechs such as digital lending startup, Capital Float, and is a senior advisor with global equity investing firm, B Capital Group.

There will be two other independent directors from the US-retail giant Walmart appointed to PhonePe’s board, as the Bengaluru-based digital payments major looks to add more senior advisors from the BFSI sector to its board.

The list of directors will be finalised by the first quarter of next year, Sameer Nigam said in an interview on Thursday.

Flipkart co-founder and former group chief executive Binny Bansal had abruptly resigned from the e-commerce major in November 2018. After his exit, he had co-founded startup consultancy xto10x Technologies.

Since then, Bansal has also undertaken several philanthropic initiatives and invested in fintechs including insurtech player, Acko General Insurance and gold loans marketplace Rupeek.

Following the corporate restructuring of PhonePe, Flipkart will continue to own 87% majority stake in the hived-off entity PhonePe Private Ltd., with US-retail giant Walmart owning 10%, and existing investors including Tiger Global Management holding the remaining 3%.

PhonePe is also looking to raise $700 million at a valuation of $5.5 billion as part of this hive-off which will be led by Walmart and see participation from existing investors. The funding will likely come in two tranches, with the first expected next month.

PhonePe confirmed that the fundraise will not see any participation from fresh investors.

Sameer Nigam, founder and CEO at PhonePe, said while the company has enough capital runway which will bolster its independent operations, PhonePe can raise strategic capital from BFSI and traditional financial service segments in the long run.

“Flipkart and PhonePe are already among the more prominent Indian digital platforms with over 250 million users each. This partial spin-off gives PhonePe access to dedicated long-term capital to pursue our vision of providing financial inclusion to a billion Indians," he said.

However, this hasn’t been discussed with Flipkart and PhonePe board yet, and is subject to approvals.

As a result of the corporate restructuring, PhonePe’s Employee Stock Ownership Plan (Esop) pool will be also be independent of Flipkart, with all employees having the right to receive PhonePe Esops.

Earlier, some senior PhonePe employees had received Flipkart stocks.

Sources close to the discussion said the spin-off is in line with PhonePe’s plans of filing an independent Initial Public Offering (IPO). Mint was the first to report on PhonePe’s plans to go public by 2023, and aims of turning profitable in 2022.

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